Depends on the detail of the deal though and exactly how much exposure is promised to the sponsor, which could be quite different for each club.
If all else was equal, then yes ours would be higher.
ALL issues relating to the bond issue and club finances
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Depends on the detail of the deal though and exactly how much exposure is promised to the sponsor, which could be quite different for each club.
If all else was equal, then yes ours would be higher.
Exactly - it was definitely a strange time to goto market and I commented on the potential for the float being pulled when it was first announced. The Glazers obviously have some big decisions to make now on whether to go ahead or not.
BTW where did you get those pie charts etc? Is it your own work?
He's like the fecking Wizard of Oz. "Pay no attention to the half a billion pounds the club has paid out to service debt it did not incur itself but through the leveraged takeover by the Glazers". Were the Glazers responsible for United's increase in revenue in the 90s? Was it their divine guidance that allowed SAF to knock Liverpool off their perch? It's called rationalizing. Suggesting that it's good that we've shipped out almost as much money in debt payments as City has paid for players is a good thing is ludicrous. There is no positive to the club being laden with so much debt, none. The money that has been used to service it could have been used to prevent ticket price increases, buying players, paying tax, or dividends. All of those are far more worthwhile than paying off someone else's debt because they refused to take on the risk themselves.
Seriously, how much are you paid to post this garbage on the Caf? You are like the false accounts companies set up on facebook to defend themselves with.
Where's those "hundreds of Millions" gone? The debt has remained consistent over the Glazers tenure, and there's been no massive net outlay on players.
The rest of your post was too arrogant on your part to even worth responding.
Interesting point; I've had similar thoughts every time a new name is added to things like the interview boards in the tunnel.
Indeed; I'm not just interested in the financial details, more the complete package of the deals each team have struck with the same company/people - a rare opportunity to compare performance in potentially similar circumstances.
Everytime I read one of GCHQ's posts I want rip my own eyes out. It's everything I hate about football compressed into a few paragraphs. I'm thinking maybe I should stick him on ignore from now on
GCHQ = Glazor Company Head Quarters ?
No wonder...
No wonder...
I always overlook GCHQ's posts. He is the Glazer's Goebells. Nothing but bullshit propaganda.
Everytime I read one of GCHQ's posts I want rip my own eyes out. It's everything I hate about football compressed into a few paragraphs. I'm thinking maybe I should stick him on ignore from now on
Correct.
GCHQ is another waste of club cash related to the Glazers.
Much of that money has gone straight to the club's players! It's enabled the club to sustain the fastest growing wage bill (in real terms) in the Premier League over the past seven years with the exception of Manchester City.
I really think that everyone should just take a minute to think about that.
It means that our wage bill has increased by more than Chelsea's in the last seven years.
That's extraordinary!
The (almost) unique terms of the Nike deal make any direct comparison with another club pretty tricky I'm afraid.
What we can do is look at things like the DHL deal and the 15 separate telecommunications deals in 44 countries. That sets us well apart from the opposition.
Exemplary attempt at side-stepping the question.
The fact is we have increased our Commercial revenue at a relatively modest level in comparison to the likes of Liverpool, Madrid, Barcelona and Bayern.
The bizarre thing is that our shirt deal is pretty awful in comparison to what we should be receiving, because the Glazer's needed a chunk of the money up front.
It's also worth pointing out that the Nike deal the PLC signed is still one of the best deals of any club in world football to this day (arguably the best)... despite being signed nearly a decade ago. Hardly the kind of deal a couple of noddies would have negotiated.
The DHL deal is great, as are the other deals that we are signing. But again we aren't doing anything that other clubs of our stature are doing. It's pretty basic stuff selling a product like the aforementioned clubs.
Did you actually read the content of my post?
And frankly that was just the tip of the iceberg in terms of the positives that we can take from the Glazers takeover.
What about that fact that their takeover removed the previous largest shareholders who were in open conflict with the most successful manager in the club's history, Sir Alex Ferguson? You don't think that was an important moment for the club. Christ, no wonder Fergie loves them.
Firstly the shareholders you mention would have done nothing to harm the club's share price, and secondly Fergie has never said he loves them.
If you were any good at your job you would occasionally criticise the Glazers to appear at least a little even-handed, as it is you're coming across as clutching at straws all the time.
I don't have the real terms increases in commercial revenue between 2005 and 2011/12 of those clubs to hand to be honest. In spite of that I'm extremely confident that we've achieved a higher real terms increase in commercial revenue in the period covering 2005-2012 than Liverpool or any other PL club.
