Oh yeah our delicate wage structure, those tight restrictions being placed on us which have seen Rooney handed £200k a week, Evra £100k and even John O'Shea £80k; tight bastards!
ALL issues relating to the bond issue and club finances
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Oh yeah our delicate wage structure, those tight restrictions being placed on us which have seen Rooney handed £200k a week, Evra £100k and even John O'Shea £80k; tight bastards!
Bit of a random observation but I was just perusing the third quarter results of the company I work for. This is a large, risk-averse and very succesful pharmaceutical company, that's managed double digit growth, year on year, for the last 5 years.
These results included the following statement;
which I thought was interesting in the context of all the anxiety about the size of United's debt.
Obviously, the reason United are in debt is what really sticks in the craw but I do think we need to accept that MUFC is a business and it's possible to run a very successful business despite large amounts of debt.
These results included the following statement;
which I thought was interesting in the context of all the anxiety about the size of United's debt.
Obviously, the reason United are in debt is what really sticks in the craw but I do think we need to accept that MUFC is a business and it's possible to run a very successful business despite large amounts of debt.
If you load up the overheads with substantially increased wages for your existing key players (Rooney won't be the only one asking for "extortionate wages)and for those top players whom you bring in, and don't compensate by savings elsewhere then it puts extra pressure on revenue growth to sustain profits. Apart from the old stagers we'll save little on the fringe players and perhaps JOS's new deal is an indication that they don't intend to readily get rid of the more experienced fringe players.
I think there will be cutbacks and certainly VDS is going and perhaps the other three also. Patience with Carrick and Anderson may be wearing thin and perhaps Park may be considered surplus to requirements.
The current situation has been sustained by revenue growth of 10% per annum. How much more can that growth be pumped up given the current state of the world economy, with a period of austerity ensuing and accompanied possibly by a period of less success on the pitch ?
The current state? Are you implying the world economy has been in a better state these last 2 or 3 years than it is right now?
Haha it is pretty amusing isn't it? If accounts weren't released to the general public everyone would think Arsenal were hemouraging money every year, the way the have sold players without replaced them.
Question for the accountants: If Arsenal are so profitable and have spent negatively on players in over 7 seasons (net), presumably they have well over £300m sitting in the bank, regardless of their mortgages?
JOS is a mystery, Evra understandable and Rooney quite outrageous but rather than seeing him wind up at City - also understandable. There will be compensatory releases, possibly in January and certainly in the summer. Of course they are tight bastards !
No I'm not but the true meaning and implications of global deficits and what to do about them has only fairly recently been acknowledged (viz UK govt policies and most other countries in the developed world). If you think we've been living through austerity and seen the worst of it, I reckon you ain't seen nothing yet. It will affect everything including United's revenue growth. As regards the latter, if costs (principally wages) increase then can commensurate revenue growth be counted on ?
JOS is a mystery, Evra understandable and Rooney quite outrageous but rather than seeing him wind up at City - also understandable. There will be compensatory releases, possibly in January and certainly in the summer. Of course they are tight bastards !
Well they don't seem that tight to me. I've not personally been brainwashed by MUST's hate-campaign, but even i'd have laughed a few weeks ago if someone had suggested that the Glazers would by now be paying a United player £200k a week. I'd have been wrong to sneer though, they're certainly not tight.
The amount of debt's not really important, the amount of debt compared to income, and compared to the value of the company is. Do you have any idea what your company is worth?
You said this same thing last year - you were proven wrong as revenue did grow even though we didnt win any major honours, perhaps you should learn from experience.
The EBITDA was 1,700 million.
For the quarter?
I did not say categorically that revenue would not grow. I said it woujld need to continue to grow at least at 10% per annum with costs kept similarly in check. If costs rise above that line then revenue would have to increase proportionately. What I did say was that there was uncertainty regarding future revenue growth. I think that uncertainty could be even greater now.
As for lack of major honours and the effect of that on revenue - I suggest that there is a lag effect there. United can live on past glories for a period. How long that could be with a fan base accustomed to continued success is another matter.
Wages were at 46% of turnover this year which suggests that there's £12million(ish) leeway before we hit that 50% level.
Even if Rooney IS on £200k (I still don't think this has been confirmed, has it? Personally, I can't see it being any more than £180k) then that is still "only" around £6m increase on what he was getting before.
It seems a bit pointless for Fergie to come out and say that he is being restricted by the wage structure - of course he is and any fair-minded person should understand that this is nothing unusual. Every manager in the world has a budget that he has to stick with (unless the club is being bank-rolled by a bottomless pit of external money).
As for revenues for the current year, we'll be hoping for a slightly better showing in all competitions (excect the Carling Cup, obviously) and I don't see why that isn't possible and that increases prize money and TV money.
If revenues can get anywhere near £300m then even a wage bill of £140m would be well under 50%. Even if revenues stay the same as last year, we're still under 50%.
Even if Rooney IS on £200k (I still don't think this has been confirmed, has it? Personally, I can't see it being any more than £180k) then that is still "only" around £6m increase on what he was getting before.
It seems a bit pointless for Fergie to come out and say that he is being restricted by the wage structure - of course he is and any fair-minded person should understand that this is nothing unusual. Every manager in the world has a budget that he has to stick with (unless the club is being bank-rolled by a bottomless pit of external money).
