Agreed about those pair of tossers, I hope their faking horses never win another race and their flaming stallions turn sterile
ALL issues relating to the bond issue and club finances
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Agreed about those pair of tossers, I hope their faking horses never win another race and their flaming stallions turn sterile
Well thanks for that Mr Marshall but how the hell are we going to do that exactly?
Great in theory, but I fear it is an impossible aim in practise
I will be happy to proven wrong.
I dont want to shit on the whole 'Green&Gold' thing but I cant help feeling that every penny that is being spent by fans on scarfs, flags, tshirts etc would be better off going toward something like the old Phoenix Fund.
True - I know a lot of info has come out due to the bond prospectus but I feel that there is still more going on in the background that we dont really know about.
wow.....
http://www.youtube.com/user/unitedrant Glazer bonds ditched as investors call for fan takeover
By Ed. Wed, Jan 27, 2010
Latest
Manchester United’s bond issue is falling apart almost as quickly as it began, with institutional investors ditching the notes and forcing prices to fall. The bond issued by the club, which raised £504 million last week, fell to a low of 93.4 pence in the pound at one stage today as investors sold on fears of United’s financial standing.
The United bond has a coupon rate of around nine per cent, significantly above current inter-bank LIBOR but fears expressed by key City insiders have sent prices tumbling, with one prominent United-supporting investor calling the club “over leveraged.”
That Jim O’Neil, of Goldman Sachs, works for one of the principal under-writers is highly embarrassing for the Glazer regime.
“I value my long-term support for Manchester United better than anything else,” O’Neil told The Daily Telegraph, before criticising the level of debt at the club.
United is now leveraged 200 per cent over turnover and 500 per cent over underlying profits with the bond issue alone – a rate normally associated with “junk” bonds. Factor in the £200 million in Payment-In-Kind loans being paid down from United’s cash reserves and there is little room for maneuver in the business model, argues O’Neil.
So desperate is the situation that another United-supporting hedge fund trader, Paul Marshall of Marshall Wace, urged fans to combine forces and return the club to the Manchester United community and out of the Glazers’ grip. Marshall co-founded Marshall Wace LLP, one of Europe’s largest hedge fund groups, in 1997 and is widely regarded as one of the leading equity strategists.
“Debt has acted like a leech on the club, sucking money out of the football budget to feed the Glazers and their bankers,” Marshall wrote in The Daily Telegraph today.
“It has been estimated that between 2005-9 Red Football Joint Venture Limited has spent at least £260m servicing its debt. Manchester United Plc has debt service costs of over £40m per annum – money that could otherwise be available for players.”
This much the fans are now painfully aware. Marshall, though, is deeply worried for the long-term future of the club with, he says, 45 people now employed to manage the club’s finances alone. £35 million has been lost in derivative positions in the past year, notes Marshall, and an estimated £140 million more will be sucked out of the club in the next.
“Leaving aside the apparent incompetence behind these losses, such hedging is only necessary because of the scale of the debt,” he says.
“Manchester United’s future is deeply worrying. United will never realistically be able to pay off the debt. And with the imminent retirement of Sir Alex Ferguson, we are close to a tipping point where declining fortunes on the field could lead to a loss of revenue which could cause the debt burden to spiral out of control.”
The solution, says Marshall, is a fan-led takeover, leveraging – in the best possible way – more than 300 million supporters worldwide to build a sustainable community project. He cites the fan-owned principles of Europe’s largest and most successful clubs as a model for the future.
“Football clubs are communities. Manchester United’s community famously extends well beyond Manchester, although Manchester is at its heart and core,” he concludes.
“The best form of ownership for a football club, as Barcelona has proven, is its community, not a single tycoon. It is time Manchester United’s global community came together to create a structure of common debt-free ownership.”
Meanwhile, in the City investors already have cold feet over the bond issue, which “was bought by investors who aren’t specialists in valuing high-yield bond investments,” according to one leading analyst today.
http://www.youtube.com/user/unitedrant Glazer bonds ditched as investors call for fan takeover
By Ed. Wed, Jan 27, 2010
Latest
The United bond has a coupon rate of around nine per cent, significantly above current inter-bank LIBOR but fears expressed by key City insiders have sent prices tumbling, with one prominent United-supporting investor calling the club “over leveraged.”
That Jim O’Neil, of Goldman Sachs, works for one of the principal under-writers is highly embarrassing for the Glazer regime.
“I value my long-term support for Manchester United better than anything else,” O’Neil told The Daily Telegraph, before criticising the level of debt at the club.