We receive more from our shirt sponsor than both Real Madrid and Bayern Munich. If that's ''pretty awful'' then god knows what amount it would take for you to be pleased with the deal.
The Nike deal isn't a straight comparison! It includes the fact that Nike get to keep all of our merchandising revenue (we're talking about £25m-£30m here judging from MUML latest accounts)! It's a fecking terrible deal.
I don't agree. They were making life extremely uncomfortable for Fergie and the 99 questions was clearly an attempt to force him to ride off into the sunset.
I like to bring some semblance of balance to the argument and the points that I make are entirely valid. People just want to end all debate by shouting ''Interest payments'', ''Debt'', ''the Glazers are bad'' as loud as they can. Well I'm sorry but there's rather a lot more to it than that and that's where I come in.
The questions were more than an attempt to force him to back down in their dispute, and they succeeded. They weren't stupid enough to risk affecting the share price though. They did what they always said they wanted to do, and that is make a good profit on their shares.
To bring the Glazers into that is just spin, you're running out of ideas.
Seriously, stop it!
If I recall correctly players salaries are consistently kept at around 50% of clubs income. Most of the money during Glazers tenure has been lost in interest payments and ownership related costs (500 Million?)
One thing they definatley haven't done is get the players Fergson wanted, we can no longer compete in that sense thats for sure. You only have to look at how were going round throwing stupidly low bids in in the knowledge they will be rejected.
You should list some of the negatives sometimes it may make your argument stand up a bit more. Infact a question to you do you think there are any negatives to the Glazer ownership?
If I were working in United's commercial department I certainly wouldn't be high-fiving and chest-bumping having just negotiated a deal that Liverpool in their current state could achieve. You must at least recognise that having to ask for a huge slice of the money up front would have cost us quite a significant amount?
In terms of a % increase in Commercial revenue Liverpool have seriously outdone us since 2006. But one could argue that it's partly because of their lower base (£37m in 2006 vs our £55m). If you prefer pounds and pennies then Madrid, Barcelona and Bayern have all outdone us quite easily.
I really don't know how anyone could seriously attribute such increases to the Glazer's, when clubs domestically have increased commercial revenue at a faster pace and clubs abroad have increased it by a higher value. This is even despite the English market for sponsorships being at a far less volatile situation than in say Spain.
Irrespective of this no-one could possibly argue that the Glazer's taking over was a good or even semi-ok thing, the only question is the degree of bad.
With apologies to JP Donleavy, that would either be bad, evil, or fecking bad evil.
At best that's like telling a man who has had his leg amputated that he won't need to worry about that nasty case of athlete's foot anymore.
The fact that investors in 3 different markets have basically rejected the Glazers IPO offering says everything - when there is money to be made, there will never be a shortage of buyers, the fact that interest in the IPO from market watchers has been less that tepid shows how little confidence they have in Uniteds business plan
Its all beyond me this financial stuff but I'm left wondering where the £200m goes each year? Some of it no doubt, goes towards loan repayments and such but a chunk of it will be left for repayment of the debt, no?
Yep, and there may be some left for giving money back to folk who have lent it to the club too...
Seriously though, there's some pretty thorough stats in this very thread, including some decent infographcis just a page or two back.
Not sure why people are using Liverpool as an example. Based on that wiki link they had some growth from 06-09, however since they've had negative growth while we've continued to increase our net revenue. In comparison to Real and Barcelona, we also don't benefit from a grossly unfair tv rights deal that see's them generate over a 3rd of their net income while United's generates roughly around 20%. If anything we should be using Arsenal and Bayern as solid references.
Nike don't keep all the merchandising revenue. Any net profits are shared equally between the company and United.
I guess I should post this here - it's already in the other thread.
United's Commercial revenue was £46.26m in 1999, £46.57m in 2001, £46.19m in 2003 and £42.49m in 2005. If we adjust 2005 to 12 months (the accounts are for an 11 month year) we get an estimated £46.35m for the full year. All the other years between 1999 and 2005 were below £46m, some of them considerably so. It's hard to think of a better definition of "no growth". The amazing thing is that, during this time span, we switched from Sharp to Vodafone and from Umbro to Nike - without generating any overall growth in Commercial revenue. Now it's possible that these guys might suddenly have got religion or (more likely) got fired, but I really doubt if they'd have managed to generate the growth we've seen since 2005 without a lot of help.
At the time the AON deal was signed (in 2009) it was the best deal in world football. All power to Liverpool who managed to screw a similar deal out of S&C a couple of months later - their 2009 season was probably a big help. (Wonder how S&C feel about it now - oops.)
