ALL issues relating to the bond issue and club finances

[Rood]

I'm fairly certain that's the case, unless five years of business studies have taught me absolutely nothing In our case the debt has decreased, but the cash reserves has decreased with a bigger sum, which means net debt has actually increased.

I thought andersred sort of undermined that argument a bit when he pointed out that the cash reserves are mostly this low because of seasonal changes. If they triple again soon, it means that the net debt has decreased. I suppose you have to compare last year's Q3 statements to make a proper asessment though.

Anyways, Glazers out!

Yes you are right that net debt is net of cash, I think Will just got a + and - mixed up.

and you are also right that andersred undermined his own argument - I suspect he got a bit carried away when he first saw the numbers this morning and then backtracked.

We had a lot more cash this time last year, some might say too much - most was spent on both players and bonds (also splashed out on some land purchases), which leaves us at more 'normal' cash levels.
Andersred's estimate of having c£75m in the bank for the summer transfer window is probably about right.

 

[Adam-Utd]

So for the idiots in this thread.. namely me... this is still good news right? were still heading in the right direction?

Less debt always sounds good too me, and we spent 60 odd million on players last year, that was a big lump of our cash anyway wasnt it?

 

[Interval]

Using net debt is a pointless exercise unless you have a fair estimate of the WC cycle. My personal way of approaching it, of course.

 

[Transfer United Till I Die]

Yes you are right that net debt is net of cash, I think Will just got a + and - mixed up.

and you are also right that andersred undermined his own argument - I suspect he got a bit carried away when he first saw the numbers this morning and then backtracked.

We had a lot more cash this time last year, some might say too much - most was spent on both players and bonds (also splashed out on some land purchases), which leaves us at more 'normal' cash levels.
Andersred's estimate of having c£75m in the bank for the summer transfer window is probably about right.

I guess the question then is how much we have to set aside to cover the wagebill and other normal costs and how much is available for transfers (or buy backs).

 

[Will Absolute]

I presume he's using the word "despite" because net debt has risen, not remained the same.

Despite using cash reserves to pay down the total debt, net debt has risen. Seems like a fair enough comment.

The point I was making, Pogue, before confusing my pluses with my minuses, was that using cash to pay off debt has no effect on net debt.

I guess his - or your - justification for using the word would be that he was saying 'Hey, don't be misled, folks. Even though debt has fallen, net debt has actually risen'. But I think the context suggested that a fall in debt should be accompanied by a fall in net debt if things were right, which is wrong and misleading.

 

[2Bullish]

What a misguided argument.

Its clear that the club have achieved despite the new ownership and not because of it. Thank god we have the worlds best manager because without Fergie keeping the club at the top of the tree the whole house of cards may have come crashing down.

Perhaps those more financially literate than me can suggest where I'm going wrong but it appears apprent that any increase in revenue strems the Glazers have developed (if indeed the Glazers have done so rather than those already involced in the club) outweighs the enormous debts the club are saddled with.

Give me a break. If the Glazers had brought instability, a lack of funds in the transfer market or had mishandled the debt that they had to incur to buy the club, I would be straight on the Glazers out bandwagon. The fact is they have not.

We are still competitive, we have not changed our transfer policies, they have left Fergie to manage the club. Our revenue streams have seen unprecedented growth. The fact remains they own this club. All this Glazers out bullshit is exactly that.....bullshit.

The fact remains that if it were not for the banking crisis and the inability to refinance their debt, we would be a hell of a lot closer to being debt free, which we still will be. When this happens and you think the club is being mismanaged, then blow your trumpet. Right now, you are wasting your breath with your house of cards analogy because its just bullshit.

 

[Redjazz]

I'm fairly certain that's the case, unless five years of business studies have taught me absolutely nothing In our case the debt has decreased, but the cash reserves has decreased with a bigger sum, which means net debt has actually increased.

I thought andersred sort of undermined that argument a bit when he pointed out that the cash reserves are mostly this low because of seasonal changes. If they triple again soon, it means that the net debt has decreased. I suppose you have to compare last year's Q3 statements to make a proper asessment though.

Anyways, Glazers out!

