ALL issues relating to the bond issue and club finances

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Redjazz said:
In your haste to report the good news to commandus wrt the zero consultancy fee you obviously overlooked mention of the 10+m in management fees paid to the Glazers over the last two years. The accounts now transitioning to an IAS basis reveal fees of 6m for 2011 (4+m for 2010).
The 2010 fee was not disclosed in the 2010 RF accounts.

Other ownership costs include exceptional pre-IPO professional fees of around 3m.

All-in, it has been a very expensive year for the club as far as ownership goes; my estimate allowing for all the bond buybacks (including the post YE transaction) is 145m. Better we deal with our own debt than a pik or pik replacement but the cash outflow from the club has been severe.
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I didn't overlook the management fee. I just didn't mention it and it wasn't relevant to the point I was making to Commadus. A £6m management fee in the context of a business generating £330m turnover (and rising) is chicken feed. And given how well the club is performing commercially I'd say that management fee is bloody well deserved!

The bond buybacks have reduced the club's gross debt by £87m. We've had years of the anti-Glazer fanatics pissing and moaning that the debt was increasing (even though it barely did if the PIK debt was correctly excluded) and now that it's actually falling significantly the negative commentary continues. The Glazers can't win.

I've seen the unscrupulous Mr Green twittering away about the Glazers supposedly costing the club half a billion pounds since they bought the club. Of course he neglects to mention the huge amount of revenue (now in the hundreds of millions of pounds) that the Glazers have personally generated for the club through their own strategic decisions nor the similar amount saved in dividends and corporation tax when compared to the previous PLC model. I'm firmly of the opinion that as the club's remarkable commercial success continues that the Glazers are at the very least close to entering positive territiory in terms of their net financial contribution to the club. In fact, I think they're already there.
 
Pexbo said:
You are aware that when we were making £38m in profit back around 2003.... we were paying around £9m a season in dividends to the shareholders?

We clocked over £100m in profits this year, put's a little perspective on it.
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Yes, of course. I was responding to a comment about a 3m consultancy fee. If its non payment is worthy of comment then management fees of 4 and 6m over the last 2 years are worthy of comment- especially as they weren't disclosed in the previous accounts. Proportional perspective and all that jazz.

Of course 10m in management fees (bringing the total to date to 23m) is an insignificant portion of the total ownership cost and a comparison between management fees and dividends doesn't remotely reflect true costs. My estimate for 2011 which includes the post YE bond purchase is 145m. It dwarfs the 6m management fee.
I am also aware that during the last 5 full years of its reign the PLC paid out a third of its EBITDA on dividends and tax. Interpolating into the Glazer era, the counterfactual plc would have paid about 165m in dividends and tax over the last 6 years had it raised the 500+m of combined EBITDA achieved under the Glazers. The ownership cost for the last 16 months exceeds that amount. Though over half of the cost in that period is due to bond buybacks, it does offer a little perspective.
 
what is the cost without the bond buybacks?
Dont think you can really complain about paying off the debt - but the rest is a different matter
 
Rood said:
what is the cost without the bond buybacks?
Dont think you can really complain about paying off the debt - but the rest is a different matter
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Whilst we are buying back the debt, does this actually reduce our overall interest bill, or divert it to the Glazers?

I presume the latter, which is still a positive.
 
finneh said:
Whilst we are buying back the debt, does this actually reduce our overall interest bill, or divert it to the Glazers?

I presume the latter, which is still a positive.
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The £87m of bond buybacks reduces the club's net annual interest bill by c. £7.5m.

Another interesting note from the accounts is that slightly more season tickets were sold before the start of this season than were sold before the start of the 2010/11 campaign.
 
GCHQ said:
The £87m of bond buybacks reduces the club's net annual interest bill by c. £7.5m.

Another interesting note from the accounts is that slightly more season tickets were sold before the start of this season than were sold before the start of the 2010/11 campaign.
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I mean on United's accounts will it still show the c. £45m bill or will it now show c. £37.5m (ie did Man Utd buy the debt back or the Glazers/parent company). I understand that in the scheme of things it doesn't really matter because the money is now being retained internally, rather than externally. I'm just interested in the economics of it, because Utd itself owning some of it's own bonds...
 