I dug around in Real and Bayern a little and it looks like for both of them Commercial revenue grew by a little over 27% over the 2005-2011 period. United's grew from £42.49m (£46.35m adjusted) to £103.44m. That's a growth of 143.4% (123.2% adjusted). That certainly seems to be something that neither Real nor Bayern achieved. (Both Real and Bayern have quirks in the numbers that get reported for them that can make the growth look bigger - Bayern because they consolidated the accounts for the Allianz arena into their own accounts in 2008 after they bought out 1860, and Real because Deloitte take Member fees out of Matchday, where Real report them, and add them into Commercial.) I got bored after I did Real and Bayern. I'm sure that Barcelona would have been much more like United - their overall growth has been amazing - and I've no idea about (and no interest in) Liverpool, although I'd assume that the S&C deal gave them a big lift.
[Edit: Took a quick look at Barcelona. In 2005 (converting at the exchange rates at the time) their Commercial revenue was about 70% of ours; in 2011 it was about 15% bigger than ours. (Some of that was exchange rates - converting the 2011 figures at 2005 rates would have them about 5% behind us.) No matter, in terms of their own currency (Euros) their growth in Commercial revenue over the period was 197%. (For comparison, their total revenues grew by 147%.) Amazing - don't you wish we had Messi, Xavi, Iniesta, et al. - think of the shirts we could sell!]
Yep, and there may be some left for giving money back to folk who have lent it to the club too...
Seriously though, there's some pretty thorough stats in this very thread, including some decent infographcis just a page or two back.
They are pretty but not very informative. Apart from comparing 1998-2005 (8 years) with 2006-2012Q3 (a bit less than 7 years) they present incomplete information and hence only tell a partial story. A more complete set of figures is below for anyone who's interested.
There are two main take-aways: 1) the most the Glazers could have cost us over the period is around £147m, and 2) since the takeover, we've spent almost the same proportion of our total income (Revenue + Player Sales) on total player costs (Staff Costs + Player Purchases) that we did for the seven years before the takeover (around 58%).
The "Glazer cost" is probably an overestimate. There's an implicit assumption that the PLC could have generated identical revenues to those that have actually occurred since the takeover, which is unlikely for a variety of reasons. (There's also an assumption that taxes and dividends would scale in proportion to revenues.) It also doesn't take into account increases in Cash and Marketable Securities (mostly because it's virtually impossible to do using Q3 figures). A little more accuracy in either area would reduce the "cost" markedly. (Note that this is the extra money that might have been available over the period 2006-2012Q3 had there not been a takeover. It says nothing about costs that might arise in the future or imputed costs that have had no cash flow impact on the club (adding those in is how you get up toward the oft quoted £500m figure).
The makeup of "total player costs" has changed somewhat since the takeover, with salaries forming a larger component relative to transfer fees than in the earlier period. When you look at the bigger picture in this way, I think it becomes apparent that "net spend" is a pretty meaningless figure.
There are three sources of income:
Media - mostly outside the Glazers' control.
Matchday - could have been increased in the same way by any owners if they so wished. In fact compared to other services like travel or hotels then football ticketing is extremely unsophisticated, but that's another story.
Commercial - well once again pro-Glazer people claim only they could have increased commercial revenue in such a manner, a plc never could. An argument that can't be proved, or more importantly for them, disproved.
feck-all there mate.
Media - mostly outside the Glazers' control.
Matchday - could have been increased in the same way by any owners if they so wished. In fact compared to other services like travel or hotels then football ticketing is extremely unsophisticated, but that's another story.
Commercial - well once again pro-Glazer people claim only they could have increased commercial revenue in such a manner, a plc never could. An argument that can't be proved, or more importantly for them, disproved.
feck-all there mate.
I don't follow that part of the figures at all - the "Projected PLC" profits and the "Glazer Costs". Can you explain?
To be fair, especially when it comes to commercial revenue, I remember there were talks around the time of the takeover that the Glazers felt we didn't have a good enough plan (or something to that effect). Could the PLC, if kept, had improved our income in that department? Of course. But for whatever reason, it didn't until then.
It's nothing at all to do with the Glazers - anyone competent could have done it, even the PLC. The fact that the PLC wasn't doing it is what made the takeover possible - it represented a substantial reservoir of untapped value.
The law that makes interest on any loan tax deductible made it possible.
I'll try. The basic idea is to look at the operating cash flows in and out of the company. So Revenues, Player Sales and Fixed Asset Sales are the main inflows; Staff Costs, Other Operating Expenses, Player Purchases and Fixed Asset Purchases are the main outflows. For the PLC, what's left over is what's available to invest in working capital and to pay taxes and dividends. Anything left over after that goes to increase (or decrease) cash.