Yeah, that is the case. Net debt will be impacted by seasonality of cashflow. If other things remaining unchanged, the net debt will be lower at the start of the year when cash reserves are higher, increase as cash in bank falls, fall again as cash reserves are restored in the final quarter due to advance ST money.

Increased reinvestment (47m more spent on players and facilities in the 9 months to date compared to last year's Q3 total) will act to increase the net debt figure. Debt repayments are net debt neutral: Gross debt and the cash position fall by equivalent amounts.

 

[Interval]

Give me a break. If the Glazers had brought instability, a lack of funds in the transfer market or had mishandled the debt that they had to incur to buy the club, I would be straight on the Glazers out bandwagon. The fact is they have not.

We are still competitive, we have not changed our transfer policies, they have left Fergie to manage the club. Our revenue streams have seen unprecedented growth. The fact remains they own this club. All this Glazers out bullshit is exactly that.....bullshit.

The fact remains that if it were not for the banking crisis and the inability to refinance their debt, we would be a hell of a lot closer to being debt free, which we still will be. When this happens and you think the club is being mismanaged, then blow your trumpet. Right now, you are wasting your breath with your house of cards analogy because its just bullshit.

Admittedly we aren't precariously placed but you can't seriously argue that we couldn't have used all the funds tied up in interest payments in a better way if they hadn't been around.

 

[2Bullish]

Admittedly we aren't precariously placed but you can't seriously argue that we couldn't have used all the funds tied up in interest payments in a better way if they hadn't been around.

I'm not saying that but the fact remains that SAF has always held a policy of what he believes a player is worth and what we, as a club, are prepared to pay in wages. Nothing has changed. Just because there has been money in the bank does not necessarily mean that it will be spent.

All this posturing by fans is simply pathetic. We are owned by the Glazer family. They put in their own money, and lots of it, and borrowed the rest, they are committed to making this club successful, that much is obvious.

They have also created much more revenue under their stewardship, which to some extent offsets their borrowing costs.

Which ever way you look at it, whether it be as a plc and paying dividends, or paying banks interest, Manchester United is a business and whoever has the bollox to take this behemoth on and keep us competitive has a serious set of balls. Much bigger than the majority of fans that bemoan their takeover without justifying why it is they are so upset in the first place.

On another note, do you know how many shares as a percentile were bought by United fans when we were a plc, about as many that still wear the green and yellow scarves, the ones that feel so bad they still go to the game in protest.

 

[Commadus]

Using net debt is a pointless exercise unless you have a fair estimate of the WC cycle. My personal way of approaching it, of course.

Time for a nice graph methinks to show how it ebbs and flows throughout the course of the year.

A point in time it can be construed either way But over a cycle or time period puts it into perspective.

 

[Interval]

Time for a nice graph methinks to show how it ebbs and flows throughout the course of the year.

A point in time it can be construed either way But over a cycle or time period puts it into perspective.

Exactly. Cash is an integral part of working capital and you can't just blindly subtract cash from gross debt. You actually need a pat of that cash for your everyday operations.

Quite a few people actually recommend not including cash in EV calculations unless it is an obviously big number.

 

[GCHQ]

That's 60million we;d have been paying c8% on. It's an efficient use of cash.

Exactly. The annual interest bill on the bond debt is now running at c. £34m pa so I don't want to hear any more of this ''£50m being spent on interest every year'' nonsense that some people keep coming out with. A successful IPO would see a further significant fall in that figure.

Obviously the full year financial results are going to be slightly disappointing due to the CL exit and our performance in domestic cup competitions but the underlying growth (ie revenue not directly related to on-pitch performance) is still there due to further impressive gains in the commercial revenue division, which incidentally now brings in more revenue than either of the other two main revenue streams (Matchday and Media).

The £25m cash balance really isn't a concern. It's simply a seasonal fluctuation and will be back up to c. £80m-£90m by the end of the financial year (June 30 2012).

There has been a £64m net cash outflow on players (£47m) and capital investment on refurbishments, improvements and land acquisitions (£17m) in the first nine months of the financial year. Large investment in the club and a significant reason for the fall in cash reserves (£60m-£70m) over the last year.

 

[GCHQ]

Disappointing figures. We need to do the IPO.

£25.6m... wouldn't be surprised if that it our transfer budget! We'll see.