As for revenues for the current year, we'll be hoping for a slightly better showing in all competitions (excect the Carling Cup, obviously) and I don't see why that isn't possible and that increases prize money and TV money.
If revenues can get anywhere near £300m then even a wage bill of £140m would be well under 50%. Even if revenues stay the same as last year, we're still under 50%.
Actually, the "cost control" in the 2009/10 results is pretty illusory. Digging a bit deeper there's a one-off £5.5m reduction in non-salary operating costs which is due to the elimination of agents fees relating to the search for a new shirt sponsor. It's a real cost reduction (a real boost to profits) but it isn't going to be repeated.
Stripping out the impact of this one time reduction, underlying EBITDA grew from an adjusted £97.6m in 2008/9 to £100.8m in 2009/10. That's growth of 3.3% on turnover growth of 2.9%.
So the club reported 3% underlying profit growth on 3% turnover growth despite the 16% increase in commercial income. The huge boost in commercial revenue was needed to offset the weaker playing performance and (most importantly) the 7% increase in wage costs.
I find that 7% increase a bit scary given it was a season that should have seen lower bonuses than 2008/9 (we didn't win the league and didn't get to the CL final) and also a season without Ronaldo and Tevez's wages (with the presumably cheaper Valencia and Owen instead).
So I think the question of whether revenues can continue to grow faster than costs remains unanswered at this point.
The future has an element of the unknown about it. Another "No shit Sherlock" moment, Anders?
What would your guess be Anders? Do you still think their winging this or do you think that they know what they're doing yet?
A bit misleading that, clearly a lot of money that the fans fork out on United goes to pay off the debt. Hundreds of millions of £s in fact. I've never had any qualms about having to pay increased ticket prices in order for us to be able to buy/pay the best players.
It was a bit tongue-in-cheek ralphie.
It just shows though how the money that the fans pay directly to the club can be manipulated to prove a point - in this case, how many people have to buy their tickets just to pay Rooney's wages.
On another day, it will be how many it takes to pay the Bond interest.
The fact is (and this is a fact, your "fact" isn't actually a "fact" at all) the money the fans pay to the club directly in the form of matchday income is nowhere near enough to pay for both. It isn't even enough to pay for the players.
Indeed and within the next two years, matchday revenue will become the smallest division of the club's turnover behind media and commercial revenue. In fact if you were to look at purely general admission ticket revenue (excluding execs) you'll find it comes to just c. 17% of our total turnover and that percentage is only going to get smaller as each year goes by.
It's very difficult to know how concerning the salary increase is without having a detailed breakdown of the costs available to look at. One thing I noticed last season is that we had a very large second year academy group who all signed professional deals during the year and if they're on 4k-6k per week (which is what I've seen speculated) then that adds a few million to the total wage costs. More significant reasons will be the annual pay rises in player contracts as well as the size of the first team squad which was larger than ever last season. I think we'll have a smaller first team squad once the old and long-term injured players have left the club and that will help to control staff costs somewhat.
When's the next gripping installment of First Allied's ''problems'' due out btw?
Is there any talk of any more sponsorship deals GCHQ? It seems that it's been a while since we've announced one and there isn't anything official about DHL even though, they were visible during home games.
Did you not see my post last week about Epson becoming a new sponsor? There will be official announcements in due course on the Epson, Arctic Ice and DHL agreements and I'd expect a steady flow of new deals throughout the rest of the season.
Nop haven't seen it, link please? So we could possibly have around 40 odd sponsors in total within the next two years?
There's no link and nothing official on Epson but their name first appeared on the LED boards at the Wolves game and that's a sure sign that they've become a sponsor. 40 odd sponsors within the next two years is a realistic possibility, yes.
Without the fans, there's no matchday, no commercial, no TV. It's our money, whether it comes from a match ticket, a replica shirt or a TV subscription. And huge amounts of it are being pissed up the wall to pay off a debt that's larger than it was when the Glazers took over in 2005. Bizarre that you're so happy about it, but each to their own I guess.
It's not my area of expertise, but isn't there a recognised phenomenon of a brand being damaged by over-exposure / dilution?
Oh wow. I'm going to have to come back to this tomorrow. It's too late to get into tonight but that is warped logic right there ralphie. You're not alone, there's a lot of it about.
Dunno. Ask Coca Cola.
Source?
I just wish he would come clean about it, he should name his source
Strange that you don't demand the same of Anders.
You could always ask Anders if his support of MUST is because he gets paid to show his support. To act as a sort of PR consultant on behalf of MUST.
I think I know what the answer is...
Anders is usually giving his opinons and does not need a source. GCHQ is giving us info about the club which has not been released yet, where is he getting it? He is usually right with this info btw
Open your eyes - you only have to look at the advertising hoarding around the pitch to see when a new partner comes online. I noticed the Arctic Ice and DHL myself - its hardly ITK info.
BTW anders often comes out with supposedly 'top secret' info which he says he cant reveal the source on so very hypocritical to ask that of one person and not another
Anders has a secret little mole leaking out secrets from within the confines of OT.
Perhaps Anders gets his info from GCHQ..
Just to point out I don't think Anders needs to reveal his sources, just as I don't think GCHQ does. The vast majority of their posts here are based on freely available information, and even the "secret source" stuff isn't too hard to believe.
The difference being, if Anders tells us who leaks him info, we may all be surprised. If GCHQ were to tell us where he gets his info from, it wouldnt surprise anyone at all..
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