GCHQ said:
The bond buybacks have reduced the club's gross debt by £87m. We've had years of the anti-Glazer fanatics pissing and moaning that the debt was increasing (even though it barely did if the PIK debt was correctly excluded) and now that it's actually falling significantly the negative commentary continues. The Glazers can't win.
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I'm assuming that the amount of bond buybacks and cash on hand is pretty conclusive the repayment of the PIKs has been taken care of from outside the United accounts. Thoughts?
 
finneh said:
I mean on United's accounts will it still show the c. £45m bill or will it now show c. £37.5m (ie did Man Utd buy the debt back or the Glazers/parent company). I understand that in the scheme of things it doesn't really matter because the money is now being retained internally, rather than externally. I'm just interested in the economics of it, because Utd itself owning some of it's own bonds...
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It will show c. £37.5m on the club's accounts.
 
I think it's a good time to reiterate my stance all through this as I think it's as relevant as ever:

The Glazer's are not bad for Manchester United Football club, both as a Football Club and as a Business. However if you view us (The Fan's) as a seperate entity the Glazer's are hitting us in the pocket and showing preference to the corporate side of things rather than your average fan and therefore they are bad for us fans.

So.... as MUST have been quiet lately and with more and more positive news about the Financial shape of the club, which has been their main form of brainwashing propaganda about how the club is somehow going into liquidation and ceasing to exist due to the crippling debt..... it's about time they do their actual job of trying to somehow look after the fans interest's rather than just going to war with the Glazer's.
 
from M.U.S.T



[1] Revealed: Glazers' secretly charged United 16.1m in "management fees"

[2] Sir Alex Ferguson - your help needed to celebrate 25 glorious years



[1] Revealed: Glazers' secretly charged United 16.1m in "management fees"

... and they've personally bought more than $10m of the bonds too so now our club is also personally paying them interest on their debt that they have dumped on our club. As one Red on Twitter said "And we thought it was only City who were taking the **** out of us this week".

We wanted all MUST members to see this story (below) as it highlights much of what is wrong about the Glazer takeover of our football club.

It's clear that these details were intentionally hidden from supporters and were only revealed when the club adopted new accounting rules in preparation for the possible flotation in Singapore. It does beg the question what else is being hidden from supporters? Where did the money come from to pay off the PIKs? Were they just refinanced and the facts hidden in Delaware USA?


The accounts also revealed that Kevin Glazer, who is a non-executive member of the club’s board of directors, and his immediate family own $10.6m worth of the club’s bonds. Those bonds pay an interest interest rate of 8.375 per cent – meaning our club is now not only paying interest on their debt but actually now paying interest to Glazer family members on part of their debt that they landed on our club.

It's shameful that the FA and government did not have any regulations in place to stop the Glazer takeover or the foresight to block the takeover going through and protect supporters from this type of exploitation.

We'll be following up with a further message to MPs next week and we hope all UK based United fans will use the opportunity to contact their MP to show how important football ownership and governance is to supporters.


It's now calculated that the total cost of the Glazers’ ownership of the club since their takeover has come to £532m.

That's almost seven Ronaldo's.
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It's encouraging to know they are now employing journalist's from the Daily Mail, Sun and Sunday Sport to write their articles for them.

I was waiting to see what rubbish they come out with and they didn't disappoint. It's getting embarrasing now, to think I spent alot of my apprentice wage on being a member.
 
Stan Kroenke, Arsenal’s majority owner, has lavished praise on the Glazer family’s stewardship of Manchester United and questioned the long-term benefit of billionaire benefactors, arguing that sport should be about more than spending power.

“I would be much more proud if all our leagues were developed with the idea that you are competing on the basis of intellect and work and effort instead of just simply, 'I am going to throw dollars against the wall’,” said Kroenke.

With the rest of the Premier League struggling to keep pace with Manchester City, Kroenke defended Arsenal’s self-sustainable model and made a point of acclaiming the Glazers for underpinning their phenomenal success by developing Manchester United infrastructure and revenues.

Kroenke’s own takeover at Arsenal differs fundamentally from the controversial leveraged model that has loaded debt on United, but he said that supporters should focus on the results.

“What was so tough about the Glazers’ situation?” said Kroenke. “They won. And they have increased revenues by a huge amount. If I was a fan of that club I would go ’wow’. Because how could you do it any better?”

When it was put to him that the Glazers had taken money out of the club, Kroenke said: “Some of their players have taken money out and maybe they haven’t performed. I think it’s time maybe for everybody to think a little bit.

“In the States, you would never get this dialogue. He [Glazer] took money out of the club. So what? Jerry Buss [the owner of the Los Angeles Lakers] takes money out of the club. A lot of owners in the US do. No-one ever says anything about it. Did the Lakers win anything? Well, yeah, they did. How big is their revenue? Pretty darn good.”
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I think we'd all prefer an ideal situation in terms of ownership, unfortunately thats very difficult to achieve.

