Trigg. I say crerands got a two inch willy. Disprove it or it's true. Fact.
ALL issues relating to the bond issue and club finances
- Thread starter sammsky1
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Doc we wouldn't had to pay that much had we made him an offer within the timeframe agreed. Before this gets too heated I repeat these are my thoughts on this issue and none of us really know what happened, I again openly admit I may be wrong. What is wrong is that I have been called a moron and accused of being on a windup, I am entitled to my opinons on the matter
No, he didn't sign for City until a few weeks later. He had been approached by City by all accounts, but not signed; he was a free agent, he was allowed to talk to whichever club he liked. The fact is United made him a good offer which would have made him one of our top earners; we estimated his value as being one of the best players at the club and offered him terms accordingly. He rejected us for and fecked off to City, it's as simple as that.
So, are those numbers that we saw recently set to continue in the future or are we likely to actually make a profit in future?
Also, from what I can tell. The interest repayments amount to £40m per year? That though doesn't make a dent into the £500m that the club owes though. So does that mean we're going to have that figure and those repayments forever or until new owners come in?
Again, sorry if I'm way off base here I'm just trying to grasp it all.
Big contibution that, I thought this sort of behaviour was being discouraged
I apologise. You are entitled to your opinions but some people look to be basing their opinions on the information at hand. You seem to go on gut feelings.
I'm not saying the profit on their £270m equity investment would be £500m or even £470m (£1.25bn - £780m). I'm saying the profit would be c. £400m if they sold the club for £1.25bn. RFJV Ltd's net debt is currently c. £590m. That's c. £100m higher than it was when the Glazers completed their takeover back in 2005. The reason it's only increased by c. £100m despite the gross debt increasing by c. £200m is because RFJV Ltd's cash reserves have increased by c. £100m during the same period.
Back to the drawing board, Frederick.
We did make an offer in the agreed timeframe. At the end of it but within it. If he was negotiating with city for months he had no intention of staying did he.
What? Using a schoolground analogy to point out the absurdity of your primary school arguments?
Yes but I think it wouldn't have been prudent to wrap up the deal during the loan period. I think the idea was that we'd see how he did over the loan period and, to me by the end of it at least, he was sub-standard and not even worth the agreed fee.
You let me worry about the moderating, or I'll infract you for questioning our work..
Basically, yes.
What you have to bear in mind though is the effect of inflation on these figures.
It is like if someone came along 100 years ago and saddled the club with £500 debts and a debt repayment of £4 a year.
We'd all have been up in arms about it at the time but now it would appear quite silly.
(I'm going to get blasted for this but it's the easiest way to explain it!
)Sticks and stones
Accepted.
Absolute rubbish. The net talent within the squad plummets. You sell the best player in the squad by a mile and replace him with a decent enough out and out winger from Wigan who has no proven goal-scoring record. You simply try and argue the Ronaldo money to suit when the fact is Ronaldo and Tevez leaving left a massive hole in the squad. It was "filled" with Valencia and Owen.
The net spend shows a £14m per annum net non-spend by Sir Alex based on what the Glazers have said he would have available.
I'm sure had the club bought a player for such a huge amount of money you would have also discounted it from the Glazers' net spend.
Despite any of this, the accounts at the end of June'09 showed a vast sum of money available in the United's bank (£150m). That resource remains untapped to this day, which shows that the cash wasn't needed for any other purpose other than transfers back in 2009. The owners have since set up a £75m credit-facility which can only be useful as a temporary resource in the event of needing immediate funds for a very large (£50m+) net-transfer expenditure in the near future should the carve-out ever be taken. This wasn't necessary back in June 2009 because the carve-out would not be taken for at least another fifteen months (and counting). All this points to a lot of cash being available for transfers, both now and back in summer 2009. If Tevez had wanted to stay then the money was available for his purchase; hence the £25.5m bid for a five year deal with lucrative terms. The bid wasn't a fake or a scam to cover up our lack of funds because the funds were right there in abundance and have remained in place till this day. If Tevez had wanted to stay and the offer to him had been accepted as the club had hoped it would then United could easily have put up the costs. The conspiracy theories are quite simply all just nonsense designed to make the Glazers look evil, United look skint and to spread a bit more doom and gloom around with which to scare everyone; what a fecking surprise!
Anyone who doesn't think that the vast, vast majority of the cash currently 'resting' in United's accounts isn't going to be spent on repaying the PIKs is living in cloud cuckoo land.
Think of the bond as an endowment mortgage. We only pay the interest on it and then at the end, the same figure that you borrowed is due.
As for the future - has the football industry ever been predictable?
We know that we have just commenced a 4 year deal with AON for shirt sponsorship.
We know that we have a marketing agreement with Nike in place for the merchandise.
We know that around £500m has to be found in 2017 to repay the bond.
