It's pretty obvious Glazer Crevice is either on holiday or got a new job.
ALL issues relating to the bond issue and club finances
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It's pretty obvious Glazer Crevice is either on holiday or got a new job.
Palma is in the line for the weekend and work can be done on the computer/mobile but don't worry we will find a proper defence
You know Money never sleeps...
De Gea, Antonio Valencia, Phil Jones, Chris Smalling, Javier Hernandez, Kagawa, Powell all came for free right?
No, they've come from the £25m a year that the Glazers said we'd spend. Valencia's the only one you can justify out of the "Ronaldo money" as he was the right winger we needed to buy. De Gea replaced Van Der Sar who we got on the cheap anyway. Kagawa was bought because we hadn't pushed the boat out for Snjeider the year previous. Smalling and Jones were to replace O'Shea, Brown and Neville. Hernandez was covered by the sales of Foster and Tosic a few weeks previous. Powell's complete deal will be £6m and will pay for itself either with achievement or resale.
So, with us floating on the NY exchange - could anyone break down for me/us if there is a realistic chance of this being a step towards eliminating the debt?
I haven't have the time to sit down and read all of the above.
I haven't have the time to sit down and read all of the above.
Lots of good info in the thread. Pretty lazy not to bother to read people's posts but then expect them to re-summarise what they have already written. Remarkable really.
Since i'm in a good mood, this takes 10 minutes and will tell you all you need to know re. the IPO and the state of the club's finances.
http://swissramble.blogspot.co.uk/
It is definitely a risk in the current markets, especially with the added negative of the lack of voting power.
As I mentioned before, the rumours of a split among the Glazer siblings may well be true - perhaps some of them are ready to cash in due to worries about Fergie leaving etc whereas others want to hold for the longer term.
I'd be very suprised if they sold any shares at a £1bn valuation, more likely they will just pull the float - which as you say, would be a massive loss of face.
I agree with that Rood. And I dont think the loss of face thing is a factor that is likely to influence them one way or the other. The Glazers have never given me the impression they care about how their actions are perceived. They care about money and the decision they make will be based entirely on what will be best for them financially.
I am sure there would have been fees already earned by the banks on work that have done preparing the ground for a deal, but not so much it would be a reason not to proceed with an IPO they were not happy with.
It would definitely cost a few million quid, how much exactly I dont really know.
Legal/Acc/printing fees will have to be paid in full. The banking fees will still be paid although the % commission will not be. In the UK this is generally called a corporate finance fee. If they were raising £100m, a CFF of c. £250 - £500k, all of their out-of-pocket expenses (travel/accomodation etc.) would be paid regardless of whether the deal finishes or not.
The real money is in the commission though. Should be around 3% in the UK - little more in the US. Excluding the % commission, I'd say anywhere between c.£5m-£10m.
And there is 0 chance of them pulling the float unless the valuation is way below their expectation levels.
The real money is in the commission though. Should be around 3% in the UK - little more in the US. Excluding the % commission, I'd say anywhere between c.£5m-£10m.
And there is 0 chance of them pulling the float unless the valuation is way below their expectation levels.
Cheers.
Just that read. A very interesting read since I haven't been following these matters closely. Also quite the depressing reminder of what could have been had the Glazers not been allowed to buy the club.
I'm very hopeful for this IPO to be honest. I'm hoping we raise about 200 million pounds from it, which would put us almost debt free within 2 or 3 years.
Has to be said the press reaction and expert journalism e.g.in the FT and the Times has been largely sombre about this move. The articles seem balanced saying it is a positive move for the club if successful and that the clubs revenues are strong but all of them suggest it's a big gamble and the clubs isn't worth nearly the sort of valuation the owners are seeking to get. Seems a bit of a desperate time to do it but I am all for this.
Few more years and the Glazer's will be gone which is only likely to be positive.
Few more years and the Glazer's will be gone which is only likely to be positive.
The Glazers really have stretched the definition of 'right and proper persons' who are 'fit' to hold directorships in a business. Bizarre how such loose financial controls go completely unenforced in the UK now. Regulation seems to have completely disappeared from the world of finance - despite the credit crunch.
Well its a bit more than a simple loss of face. Whether they like it or not and whether they actually go through with the float or not, the fact is that the valuations indicated through this process will become a reference point for the future. How much is a matter of debate but its certain that this will affect valuations for any future float, strategic sale etc.
They're certainly taking a leap of faith here. Maybe there's something to Rood's theory about internal issues in the family.
Thank you!
That is a decent and detailed summary.
What really annoys me is how wasteful the bond has been. Millions wasted in advisory fees, listing fees, swap losses, buy back premiums etc. etc. all for a an extremely expensive loan that they're now looking to extinguish (or atleast seriously shrink) within 3 years. For all the talk of them being smart operators, this whole destruction of value was a pretty stupid move. Its not like conditions have changed hugely since then or some incredibly unanticipated event has happened so there's no real excuse.