When we do the exercise for the period 2006-2012, the operating flows in and out leave us with £380m. Once we've allowed for changes in working capital and cash, whatever is left is what the Glazers have spent. However that's not the same thing as what the Glazers have cost us - to get an idea of that we need to figure out what the alternative would be. The easiest alternative is just to assume that the PLC continued and operated just like the company actually did post-takeover. That means that we need to get a sense of what the dividends and taxes would be. What I did was simply to scale up the OPLNAP using the same growth rate as the revenues (77.9%). That gave £233m - which is pretty much what you get for taxes and dividends if you recast the financial statements assuming no Interest and Goodwill - and when you take that off the £380m you're left with £147m.
There are lots of ifs, ands and buts that arise from this sort of analysis but, by identifying the cash that goes in and out of the company through operations, we can argue that what's left is what is available for "wasting". In the PLC it was "wasted" on taxes and dividends; the Glazers "wasted" it on interest payments, debt repayments, etc. The "cost" of the Glazers is the amount they "wasted" in excess of what the PLC would have "wasted". And that's the amount that would have been available to be spent on other things.
Of course the biggest issue is the assumption that the PLC would have generated the same revenues. If we don't think that would have happened, then the amount for "wasting" would have been less and hence the Glazer "cost" would be less. The way I think about it is that the £147m is the upper limit - the reality may be less, but that's always going to be open to debate and we'll never know with any certainty. (One last point - if at the end of 2012Q4 we find that there has been a big change in cash, then the £147m would need to be adjusted to reflect the change.)
Certainly helps, but it's very hard to take over a company that doesn't have some unrealised value. The Glazers paid a substantial premium in the takeover which could only be justified if they thought the company was worth more than the market's valuation. And the only way that happens is if the company is not making the best use of it's assets - in this case the brand.
The general argument for interest deductibility is that it lowers the cost of capital and hence makes investment more attractive. Without it there would be less investment and hence lower employment. That's why you're unlikely to get far with a proposal to eliminate deductibility.
Your only point seems to be that increased commercial revenue has been able to meet the Glazers' interest payments, less a paltry £140m, so their takeover's quite ok really.
Pre-Glazer United had the the best marketing in the league, and it is reasonable to expect that they would have moved with the times and also increased it substantially, and importantly then spent the majority of that increase on the team and the ground as they did before. And not waste it (and more) on interest payments.
Does the club get to keep a % of the gates from these games?
From MUST
Every United supporter (and potential MUFC share purchaser) should get a copy of the Sunday Times today
The Sunday Times July 29, 2012 at 7:06 am
Michael Moritz is a top Silicon Valley investor — and a Manchester United fan. He offers an alternative reading of its float prospectus
WE recently changed our corporate name from Red Football LLC to Manchester United Ltd because we thought the former might be considered un-American and confuse prospective purchasers of our shares with the former Soviet Union’s national team.
Our business is a globally recognised brand and we estimate 10% of the world’s population follow our football team. For our entire 2011 fiscal year our revenue was $513m (£326m) — roughly equivalent to the revenue Google generates every five days.
Our club is being listed in New York because legal and regulatory restrictions are more favourable to people who place enormous amounts of debt on companies than in other venues we have considered — such as London, Singapore and Hong Kong.
We have more than $1 billion of debt due within the next 220 weeks that we have no means of repaying. All the assets of the club have been mortgaged against these debts, including our training ground and even our interest in a small freight warehouse.
Since July 2008, we have paid $792m in interest and other finance costs which is more than Sir Alex Ferguson, our distinguished manager, has paid for all the players he has purchased during the past 20 years.
Because we are so desperate to raise money, our corporate tax rate will rise from the 27% levied in the UK to the 35% required in America.
Our legal structure ensures the Glazer family, our main shareholder, will maintain absolute control over the company after the offering. Between 2001 and 2009 our club paid the Glazers a total of $25m in fees and gave them a $15m loan.
Our executive co-chairman, Avram Glazer, was previously the chief executive of Zapata Corp, a fish-oil producer, that once attempted to become an internet company by changing its name to Zap.com. Zapata was bought in 2009 by Philip Falcone of Harbinger Capital who, last month, was charged with securities fraud by the Securities and Exchange Commission.
Our business model is to help the Glazer family, our controlling shareholder, stay one step ahead of the banks. We employ a variety of approaches to achieve this including:
¦ Raising ticket prices. Between 2005 and 2011 we were able to raise the average ticket price by almost 6% a year, which was almost double the rate of inflation in the UK during the same period.