United is now leveraged 200 per cent over turnover and 500 per cent over underlying profits with the bond issue alone – a rate normally associated with “junk” bonds. Factor in the £200 million in Payment-In-Kind loans being paid down from United’s cash reserves and there is little room for maneuver in the business model, argues O’Neil.
So desperate is the situation that another United-supporting hedge fund trader, Paul Marshall of Marshall Wace, urged fans to combine forces and return the club to the Manchester United community and out of the Glazers’ grip. Marshall co-founded Marshall Wace LLP, one of Europe’s largest hedge fund groups, in 1997 and is widely regarded as one of the leading equity strategists.
“Debt has acted like a leech on the club, sucking money out of the football budget to feed the Glazers and their bankers,” Marshall wrote in The Daily Telegraph today.
“It has been estimated that between 2005-9 Red Football Joint Venture Limited has spent at least £260m servicing its debt. Manchester United Plc has debt service costs of over £40m per annum – money that could otherwise be available for players.”
This much the fans are now painfully aware. Marshall, though, is deeply worried for the long-term future of the club with, he says, 45 people now employed to manage the club’s finances alone. £35 million has been lost in derivative positions in the past year, notes Marshall, and an estimated £140 million more will be sucked out of the club in the next.
“Leaving aside the apparent incompetence behind these losses, such hedging is only necessary because of the scale of the debt,” he says.
“Manchester United’s future is deeply worrying. United will never realistically be able to pay off the debt. And with the imminent retirement of Sir Alex Ferguson, we are close to a tipping point where declining fortunes on the field could lead to a loss of revenue which could cause the debt burden to spiral out of control.”
The solution, says Marshall, is a fan-led takeover, leveraging – in the best possible way – more than 300 million supporters worldwide to build a sustainable community project. He cites the fan-owned principles of Europe’s largest and most successful clubs as a model for the future.
“Football clubs are communities. Manchester United’s community famously extends well beyond Manchester, although Manchester is at its heart and core,” he concludes.
“The best form of ownership for a football club, as Barcelona has proven, is its community, not a single tycoon. It is time Manchester United’s global community came together to create a structure of common debt-free ownership.”
Meanwhile, in the City investors already have cold feet over the bond issue, which “was bought by investors who aren’t specialists in valuing high-yield bond investments,” according to one leading analyst today.
If there are enough Mr Marshall's around to get the club out of the Glazers' hands the rest could follow.Well thanks for that Mr Marshall but how the hell are we going to do that exactly?
Great in theory, but I fear it is an impossible aim in practise
I will be happy to proven wrong.
I dont want to shit on the whole 'Green&Gold' thing but I cant help feeling that every penny that is being spent by fans on scarfs, flags, tshirts etc would be better off going toward something like the old Phoenix Fund.
Why does it matter if the bonds are traded at after United have their money? Or have I missed something.
The Paul Marshall article in the Telegraph is very different from the Red Rants stuff posted above and doesn't mention anything about the Bond Issue "falling apart". He says that the much of the United debt would qualify for the term junk because they are leveraged at over 5 times underlying earnings but that is a problem for the people holding that paper I would have thought.
His article is a very good dissection of United current financial situation which is (just about) OK at the moment but very vulnerable due to the sheer weight of debt.
The "United fans should buy the Glazers out" is no more than a wistful aside at the end of the article.
His article is a very good dissection of United current financial situation which is (just about) OK at the moment but very vulnerable due to the sheer weight of debt.
The "United fans should buy the Glazers out" is no more than a wistful aside at the end of the article.
Exactly. The bond issue isn't falling apart at all. It's already completed. The only people losing out are those who thought they could make a sell on profit.
If the bond price drops surely this makes it a more attractive investment for investors with an appetite for risk.
If the price dropped to 93.5p and they yield 9% of the £1 nominal price then that's annual interest of 9.6%
Surely that's got to be worth a punt in the current climate.
If the price dropped to 93.5p and they yield 9% of the £1 nominal price then that's annual interest of 9.6%
Surely that's got to be worth a punt in the current climate.
hurr hurr
Being talked about on Five Live now
Good piece - Heard it....
I think the main point is that if your debt is 5 times greater then your profits -- your business is unstable and no one in the financial world would touch it
All this seems irrelevant as the bonds have been sold. Things like this are never cut and dried. It all depends on individual investor's appetite for risk. What some see as a risk others see as an opportunity.
You do realise what you quoted him as saying was complete balls.
No, i'm not in finance.
Especially if your profits dip when the team doesn't finish top four. Our dent to profit ratio could easily be 10:1 within a couple of years.
Didn't have any ideas of how to rid the club of the Glazers or who would buy it or what any new owner would do differently.
Pat on the back to them for raising the profile of Green & Gold campaign though.