Someone like Anders Red should do an estimation. It wouldn't surprise me if it turned out that all the Ronaldo cash was spent on some ultimately pointless financial re-engineering exercise.
the whole LBO has been wasteful at the end of the day. The commercial and ticket gains IMO could have been captured almost as well without bleeding the club of 500 million quid in opportunity cost.
And this is why i do not believe football clubs should be a 'business'. The business of the club isn't to increase in asset value or make profit hand over fist. It is to win trophies.
I liken football clubs to institutions like Universities and Museums. They should be cultural and 'non-profit' institutions whose main goal is not monetary.
It is why the more i think about it, i don't mind big billionaire money coming into football provided they are doing with equity purchase and not loans that the club has to repay at some point.
Football is art and life....If i had 40 billion in the bank, you can be sure I would buy united and support it like how the great patrons in the renaissance supported their artists as they made masterpieces.
Can somebody please clarify for me, what is the clubs debt to equity ratio currently? Somebody asking me this and I'm not too sure on this.
The Swiss Ramble is probably the single best source you can use for this stuff. Andersred is also good, but he has an obvious bias (which is fair enough).
Very interesting figures in the article. What is striking is the unbelievable job Ferguson has done keeping us competitive with one hand tied behind his back.
Our rivals must be kicking themselves that none of them have taken advantage of our situation, and we have come through a difficult period relatively unscathed.
It seems the worst part of the financial nightmare may soon be behind us, and that's only a good thing.
barca certainly took advantage.
imagine if ferguson followed what he said in 'managing my life' regarding the mistake he made with the 99 side in not strengthening even more from a position of strength.
He's done it twice now. Let's hope the 3rd european cup winning side he makes actually strikes heavily when the iron is hot.
as an aisde, given this chart from swissramble:
Comparing Madrid's first XI and squad to ours, either madrid players as a whole don't make as much as we think they do or a lot of our lads are over-paid?
Only a 27 million p/a difference in wage bills. That is nothing.
If we had Madrid's wage bill, we would only be running a 55% wage/turnover ratio...well below FFP requirements.
People who feel we can't compete on wages for players due to our turnover should have a word. We certainly can, if there was no useless interest payments and if United were run as a football club first and not a profit-optimization exercise.
Comparing Madrid's first XI and squad to ours, either madrid players as a whole don't make as much as we think they do or a lot of our lads are over-paid?
Only a 27 million p/a difference in wage bills. That is nothing.
If we had Madrid's wage bill, we would only be running a 55% wage/turnover ratio...well below FFP requirements.
People who feel we can't compete on wages for players due to our turnover should have a word. We certainly can, if there was no useless interest payments and if United were run as a football club first and not a profit-optimization exercise.
Barcelona are the greatest football side of all time.
Even with City's resources it's highly debatable if we would have won those finals.
Being beaten by Barcelona hardly paints a picture of a club struggling. We've done unbelievably well under the circumstances.
as an aisde, given this chart from swissramble:
Comparing Madrid's first XI and squad to ours, either madrid players as a whole don't make as much as we think they do or a lot of our lads are over-paid?
Only a 27 million p/a difference in wage bills. That is nothing.
If we had Madrid's wage bill, we would only be running a 55% wage/turnover ratio...well below FFP requirements.
People who feel we can't compete on wages for players due to our turnover should have a word. We certainly can, if there was no useless interest payments and if United were run as a football club first and not a profit-optimization exercise.
I would say that's a tax factor.
Top rate tax is much higher here so we have to pay a lot more gross to make sure the players feel compensated from their net salary.
Madrid don't. Although there were murmurings that this is going to change soon with tax changes in Spain inevitable due to the economy.
Fair enough. Nevertheless, it does show (i know that chart is a year old) that we could easily have 2-3 extra 'rooneys' in the side and still be very comfortable in wage/turnover ratio.
An interesting hypothetical question would be if Ronnie wanted to stay for life, would we pay him the 250+ his talent deserves and rooney 200+ or would we still try to shift one due to 'wage ratio' ?
And I don't mind being beaten by barca; I do mind fergie coming out and saying that they've laid down the mark and we will be reaching it or that we have new ideas to counter them when it looks more like fergie's tactic is to wait for iniesta and messi to turn 30.
I imagine Real Madrid have a thinner squad than us as well. As well as us employing more none playing staff. Didn't a significant part of our wage rise come from opening new places in London?
Wow. Never realized Liverpool spent 70% of their turnover on wages. That's quite a lot. Usually we try to keep ours below 50.
City and The Italian clubs.
City and The Italian clubs.
Very good choice of words - we look for value in the transfer market, but are maybe less strict about obtaining value in our financial juggling.