Cue GCHQ's bullshit propaganda about how it is good that our overall debt minus cash reserves has gotten worse...

The slight increase in net debt is precisely due to the large amount of cash (£64m net) that has been spent on players and capital expenditure in the last nine months. Thanks for reminding me to point that out by the way.

 

[GCHQ]

Seems to be a bit of a cnut this guy.

A troublemaker who offers one-sided propaganda.

He (Andersred) knows just as well as I do that had the PLC still been in place today that the club's wage bill and therefore strength of the playing staff would be no higher than it actually is with the Glazers. In fact, when you consider that the PLC would almost certainly be generating significantly less in commercial revenue every year (£25m-£30m?) than the club is under the Glazers ownership then it isn't a massive stretch to suggest that the wage bill would have been slightly lower and therefore the strength of the first team squad weaker under the PLC.

 

[De Selby]

A troublemaker who offers one-sided propaganda.

He (Andersred) knows just as well as I do that had the PLC still been in place today that the club's wage bill and therefore strength of the playing staff would be no higher than it actually is with the Glazers. In fact, when you consider that the PLC would almost certainly be generating significantly less in commercial revenue every year (£25m-£30m?) than the club is under the Glazers ownership then it isn't a massive stretch to suggest that the wage bill would have been slightly lower and therefore the strength of the first team squad weaker under the PLC.

You can't prove or disprove that either way.

 

[GCHQ]

You can't prove or disprove that either way.

It's a reasonable and sensible assumption based on the fact that the PLC would have stuck to their 50% wages to turnover target and wouldn't have been as aggressive and skillful in generating commercial revenue growth as the Glazers have been.

Let's look at the 2010/11 full year financial results. Turnover under the Glazers was £331m. Wages were £153m. With the PLC generating £25m-£30m less in commercial revenue it doesn't leave any room for the wage bill to grow from £153m to stay within the 50% wages to turnover target, does it?

With the PLC still in place, instead of moaning about debt and interest payments, United fans would have been like today's Arsenal fans complaining about why they're so far behind the the top clubs in terms of commercial revenue and a lack of second tier sponsors.

 

[SAred]

GCHQ , im not a financally expert in anyway but looking at these figures and the need to buy a player or three for the up coming season. If we only have 25 million for players is that it? ( excluding player sales ).

How will the Glazers get the money if needed by Sir Alex for players?

 

[Transfer United Till I Die]

GCHQ , im not a financally expert in anyway but looking at these figures and the need to buy a player or three for the up coming season. If we only have 25 million for players is that it? ( excluding player sales ).

How will the Glazers get the money if needed by Sir Alex for players?

The balance now isn't £25m, it's circa £75m. feck knows how much is available.

 

[Darren_z33]

GCHQ , im not a financally expert in anyway but looking at these figures and the need to buy a player or three for the up coming season. If we only have 25 million for players is that it? ( excluding player sales ).

How will the Glazers get the money if needed by Sir Alex for players?

5 posts above yours.

The £25m cash balance really isn't a concern. It's simply a seasonal fluctuation and will be back up to c. £80m-£90m by the end of the financial year (June 30 2012).

 

[SAred]

5 posts above yours.

Thanks should of read before posting....

 

[Annihilate Now!]

It's a reasonable and sensible assumption based on the fact that the PLC would have stuck to their 50% wages to turnover target and wouldn't have been as aggressive and skillful in generating commercial revenue growth as the Glazers have been.

Let's look at the 2010/11 full year financial results. Turnover under the Glazers was £331m. Wages were £153m. With the PLC generating £25m-£30m less in commercial revenue it doesn't leave any room for the wage bill to grow from £153m to stay within the 50% wages to turnover target, does it?

With the PLC still in place, instead of moaning about debt and interest payments, United fans would have been like today's Arsenal fans complaining about why they're so far behind the the top clubs in terms of commercial revenue and a lack of second tier sponsors.

Sorry, but that's all arbitary really.

You have no idea what the PLC would or would not have done, so to speculate to prove a point is a little misguided. To suggest that the PLC could not possibly have had the forsight to move into second-tier sponsorships is total speculation.

What we all do know for pretty much fact is that, under the PLC, we would not be wasting millions of pounds paying off borrowings/interest/etc.