It really is, it makes my blood boil.
So you obviously missed Oli Houston explaining about the progress being made with regard to getting a consortium together?
What a new owner would do differently? (1) Not shaft the fans to the same extent. (2) Invest in the team. (3) Not take hundreds of millions of £s out of the club to service their own debt.
Mine too. I just hope that the movement against the Glazers now gathers enough momentum that they'll be forced to sell.
Manchester United opens window on murky world of leveraged buy-outs
Michael Moritz, venture capitalist at Sequoia Capital, explains what Manchester United's finances tell us about leveraged buyouts.
By Michael Moritz
Published: 1:55PM GMT 27 Jan 2010
Michael Moritz says before the Glazers took over, Manchester United was a thriving, healthy business.
Michael Moritz says before the Glazers took over, Manchester United was a thriving, healthy business. Photo: GETTY IMAGES
For a glimpse of the murky world of leveraged buy-outs (LBOs), look no further than the team atop the Premier League. What's happening to Manchester United football club is similar to the same fate that has beset many US and European companies that have been taken over by LBO firms.
Last week Manchester United officials were able to secure a badly needed refinancing of the £500m of debt assumed after the club was taken private.
Five years ago, before the Glazer family of Florida completed their assault on Manchester United, the football club was a thriving, healthy business. The club had plenty of cash, was free of debt and had the firepower to invest in the future.
The Club's football management - headed by Sir Alex Ferguson - had spent two decades carefully creating a franchise, much as chief executives and entrepreneurs diligently build companies.
All that work was put in jeopardy after the Glazers approached Manchester United.
In 2005, after enduring waves of mounting pressure, Manchester United's board of directors - while loudly warning shareholders of the probable consequences - sold the club for £790m. But, instead of paying with cash, or with a small and manageable amount of debt, the Glazers slammed a massive mortgage on Manchester United and leveraged it to the hilt.
Substitute the Glazer family with the names of LBO firms and Manchester United with the names of numerous corporations and you can see what could happen.
In the US we've watched the LBO firms, calling themselves "private equity", burden companies. They take over businesses that in some cases employed tens of thousands of people, formed the heart of many communities and had been steady and reliable taxpayers.
These are companies such as Readers Digest (bankrupt), Simmons Mattress (bankrupt), Mervyn Stores (bankrupt).
Virtually no industry has been able to escape the pursuit of the LBO firms. Supermarket chains, theme parks, gambling casinos and building suppliers have all fallen victim to the LBO treatment.
Here's how the Glazers treated Manchester United.
They replaced the board of directors with family members. They buried the club beneath several increasingly expensive layers of debt, which in the last three years have cost Manchester United £130m in interest payments - more than five times what the club received after selling David Beckham to Real Madrid.
They took money out as onetime payments, loaned money to themselves at favorable rates and charged the club management fees. And now they are about to sell Manchester United's training ground and lease it back to the club.
If Sir Alex Ferguson wants to buy new players, it seems the club will have to assume even more debt.
Across the US the buyout firms have perfected the business plan.
A buyout firm spots a company with a healthy business. Boards of directors are tossed aside; assets are pledged; employees are fired; pre-before tax becomes earnings before interest, tax, depreciation and amortisation; all the energy turns from building a healthy long-term business to servicing the creditors.
Who benefits from all this? In the case of Manchester United it is certainly not the fans - the customers; the players - the employees; or the management -Sir Alex Ferguson and his staff, whose opportunity to share in the increase in equity value they built was flattened when the club was taken private.
The beneficiaries have been the Glazer family and the bankers, lawyers and accountants. (Just the banking fees for last week's bond offering equates to more than half of what Manchester United paid for Wayne Rooney).
When will all these people who act like sub-prime landlords have the decency to abide by a few simple principles? Don't buy what you cannot afford.
If you buy something, use your own cash. Reward the people who have built the business. Put earnings in the bank or invest in the future. And, one final thing, never confuse borrowers with owners.
Manchester United opens window on murky world of leveraged buy-outs - Telegraph
Michael Moritz, venture capitalist at Sequoia Capital, explains what Manchester United's finances tell us about leveraged buyouts.
By Michael Moritz
Published: 1:55PM GMT 27 Jan 2010
Michael Moritz says before the Glazers took over, Manchester United was a thriving, healthy business.
Michael Moritz says before the Glazers took over, Manchester United was a thriving, healthy business. Photo: GETTY IMAGES
For a glimpse of the murky world of leveraged buy-outs (LBOs), look no further than the team atop the Premier League. What's happening to Manchester United football club is similar to the same fate that has beset many US and European companies that have been taken over by LBO firms.