¦ Increasing sponsorship revenue. Guests of our corporate sponsors, such as Nike, DHL, Aon or Turkish Airlines, will soon be able to view our players’ private training sessions. We used to conduct these activities in strict privacy.
¦ Boosting merchandise sales. Our new team shirts (which differ for home and away games) sell for $85. We sell many other branded products including car air fresheners, short nighties for women, four-poster bed canopies and a special men’s fragrance — Eau de Sport.
The competition for player and management talent in the Premier League is intense and our rival owners includes Russian oligarchs, Middle Eastern sovereigns, Indian chicken farmers and American hedge fund managers. Some of these have access to cash — which, unless this offering is successful, we do not.
Fortunately we don’t have to comply with the same reporting obligations as other public companies because our business qualifies in America under the newly passed Jobs Act as an “emerging growth company”. We emerged 134 years ago and in the past nine months our growth was 6%. The word “company” does apply to our club — although in a limited manner.
Old Trafford, our home ground, is called “The Theatre of Dreams”. Prospective purchasers of our stock will understand why.
¦ Michael Moritz is chairman of Sequoia Capital
Every United supporter (and potential MUFC share purchaser) should get a copy of the Sunday Times today
The Sunday Times July 29, 2012 at 7:06 am
Michael Moritz is a top Silicon Valley investor — and a Manchester United fan. He offers an alternative reading of its float prospectus
WE recently changed our corporate name from Red Football LLC to Manchester United Ltd because we thought the former might be considered un-American and confuse prospective purchasers of our shares with the former Soviet Union’s national team.
Our business is a globally recognised brand and we estimate 10% of the world’s population follow our football team. For our entire 2011 fiscal year our revenue was $513m (£326m) — roughly equivalent to the revenue Google generates every five days.
Our club is being listed in New York because legal and regulatory restrictions are more favourable to people who place enormous amounts of debt on companies than in other venues we have considered — such as London, Singapore and Hong Kong.
We have more than $1 billion of debt due within the next 220 weeks that we have no means of repaying. All the assets of the club have been mortgaged against these debts, including our training ground and even our interest in a small freight warehouse.
Since July 2008, we have paid $792m in interest and other finance costs which is more than Sir Alex Ferguson, our distinguished manager, has paid for all the players he has purchased during the past 20 years.
Because we are so desperate to raise money, our corporate tax rate will rise from the 27% levied in the UK to the 35% required in America.
Our legal structure ensures the Glazer family, our main shareholder, will maintain absolute control over the company after the offering. Between 2001 and 2009 our club paid the Glazers a total of $25m in fees and gave them a $15m loan.
Our executive co-chairman, Avram Glazer, was previously the chief executive of Zapata Corp, a fish-oil producer, that once attempted to become an internet company by changing its name to Zap.com. Zapata was bought in 2009 by Philip Falcone of Harbinger Capital who, last month, was charged with securities fraud by the Securities and Exchange Commission.
Our business model is to help the Glazer family, our controlling shareholder, stay one step ahead of the banks. We employ a variety of approaches to achieve this including:
¦ Raising ticket prices. Between 2005 and 2011 we were able to raise the average ticket price by almost 6% a year, which was almost double the rate of inflation in the UK during the same period.
¦ Increasing sponsorship revenue. Guests of our corporate sponsors, such as Nike, DHL, Aon or Turkish Airlines, will soon be able to view our players’ private training sessions. We used to conduct these activities in strict privacy.
¦ Boosting merchandise sales. Our new team shirts (which differ for home and away games) sell for $85. We sell many other branded products including car air fresheners, short nighties for women, four-poster bed canopies and a special men’s fragrance — Eau de Sport.
The competition for player and management talent in the Premier League is intense and our rival owners includes Russian oligarchs, Middle Eastern sovereigns, Indian chicken farmers and American hedge fund managers. Some of these have access to cash — which, unless this offering is successful, we do not.
Fortunately we don’t have to comply with the same reporting obligations as other public companies because our business qualifies in America under the newly passed Jobs Act as an “emerging growth company”. We emerged 134 years ago and in the past nine months our growth was 6%. The word “company” does apply to our club — although in a limited manner.
Old Trafford, our home ground, is called “The Theatre of Dreams”. Prospective purchasers of our stock will understand why.
¦ Michael Moritz is chairman of Sequoia Capital
That's a very weak argument - mostly as in Man Utd's case it's a recipe for less tax revenue, higher consumer prices and enrichment of the new owners.
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