While most would agree that they're ideal owners is it hard to argue that overall they seem to be doing a decent job as owners?
 
Pexbo said:
I think it's a good time to reiterate my stance all through this as I think it's as relevant as ever:

The Glazer's are not bad for Manchester United Football club, both as a Football Club and as a Business. However if you view us (The Fan's) as a seperate entity the Glazer's are hitting us in the pocket and showing preference to the corporate side of things rather than your average fan and therefore they are bad for us fans.

So.... as MUST have been quiet lately and with more and more positive news about the Financial shape of the club, which has been their main form of brainwashing propaganda about how the club is somehow going into liquidation and ceasing to exist due to the crippling debt..... it's about time they do their actual job of trying to somehow look after the fans interest's rather than just going to war with the Glazer's.
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The Glazer have so far taken out somewhere in the region of £500m from Manchester United Football Club and we are still in a vast amount of debt. How can that not be bad for the football club?

The Glazers are bad for the club and bad for the fans. The only people that have done well out of the Glazers are, well, the Glazers.

And sort out your apostrophes. :nono:
 
GCHQ said:
They haven't hidden anything. The Jan 2010 bond issue highlighted the fact that management fees had previously been charged and that an amount of up to £6m could be charged annually going forward.
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I understand the bond issue forced their hand in having to declare it and that prior to that it would be a voluntary disclosure. Is that not right/
 
Is this damn float gonna happen? I'm hoping this will help to make us more competitive financially.

£478m in servicing debt repayments is nothing short of a tragic loss.

I'm hoping this is the first step in the Glazer's path to selling up.
 
KingMinger22 said:
Is this damn float gonna happen? I'm hoping this will help to make us more competitive financially.

£478m in servicing debt repayments is nothing short of a tragic loss.

I'm hoping this is the first step in the Glazer's path to selling up.
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You mean in the transfer market?

You do know we'll never even attempt to compete with City and Madrid don't you? What you see now is what you get.
 
KingMinger22 said:
Is this damn float gonna happen? I'm hoping this will help to make us more competitive financially.

£478m in servicing debt repayments is nothing short of a tragic loss.

I'm hoping this is the first step in the Glazer's path to selling up.
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It's a worse time than ever to be doing a flotation. Even Asia is looking a bit jittery. So I don't see this going ahead any time soon.
 
charleysurf said:
It's a worse time than ever to be doing a flotation. Even Asia is looking a bit jittery. So I don't see this going ahead any time soon.
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I was thinking the other day... can you imagine the mocking from certain posters if this supposed flotation plan was the work of a fans group opposed to the Glazers?

There'd be no end of "What a bunch of chancers" / "Was always a stupid pipe dream" / "Told you so, can't believe you mugs thought this would happen" etc...
 
First Quarter Results - 1 July - 30 September

Year on year revenue growth of 16.6% from £63.3m to £73.8m

Year on year EBITDA growth of 29.5% from £14.9m to £19.3m


Total staff costs increased by 12.2% year on year from £33.7m to £37.8m

Commercial revenue increased by 22.3% year on year from £24.2m to £29.6m


Cash at bank now stands at £65m, a reduction of £85m since the start of the quarter. This can largely be attributed to the net cash outflow of £47m on players in the three month period along with a further £23m spent on buying more bonds back.
 
GCHQ said:
Year on year revenue growth of 16.6% from £63.3m to £73.8m

Year on year EBITDA growth of 29.5% from £14.9m to £19.3m


Total staff costs increased by 12.2% year on year from £33.7m to £37.8m

Commercial revenue increased by 22.3% year on year from £24.2m to £29.6m


Cash at bank now stands at £65m, a reduction of £85m since the start of the quarter. This can largely be attributed to the net cash outflow of £47m on players in the quarter along with a further £23m spent on buying more bonds back.
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Warchest is dwindling away....
 
towcester_red said:
Warchest is dwindling away....
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No, it's just about the seasonality of cash flows.

Over the next nine months we'll generate c. £100m of net cash from operating activities. Take off c. £20m for the second semi-annual bond interest payment in February and you're back up to £145m of cash at bank by the start of the next financial year (minus any further cash spent on buying new players or buying back bonds in the nine months to June 30 2012).
 