This is my memory also - the wages is a total for the whole club rather than just the players.
I would therefore assume that back in the PLC days when we apparently had two people doing commercial work compared to the London office we have now that there was a lower drain on wages in general outside of the playing staff (though the lower commercial revenue would have obviously affected the wage ratio).
Perhaps there is a study to be done contrasting the amount spent on the commercial department (recruitment, wages, property, research and studies, etc.) versus the actual increase in commercial revenue?
Since the last reported wage hike in that area, have there been many new ventures announced? I've seen one or two renewals of existing deals, and the change in car sponsor, but has there been anything actually new and innovative recently (or indeed, since the DHL deal, which certainly was innovative)?
Madrid have roughly same number though they rotate much less than we do. It seems they get better value thoughout their squad given their wages where as might pay our shit players better than them?
Furthermore their castilla is pretty large as well.
The comment about taxes does make most sense.
As for non-playing staff, given madrid and barca's commercial deal performance, are we then paying for too much non-playing staff if we have more than they do but not getting the same performance?
Madrid and Barca also benefit from a farcical TV rights deal, so you can't pin the blame on our commercial team for a lack of performance up against that.
I've been saying this for a while. With transfer fees being comparatively very low vs 10-15 years ago, whilst wages are now much, much higher it really doesn't make sense keeping to the arbitrary 50% ratio. Without Fergie's genius we would not have been very successful with such arbitrary constraints.
I think if Ronaldo wanted to stay Fergie would have dug his feet in to the owners and we'd have probably seen pressure in letting other players go/not signed (maybe the likes of Giggs/Scholes wouldn't have been pushed to stay as much as they were and Valencia/Young probably wouldn't have been signed. Also Fergie may also have let Rooney go when he kicked off).
Barcelona/Arsenal spend a modest 53-55% ratio, if we spent the same we'd have an additional c. £11-14m to spend yearly. This would be two top players at £110-140k a week or one World Class player on a wage similar to Rooney.
only comparing commercial revenue between the respective clubs, not tv money.
Very good article, thanks
Sorry but taking wage charts from two years ago and thinking that that's evidence for the Glazers holding back on "two top players" is ever so contrived, especially as such a well run club like Bayern are also clearly adhering to this policy.
The fact that you think keeping Ronaldo would have affected future signings beyond possibly not signing positions of need (it seems likely that either Valencia or Young would not have been bought) is also bizarre.
I mean, feck me, do you really think we would have signed Bebe for 7 million if we were so close to the brink financially? It's not the sign of a club that has been too frugal with signing its targets.
I hate the way a lot of our fanbase think Fergie is working with scraps. He is not. I can only imagine what the reaction would have been if we had signed Dwight Yorke Glazer-era ... who's he comparable to, Darren Bent? Yet Yorke is rightly seen as having a huge impact for those few years when I'm sure we were all clamouring for Batistuta or the like. Ferguson's transfer policy has barely deviated over the years; he's always been a genius Glazers or not, taking players to the next level rather than buying them at their 'pomp'.
The favourable tax law was revoked a couple of years ago but the change does not work retrospectively, so Ronaldo is still part of the old cheaper tax band (as are Lass and Kaka which makes them hard to sell). Mourinho, Ozil etc are taxed at similar rates to the UK. The most noticeable thing about Madrid is that they pay the stars more than we do and the squad players less.
With Barcelona, you're looking at higher wages to a smaller core squad (about 19 players), and again, lower wages to the fringe/youth players.
Don't be ridiculous, Bebe probably earns around £1/2m a year and was a hopeful punt for 5% of our yearly profitability. Totally irrelevant to anything.
You seem to firstly suggest that our prudence with wages is a vital thing thing, then secondly suggest that something would not have had to give if Ronaldo stayed. Clearly the two go hand in hand, you can't keep Ronaldo on £250k a week without something giving if you have a tight, arbitrary cap on wages. Whether Rooney wouldn't have got his contract, 2-3 players wouldn't have been signed or a couple more had to leave, something would have had to give.
I think time has taken its toll on your memory, Dwight Yorke was a club record signing and was in a different league of player to Bent. The fact is between 1998 and 2002 we spent nearly £100m net, which was the vast majority of our net profits at the time (the equivalent would probably be spending £80+m per season for the next 5 - although obviously the transfer fee to wage ratio is far more weighted toward wages nowadays).
Good point. It mentions in the article that the money saved from interest payments could realistically be added to the wage bill.
It's getting to the point when the club will simply have to increase the wage budget if they want to acquire or keep exceptional players. Wages in football are not going to drop that's for sure.
The wages of those non-playing staff will barely make any dent on the total wage bill, relatively speaking.
What would a top marketing exec earn in London? 100k, 150k per annum? Less than what most of our top players earn in a week.
We could hire 50 marketing execs and it would still only be the same as signing one top player.
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