 

[De Selby]

Sorry, but that's all arbitary really.

You have no idea what the PLC would or would not have done, so to speculate to prove a point is a little misguided. To suggest that the PLC could not possibly have had the forsight to move into second-tier sponsorships is total speculation.

What we all do know for pretty much fact is that, under the PLC, we would not be wasting millions of pounds paying off borrowings/interest/etc.

Exactly. The Glazer apologists' argument isn't legitimate because it's based on supposition.

Can they say with any certainty that a training kit deal like the one with DHL couldn't have been done under the PLC? How about the deal with Turkish Airlines? You can't.

 

[Pexbo]

Sorry, but that's all arbitary really.

You have no idea what the PLC would or would not have done, so to speculate to prove a point is a little misguided. To suggest that the PLC could not possibly have had the forsight to move into second-tier sponsorships is total speculation.

What we all do know for pretty much fact is that, under the PLC, we would not be wasting millions of pounds paying off borrowings/interest/etc.

Ever heard of dividends? (On my phone so i cant find the exact figures but i think I posted them in here so have a search) When we were earning £40m a season we paid something like £15m to shareholders in dividends. At that rate, earning

 

[Pexbo]

Sorry, but that's all arbitary really.

You have no idea what the PLC would or would not have done, so to speculate to prove a point is a little misguided. To suggest that the PLC could not possibly have had the forsight to move into second-tier sponsorships is total speculation.

What we all do know for pretty much fact is that, under the PLC, we would not be wasting millions of pounds paying off borrowings/interest/etc.

Ever heard of dividends? (On my phone so i cant find the exact figures but i think I posted them in here so have a search) When we were earning £40m a season we paid something like £15m to shareholders in dividends. At that rate, earning £111m as we did last year we would have paid £41m in dividends.

Something to think about.

 

[Annihilate Now!]

Ever heard of dividends? (On my phone so i cant find the exact figures but i think I posted them in here so have a search) When we were earning £40m a season we paid something like £15m to shareholders in dividends. At that rate, earning

... Are you saying that being in debt is more desirable then paying dividends to shareholders

 

[711]

Exactly. The Glazer apologists' argument isn't legitimate because it's based on supposition.

Can they say with any certainty that a training kit deal like the one with DHL couldn't have been done under the PLC? How about the deal with Turkish Airlines? You can't.

You can say the old plc were commercially very successful compared to their rivals at the time though. To claim 'what they would have done' is bollocks. Then again it's the one and only positive thing the Glazer-lovers can come up with, so rest assured they will repeat it ad nauseam, bollocks though it is.

 

[Transfer United Till I Die]

One concern I do have is that we can't afford to spend big this summer because we need a strong balance sheet to get the IPO away. I'm seeing a lot of stories linking us with player's who in the past we wouldn't have touched. The links might be bollocks but I've seen three reasonably well connected journos saying we were looking at diame. Aside from kagawa, who is a cheapish and self financing deal we don't seem to be doing much. Hopefully I'll be proved wrong.

 

[Pexbo]

... Are you saying that being in debt is more desirable then paying dividends to shareholders :con fused:

Debt is a word of propaganda. Debt is normal in business, thousands of successful businesses operate in debt making healthy profits just like us.

Think of it as a mortgage. Would you rather your favourite pub was owned by a crap landlord with no mortgage who took out a wage but didn't make enough money to hire any quality barmaids and chefs.

Or would you rather having a landlord who had a big mortgage that he could pay comfortably and did so well that he could afford to higher a good standard of staff and make the place pleasant to come to as well?

 

[Transfer United Till I Die]

Debt is a word of propaganda. Debt is normal in business, thousands of successful businesses operate in debt making healthy profits just like us.

Think of it as a mortgage. Would you rather your favourite pub was owned by a crap landlord with no mortgage who took out a wage but didn't make enough money to hire any quality barmaids and chefs.

Or would you rather having a landlord who had a big mortgage that he could pay comfortably and did so well that he could afford to higher a good standard of staff and make the place pleasant to come to as well?

If the debt werent a problem mate we wouldn't be looking at an IPO.

 

[Pexbo]

If the debt werent a problem mate we wouldn't be looking at an IPO.