Last week Manchester United officials were able to secure a badly needed refinancing of the £500m of debt assumed after the club was taken private.
Five years ago, before the Glazer family of Florida completed their assault on Manchester United, the football club was a thriving, healthy business. The club had plenty of cash, was free of debt and had the firepower to invest in the future.
The Club's football management - headed by Sir Alex Ferguson - had spent two decades carefully creating a franchise, much as chief executives and entrepreneurs diligently build companies.
All that work was put in jeopardy after the Glazers approached Manchester United.
In 2005, after enduring waves of mounting pressure, Manchester United's board of directors - while loudly warning shareholders of the probable consequences - sold the club for £790m. But, instead of paying with cash, or with a small and manageable amount of debt, the Glazers slammed a massive mortgage on Manchester United and leveraged it to the hilt.
Substitute the Glazer family with the names of LBO firms and Manchester United with the names of numerous corporations and you can see what could happen.
In the US we've watched the LBO firms, calling themselves "private equity", burden companies. They take over businesses that in some cases employed tens of thousands of people, formed the heart of many communities and had been steady and reliable taxpayers.
These are companies such as Readers Digest (bankrupt), Simmons Mattress (bankrupt), Mervyn Stores (bankrupt).
Virtually no industry has been able to escape the pursuit of the LBO firms. Supermarket chains, theme parks, gambling casinos and building suppliers have all fallen victim to the LBO treatment.
Here's how the Glazers treated Manchester United.
They replaced the board of directors with family members. They buried the club beneath several increasingly expensive layers of debt, which in the last three years have cost Manchester United £130m in interest payments - more than five times what the club received after selling David Beckham to Real Madrid.
They took money out as onetime payments, loaned money to themselves at favorable rates and charged the club management fees. And now they are about to sell Manchester United's training ground and lease it back to the club.
If Sir Alex Ferguson wants to buy new players, it seems the club will have to assume even more debt.
Across the US the buyout firms have perfected the business plan.
A buyout firm spots a company with a healthy business. Boards of directors are tossed aside; assets are pledged; employees are fired; pre-before tax becomes earnings before interest, tax, depreciation and amortisation; all the energy turns from building a healthy long-term business to servicing the creditors.
Who benefits from all this? In the case of Manchester United it is certainly not the fans - the customers; the players - the employees; or the management -Sir Alex Ferguson and his staff, whose opportunity to share in the increase in equity value they built was flattened when the club was taken private.
The beneficiaries have been the Glazer family and the bankers, lawyers and accountants. (Just the banking fees for last week's bond offering equates to more than half of what Manchester United paid for Wayne Rooney).
When will all these people who act like sub-prime landlords have the decency to abide by a few simple principles? Don't buy what you cannot afford.
If you buy something, use your own cash. Reward the people who have built the business. Put earnings in the bank or invest in the future. And, one final thing, never confuse borrowers with owners.
Manchester United opens window on murky world of leveraged buy-outs - Telegraph
Not quite true
Before the credit crunch there were some private equity deals which saw senior debt levels of 5 times equity and debt pricing was not too bad i.e. around 150 bps over base/LIBOR not being rare
Nowadays banks (if they lend at all) will not go beyond 3 times equity and pricing is double at a minimum of 300+bps.
To be honest, your main point is correct, 5 times debt to equity is highly risky for any business.
I am new to this debate so forgive me if I haven't read all the posts but I guess the real issue is even if you could get the Glazers out.......who would pay the price needed to pay of all the debt? Even if someone like that existed what sort of profit or return on investment would they expect and how would that affect cash for players etc.
In an ideal world all clubs would be owned by their fans....but sadly,we don't.
As for the green and gold campaign.I am very sympathetic to and understanding of the groundswell of genuine feeling it was provoked by though I am not sure it's a good idea.
If you damage the brand, you damage the value and make less likely the prospect of a 'white knight' investor riding to the rescue having slayed the Glazers.
How this plays out is crucial not just to Man Utd but to other clubs as well.The FA really need to look at regulating the takeover of clubs and their ability to raise new debt.As an Arsenal fan used to a club being well run financially I wonder how long that can be sustained with Kroenke and Usmanov lurking in the background and where that will lead.
As for clubs becoming a billionaire's plaything (read Chelsea and Man City) what happens when they lose interest?
Bottom line - FIFA,UEFA and the FA need to come up with a sensible regulatory environment that prevents the excesses of the carpetbaggers and corporate raiders.
All this press coverage is great!
Long may it continue!
Die! Glazer! Die!
Long may it continue!
Die! Glazer! Die!