GCHQ said:
Year on year revenue growth of 16.6% from £63.3m to £73.8m

Year on year EBITDA growth of 29.5% from £14.9m to £19.3m


Total staff costs increased by 12.2% year on year from £33.7m to £37.8m

Commercial revenue increased by 22.3% year on year from £24.2m to £29.6m


Cash at bank now stands at £65m, a reduction of £85m since the start of the quarter. This can largely be attributed to the net cash outflow of £47m on players in the three month period along with a further £23m spent on buying more bonds back.
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Amazing results.

My only concern are that our staff costs increase so much despite we get rid of a couple of high earners.

The upper side is that we continue (if your assumption it's true) to buy back bonds. Good cover if our on field results drops.
 
7even said:
Amazing results.

My only concern are that our staff costs increase so much despite we get rid of a couple of high earners.

The upper side is that we continue (if your assumption it's true) to buy back bonds. Good cover if our on field results drops.
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I remember being quite concerned about the increase in staff costs in the first quarter of last year (a 14.6% increase from £29.4m to £33.7m). However the year on year increases in the second and third quarters were only 6.7% and 3.5% respectively. There was a substantial 36.3% increase in the fourth quarter from £37.1m to £50.6m but this included just under £10m in bonus payments to staff for winning the Premier League (payments which obviously weren't made in the fourth quarter of the previous year). Taking the bonus payments out of the equation results in a year on year increase of 9.4% for the fourth quarter of the last financial year. I think it's fair to assume that we'll see a similar trend this year, so on that basis I'm comfortable with the 12.2% increase in staff costs in the first quarter.
 
GCHQ said:
No, it's just about the seasonality of cash flows.

Over the next nine months we'll generate c. £100m of net cash from operating activities. Take off c. £20m for the second semi-annual bond interest payment in February and you're back up to £145m of cash at bank by the start of the next financial year (minus any further cash spent on buying new players or buying back bonds in the nine months to June 30 2012).
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I thought that the majority of our cash in-flow occurred July-Sept, due to the season ticket sales? I'm sure I read somewhere that our cash balance this time last year was £152m (which would mean over the 9 month period Sept 2010 - July 2011 the cash in-flow was negligable)?
 
finneh said:
I thought that the majority of our cash in-flow occurred July-Sept, due to the season ticket sales? I'm sure I read somewhere that our cash balance this time last year was £152m (which would mean over the 9 month period Sept 2010 - July 2011 the cash in-flow was negligable)?
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No, the big cash inflow occurs in the fourth quarter (April-June). Season ticket money is received in June.

You're right that the cash balance as of 30 Sep 2010 was £152m but that was achieved after £11.9m was spent on capital expenditure in the first quarter compared to £60.9m in the first quarter of this year. There were also no bond buybacks in that period last year compared to £23m this year.

A further £103m of net cash was generated from operating activities between 30 Sep 2010 and 30 June 2011. £68m was spent buying back bonds in that nine month period, there was a further £6.6m of capital expenditure and £29m of financing costs. This led to a year end cash balance of £151m.
 
GCHQ said:
No, the big cash inflow occurs in the fourth quarter (April-June). Season ticket money is received in June.

You're right that the cash balance as of 30 Sep 2010 was £152m but that was achieved after £11.9m was spent on capital expenditure in the first quarter compared to £60.9m in the first quarter of this year. There were also no bond buybacks in that period last year compared to £23m this year.

A further £103m of net cash was generated from operating activities between 30 Sep 2010 and 30 June 2011. £68m was spent buying back bonds in that nine month period, there was a further £6.6m of capital expenditure and £29m of financing costs. This led to a year end cash balance of £151m.
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Ah ok, so the majority of the money (c. £90m) since then has gone toward buying back the bonds... Fair enough.
 
7even said:
Amazing results.

My only concern are that our staff costs increase so much despite we get rid of a couple of high earners.

The upper side is that we continue (if your assumption it's true) to buy back bonds. Good cover if our on field results drops.
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Wild speculation, but isn't this mostly due to the highly improved salary of tying up Wayne?
 
GCHQ said:
No, the big cash inflow occurs in the fourth quarter (April-June). Season ticket money is received in June.

You're right that the cash balance as of 30 Sep 2010 was £152m but that was achieved after £11.9m was spent on capital expenditure in the first quarter compared to £60.9m in the first quarter of this year. There were also no bond buybacks in that period last year compared to £23m this year.

A further £103m of net cash was generated from operating activities between 30 Sep 2010 and 30 June 2011. £68m was spent buying back bonds in that nine month period, there was a further £6.6m of capital expenditure and £29m of financing costs. This led to a year end cash balance of £151m.
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Do you work for Manchester United?
 
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