We were always going to look to move the loan sources around, it's sensible and part of the management of the debt. Its only because of the state of the economy that we are going down that route. We would be looking to the banks in a healthier climate.

 

[711]

Think of it as a mortgage. Would you rather your favourite pub was owned by a crap landlord with no mortgage who took out a wage but didn't make enough money to hire any quality barmaids and chefs.

Ah, a mortgage. Well I've paid my mortgage off, so there's nothing to stop me taking out another one, giving the money to some cnut else, and then all I'd have to do is go back to paying it off. And, as I could afford to do so, what could I possibly have to complain about? Apart from having less money at the end of it, which is where the analogy starts to seem not so stupid after all.

 

[Transfer United Till I Die]

We were always going to look to move the loan sources around, it's sensible and part of the management of the debt. Its only because of the state of the economy that we are going down that route. We would be looking to the banks in a healthier climate.

Im sorry mate, that's bobbins. They are doing it because as we are we can't compete in the transfer market. If the team goes to shit the whole house of cards falls down.

 

[GCHQ]

Sorry, but that's all arbitary really.

You have no idea what the PLC would or would not have done, so to speculate to prove a point is a little misguided. To suggest that the PLC could not possibly have had the forsight to move into second-tier sponsorships is total speculation.

What we all do know for pretty much fact is that, under the PLC, we would not be wasting millions of pounds paying off borrowings/interest/etc.

By the same token, do you think it would have been healthy for the PLC to have remained in place with its two biggest shareholders in open conflict with the club's manager?

And people wonder why Fergie's so happy under the Glazers ownership...

 

[Will Absolute]

Im sorry mate, that's bobbins. They are doing it because as we are we can't compete in the transfer market. If the team goes to shit the whole house of cards falls down.

I don't know why the Glazers are considering an IPO - they could have a number of good financial reasons - but I wouldn't be surprised if fan agitation has played some role. Just get shot of the DEBT once and for all.

I doubt the transfer market has anything to do with it. We're generating lots of surplus cash - almost £200M in the bank at one stage, accumulated in a couple of years - so that provides plenty of money for transfers.

 

[GCHQ]

I don't know why the Glazers are considering an IPO - they could have a number of good financial reasons - but I wouldn't be surprised if fan agitation has played some role. Just get shot of the DEBT once and for all.

I doubt the transfer market has anything to do with it. We're generating lots of surplus cash - almost £200M in the bank at one stage, accumulated in a couple of years - so that provides plenty of money for transfers.

Yup, and it's not as if lower interest payments makes any difference in terms of controlling wages as a percentage of turnover.

 

[De Selby]

By the same token, do you think it would have been healthy for the PLC to have remained in place with its two biggest shareholders in open conflict with the club's manager?

And people wonder why Fergie's so happy under the Glazers ownership...

That mess was mostly Ferguson's doing, though.

 

[Annihilate Now!]

By the same token, do you think it would have been healthy for the PLC to have remained in place with its two biggest shareholders in open conflict with the club's manager?

And people wonder why Fergie's so happy under the Glazers ownership...

That's an incredible topic shift/diversion, and is a totally different subject matter altogether.

 

[GCHQ]

That's an incredible topic shift/diversion, and is a totally different subject matter altogether.

It's extremely relevant though isn't it when we're looking at a comparison between what would have most likely happened under the PLC and what has actually happened under the Glazers ownership.

Removing the Irish was a massive boost to Fergie and the stability of the club. We have the Glazers to thank for that. Do you accept that?

 

[Transfer United Till I Die]

I don't know why the Glazers are considering an IPO - they could have a number of good financial reasons - but I wouldn't be surprised if fan agitation has played some role. Just get shot of the DEBT once and for all.

I doubt the transfer market has anything to do with it. We're generating lots of surplus cash - almost £200M in the bank at one stage, accumulated in a couple of years - so that provides plenty of money for transfers.

1) we did not have nearly £200m
2) a large part of the cash surplus was the ronaldo money
3) we shit over £70m on debt costs
4) we do not make loads of surplus money.
5) where do you think that big cash like has gone?

 

[GCHQ]

That mess was mostly Ferguson's doing, though.

Quite possibly so but it still happened and something needed to be done to sort the situation out. Enter Malcolm Glazer.