Must have done oh wise one...what progress has been made? How much has been pledged to the cause?
1. How much shaffting is acceptable?
2. I did hear someone say that Ferguson was the biggest asset the club has yet he then went on to ridicule his recent signings....no wonder being taken seriously is proving difficult.
3. Where is this charity case with a few hundred million quid to spare hiding?
hear! hear! - I've spent the last three weeks or so slowly getting wound up by Glazer and his filthy brood.
i'm ashamed to have been one of those in the wait-and-see camp. i just hope it's not too late.
The green and Gold is being talked about on 5live now, Chappers seems to be giving it some good coverage
Chappers is quality..
Sure he was vocal during the takeover? Top man.
Sure he was vocal during the takeover? Top man.
not sure it was chappers now, think it was tony livesey actually.
Was good to hear some good coverage though there were a few morons phoning in, one in particular said people should forget about this green and gold and just ride the glazer's out
Was good to hear some good coverage though there were a few morons phoning in, one in particular said people should forget about this green and gold and just ride the glazer's out
There was talk on 5Live of yesterday of MUST talking to some serious investors about raising finance to buy a serious stake in the club.
Anyone know anymore?
Anyone know anymore?
One win and it's all forgotten!
What pisses me off the most amongst many things is that the fecking Glazers got into the club (as directors etc, laughable) and take the money out as "management fees" and to pay their private debt!
I work in the finance and advisory business, so I know how these things re investments, financing etc work, and I know how the people think. But this is a bloody football club. Further, the Glazers plan is absolute bollocks, and to turn a profitable "franchise" into so much debt is just ridiculous, even worse that they dont know how to manage it or how to get rid off...
I remember posting here on the day of the take over and I expressed the same fear as I have today. Never did I ever believe that they are able to handle that kind of debt, and neither does the club. Additionally, as pointed out in the article, there is so much money flowing out of the club (advisoryb costs, accounting & management fees etc), its ridicolous. As I said, I work in that business and I know the fecking fees, the background and the ppl, and I surely know they dont act in the best way for the club
To do that with a perfectly run, healthy FOOTBALL CLUB with fans from all kind of backgrounds, passion etc, it's just a fecking disgrace. It's not an investment vehicle, a company or some kind of trust (well, it might be seen as a company by some idiots)... and they had some personal debts, however, not anymore, the WHOLE debt is now on the shoulders of United alhtough the Glazers own the club...
to sum it up, I fecking hate the Glazers, now even more (if that is possible) and I want them to speak out now, to make the club debt free (which they never will be able to do) and feck off... god forbid if they feck up even more
I work in the finance and advisory business, so I know how these things re investments, financing etc work, and I know how the people think. But this is a bloody football club. Further, the Glazers plan is absolute bollocks, and to turn a profitable "franchise" into so much debt is just ridiculous, even worse that they dont know how to manage it or how to get rid off...
I remember posting here on the day of the take over and I expressed the same fear as I have today. Never did I ever believe that they are able to handle that kind of debt, and neither does the club. Additionally, as pointed out in the article, there is so much money flowing out of the club (advisoryb costs, accounting & management fees etc), its ridicolous. As I said, I work in that business and I know the fecking fees, the background and the ppl, and I surely know they dont act in the best way for the club
To do that with a perfectly run, healthy FOOTBALL CLUB with fans from all kind of backgrounds, passion etc, it's just a fecking disgrace. It's not an investment vehicle, a company or some kind of trust (well, it might be seen as a company by some idiots)... and they had some personal debts, however, not anymore, the WHOLE debt is now on the shoulders of United alhtough the Glazers own the club...
to sum it up, I fecking hate the Glazers, now even more (if that is possible) and I want them to speak out now, to make the club debt free (which they never will be able to do) and feck off... god forbid if they feck up even more
As it stands now, Manchester United has almost bought itself for the Glazers - despite how little sense that appears to make. Other than their own relatively small contribution, the debt all now belongs to club, and this was the very debt which was used in order to buy it in the first place. It really baffles me how that can make sense or be allowed.
This is the first year we have turned a profit since the Glazers took over.
We can expect a whopping big loss in next years accounts as well.
Here's a good article on the ways in which the Glazers are looking to take money out of United under the new structure. Always found andersred's stuff to be very good.
the andersred blog: How we know they're planning to take out cash..... the final piece of evidence
the andersred blog: How we know they're planning to take out cash..... the final piece of evidence
This just make me sad. Daylight robbery. I have also been one of those in the wait-and-see camp, make me feel sick.
Let's stop this madness!!
Green and Gold.
I wont read that. Not because I am not interested, just because it would piss me off too much and make me sad. FFS
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