We know that the PIKs become due in 2017 and need repaying in full.
There are many financial unknowns:
We don't know about foreign media rights but we keep growing those.
Beyond the current UK TV deal, we don't know which way deal prices will go, but trends suggest up.
We don't know what will happen with ticket prices or the demand for tickets. Trends suggest prices rising but we have hit a critical point where prices have been frozen but the waiting list has been exhausted so that will be interesting next summer.
Player wages look to be heading in one direction.
How much the Glazers choose to remove from the club in the form of dividend payments remains to be seen.
Define 'vast vast majority'.
Even if the carve-out is taken (which it hasn't been, so welcome to cloud cuckoo land) there will still be £94m of the £164m remaining.
So Ronaldo, Lee Martin, Manucho, Campbell, Tosic and Foster. Sorry GCHQ you're saying that our net income from all those players sold in the last 2 years is £13.6 mill? And Anders, the fees received for all the players above can't be just £94 mill, given that we received £80 mill for Ronaldo alone.
I'd like to think that the Glazers aren't stupid enough to assume that we'll be able to get by for a couple more seasons with the level of squad that we've got, given the ages of some of them.
Messrs Giggs, Scholes and Van Der Sar will all need replacing and I'd expect that to severely eat into the cash at hand if we're to replace them with instant impact players, i.e. established stars. The failure to replace Schmeichel and Keane immediately should provide sufficient warning of the consequences.
SAF says that he's never been refused funds under the current ownership. Are those who support the conspiracy theories then seriously suggesting that he was given the funds to bid for Tevez on the proviso that he convince Tevez to reject the deal and sign for City?
It's Sum(Ronaldo, Martin, Manucho, Campbell, Tosic, Foster, Cathcart, Eckersley, Simpson) minus Sum(Chicharito, Valencia, Obertan, Smalling, Bebe)
Come on, stop being daft. Tevez had already been convinced to sign for City.
Or do you want to extend the theory to him ringing up and convincing Benzema to sign for Real Madrid.
Wait, you're telling me that Anders' number of £94 mill, is the net over that period? Not a chance. Our net spend for the transfers you mentioned has to be lower than that. Can someone clear this up?
According to your calculations, Martin, Manucho, Campbell, Foster, Cathcart, Eckersley and Simpson brought in over £40 million in transfer fees. That's definitely not right.
By all accounts, Fergie, Gill and the Glazers talk regularly about the state of play with the squad and I suspect Fergie tells them where it's all at and how much it is likely to cost over the next few years to replace players on their way out.
I don't think they are under any illusions about the need to replace players. They aren't exactly novices to running a sporting institution, having been at the Buccs for 15 years.
I think some people need to relax a bit. The money is there to replace players and they will be replaced when Fergie decides the time is right but you can't bring in an established star goalkeeper for example and tell him to sit on the bench for a season because we're still quite happy with the way VDS is performing, can you?
You're right, it's daft!
Who convinced him to sign for City? We're trying to blame the Glazers here, remember; did the Glazers convince Tevez to sign for City? When questioned SAF always said, "We'll sign him at the end of the season, he's just got to be patient, we'll sign him." or words to that effect. Sure enough as soon as the season finished United evaluated Tevez and made him a very good offer; to make him one of the top earners on a five year deal with the club. The Glazers came good with the funds, the offer was made. Who convinced Tevez to sign for City then? The Glazers? Be honest now; are the Glazers to blame for Tevez choosing to sign for City?
The Glazers have left Fergie and Gill to run the club. Nobody is disputing the goalkeeper situation, which is why the money is in the bank rather than the keeper being on the bench. We hope.
That Kia bloke - no doubt pandered to his ego - first choice at City and for more money Carlos, eh?
Martin -
Manucho - ?
Campbell - £3.5m
Foster - £6m
Cathcart - £0.3m
Eckersley - £0.2m?
Simpson - c£1.5m
Tosic - c£7m?
Sorry, just realised; Bebe's transfer occurred after this period, so you can dump £8m-ish
Interesting. Done a bit of digging and Valencia is listed as having signed on 30/6/2009 and if the reporting periods line up as end of year being 30th June, that takes him into the prior accounting year to Ronaldo's sale. Unless someone has something more official than soccerbase to go on?
What happens to our ability to maintain the squad when that money is gone?
It is NOT the net spend. It isn't "my" number either. It's the accounting charge for two years.
In football clubs' accounts, transfer spending is "recognised" over the length of a players contract. Sign Carlos Kickaball on a 5 year contract for £20m and you recognise a cost of £4m per annum. So those numbers include the fees paid for Berb, Valencia, Nani etc spread over the life of their contracts. Players like Scholes or Giggs have "no cost".
It's called "amortisation of player registrations".
It's no different really from recognising the cost of buying a car or piece of machinery over its life (for life read contract in this case).
I've heard that Carlos Kickaball aint half bad, you know.
Oh that would be funny if it wasn't so tragic.
That money's being kept for one reason and one reason only. And it ain't waiting for "value" to suddenly appear in "the market".
The entire point of the bond issue was to allow the Glazers to use United's money to pay off their PIKs.
They will do it I'm afraid, just watch them.
We've been assured of this before; the money will have gone by the time the end of year accounts are released. Didn't happen.
And the £94m remaining? What of that?
Can you tell us, ralphie, if there's no money available for transfers then what is the point of the £75m credit facility which can only be used for temporary borrowing? It can't be a buffer for just the carve-out, because we would have to spend over £94m (£54m if you allow for the natural trough in bank reserves during a season) before it would become necessary. Well where's that £94m expected to be going then? Because it can't go up to RFJV.
Gill told us that the credit-facility was put in place to give SAF a transfer war-chest, and the only logical explanation is that that is exactly what it's for.
edit.
I expect one or two big signings in the next twelve months.
Before anyone starts going mental, i'm not saying that we'll be spending net £94m, we're not City, we're not desperate. But the funds are certainly there if we wanted/needed to go out and buy a £20m player, or a £30m player, or a £40m player; we've got the muscle to support SAF when he needs supporting.
My guess is that SAF will want to bring in a couple of top talents for next season, perhaps even in January if the right men for the job are available by then. The Glazers will trust and support SAF's judgement, just as SAF says they always have; a successful team is a marketable team is a profitable team. The funds will be made available when needed.
We previously (pre bond) had a 50m RCF to cater for working capital needs. It wasn't (historically) used for player expenditure.
'Our cash needs' have altered with the bond issue. We now have the possibility of an annual dividend being drawn. As far as I am aware (maybe Anderdred\somebody can confirm), the new RCF can't be used to pay down existing indebtedness and it has covenants relating to the taking of dividends. I'd imagine that a dividend to address the pik (existing indebtedness) might be forbidden; but an equivalent amount on, say, the planned net spend on players (25m) would be allowed.
This both supports and complicates what i'm trying to get at, but the message from the club is the same as what i've said above, near enough.
When funding is needed for transfers then funding will be made available, exactly as SAF has told us it always has been.
It would seem a bit silly to intentionally set something up which completely contradicts itself.
I am assured that the only thing the Glazers can do with their dividends is pay off their PIKs.
Why then set up an RCF if using it will mean that you can't pay yourself any money?
I am assured that the only thing the Glazers can do with their dividends is pay off their PIKs.
Why then set up an RCF if using it will mean that you can't pay yourself any money?
There is something working it's way through the fog that is my brain at the moment which has something to do with the fact that the PIKs are due in 2017 and the Bond Issue runs out in 2017.
Why did they choose a 7 year bond? Is 7 some kind of magic number? It seems a little odd to me. Why not 5 year or 10 year?
I realise that there are all kinds of complications to what I am about to suggest but could it be that they intend to pay off some of the PIKs using dividends and the carve-out at certain points over the next 7 years (when it is "safe" to do so - ie when the cash situation is strong and there is no imminent need for massive squad investment) but their end plan is to somehow borrow against the equity on United in order to pay off whatever is remaining on the PIKs and setup another Bond Issue for a larger amount in 2017 to cover it all?
That both the PIKs become due and the current Bond expires in 2017 just seems a little too much of a coincidence to me.
Why did they choose a 7 year bond? Is 7 some kind of magic number? It seems a little odd to me. Why not 5 year or 10 year?
I realise that there are all kinds of complications to what I am about to suggest but could it be that they intend to pay off some of the PIKs using dividends and the carve-out at certain points over the next 7 years (when it is "safe" to do so - ie when the cash situation is strong and there is no imminent need for massive squad investment) but their end plan is to somehow borrow against the equity on United in order to pay off whatever is remaining on the PIKs and setup another Bond Issue for a larger amount in 2017 to cover it all?
That both the PIKs become due and the current Bond expires in 2017 just seems a little too much of a coincidence to me.
I dunno if the info is useful to your theory, TMRD, but if the owners take the carve-out then just £13m each subsequent year would be enough to keep the PIK's at a constant level.
I dunno cider. I just have this figure in my head that if the PIKs rolled up to their full extent then we are looking at something in the region of £450million (this figure might be wrong - it is from memory).
Given that the Glazers themselves own at least 20% then perhaps this figure now becomes something in the region of £360million.
I can imagine a scenario where the £70m carve out is taken and the divs are taken every other year or something (£75m) and we come down to something in the region of £200million at the end.
Say a Bond Issue for £700million on similar terms as the one we currently have for a yearly interest payment of around £65million?
Might sound ridiculous now but we have no idea what the state of play will be in 2017.
It sounds plausible enough.
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