ALL issues relating to the bond issue and club finances

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UnitedRoadRed said:
I'm very pleased for you. I chose not to go to a different area of the ground with a worse view and unknown costs of the cup scheme. Had their been no ACS, my decision may have been different. I may have found somewhere with a slight increase but having sat in most parts of the stadium I can see why some are so much cheaper than others.

The last four years are irrelevant - it skews it because they'd rocketed already and the season ticket waiting list had disintegrated; couple that with the global financial crisis and they knew they couldn't increase them further. Bolton and others were actually reducing their tickets at a time when we were meant to be grateful the Glazers weren't stiffing us again.

I think we agreed to disagree at the time - I assume we'll do the same again. :)
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I can actually totally understand if you stopped going due to the ACS, it is a major hate of mine as well and I know others who stopped because of that. However, I see that as a slightly different issue to ticket price but they are obviously connected when we talk about the annual cost of having a ST.

TBH I didn't move just because of the price, it was also because there is a direct inverse correlation between seat price and atmosphere with the cheaper areas now being better in that regard. But yes you might get a worse view so it depends what your priorities are.

Clubs who decreased prices did so due to lack of demand and unsold seats, our demand has fallen from its peak but the ground is still usually sold out so that is why we wont see a price fall.

When we talk about affordability then you need to look at the price of the cheapest tickets. Worth noting that we have 2 bands of tickets that are cheaper than the least expensive at Anfield, and as I understand it that is the base price at Anfield that actually goes up for some of the bigger matches whereas ours stays the same for all league games.


Pogue Mahone said:
It's a few years back, so my memory is hazy but weren't the really aggressive price hikes in the first year after the takeover all signed off and agreed before the Glazers had a controlling stake?
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Yes it was announced before the takeover was signed off but at URR says, there is still argument over whether the Glazers had influence on that - I personally dont think so because I always understood the rise was done to actually try and protect against the takeover. That is the ironic thing, if the PLC had put up prices earier then it might have discouraged the Glazers from buying the club as there wouldnt have been as much room to increase revenue which was vital to their business model.
 
Rood said:
Yes it is true that the Glazers are only here for profit, that much is obvious. However, I don't agree that there has been any gamble on the long term security of the club - we easily manage to service our debts and the annual interest bill is now falling.

Surely you can see that the best way for them to make a profit is for the club to be successful and to do that they have to invest in players so we can challenge for trophies - our wage bill is one of the highest in the world and I believe we already have a strong squad plus still expect at least 1 more player to be signed.
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We service the debt for now, and spend tens of millions every year doing so. The fact is the debt is huge, even compared to the value of the club.

That leaves the club open to the effect of turbulent markets, especially if the loans need to be refinanced. A lot of people can't borrow money for a house in the UK at the moment, so how easy do you think it is to refinance debt of hundreds of millions against a football club - a club dependant on people throughout the world spending what little cahs they have left every month on TV subscriptions, shirts and tickets?

I agree with your second point - the problem is its much easier said that done. The Glazers don't know football, they know business - i.e: keep costs low to maximise profit, so you'll forgive me if I don't trust that they know the best way forward.

The Glazer way is not the right way, nor do I think the City/Chelsea way is massively healthy either - what I want is the middle line, up there year on year, profits made and money handed to the manager for the odd star signing - without the debt. Essentially what we had pre-Glazer.
 
RedRover said:
We service the debt for now, and spend tens of millions every year doing so. The fact is the debt is huge, even compared to the value of the club.

That leaves the club open to the effect of turbulent markets, especially if the loans need to be refinanced. A lot of people can't borrow money for a house in the UK at the moment, so how easy do you think it is to refinance debt of hundreds of millions against a football club - a club dependant on people throughout the world spending what little cahs they have left every month on TV subscriptions, shirts and tickets?

I agree with your second point - the problem is its much easier said that done. The Glazers don't know football, they know business - i.e: keep costs low to maximise profit, so you'll forgive me if I don't trust that they know the best way forward.

The Glazer way is not the right way, nor do I think the City/Chelsea way is massively healthy either - what I want is the middle line, up there year on year, profits made and money handed to the manager for the odd star signing - without the debt. Essentially what we had pre-Glazer.
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If you consider the club owing only 20% of its worth as debt then it's not bad, especially when you consider the likelihood of income. It's like wanting a £40,000 mortgage on a £200,000 house with a guaranteed income for the life of the mortgage.

While I was part of the Shareholders United movement back in 2005, applauded the effigy of Malc being hung from the Stretford End at half time and so forth, I would suggest that we have to look at where we are and adopt a more pragmatic approach.

The Glazers aren't going anywhere. I also think that we have to look beyond the simple cost of the Glazers that MUST keep banging on about - we do after all look at net transfer spend rather than purely what we've spent when we're looking at investment (or lack of) in the team. If revenue has increased by £100m a year and it's costing us £50m a year to bring that in, then it's not a bad thing. The big problem is obviously the debt but if we're chipping away at that as part of the £50m/year, then it's eventually going to disappear at which point net revenue will increase significantly.

While that still leaves fans disgruntled, it's an open market. The big problem is the lack of local young reds getting to games to be part of the next match-going generation; my dad took me in the 80s and it was £7 between us in the Stretford End - it's increased far more than inflation for me to take my son these days.
 
UnitedRoadRed said:
I don't think anyone outside of Mr Gill and the Glazers could tell you that.:smirk:

The season ticket price rises were confirmed in a match programme at the back end of the season - I think it was the game against Newcastle where Wayne score that goal. Which means it could be either. The unknown factor is how much influence the Glazers had on ticket prices during that takeover process - pure speculation on anyone's behalf to suggest they had none or plenty.
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Rood said:
Yes it was announced before the takeover was signed off but at URR says, there is still argument over whether the Glazers had influence on that - I personally dont think so because I always understood the rise was done to actually try and protect against the takeover. That is the ironic thing, if the PLC had put up prices earier then it might have discouraged the Glazers from buying the club as there wouldnt have been as much room to increase revenue which was vital to their business model.
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Historically, the plc funded all the phases of the stadium expansion with ticket price increases. Given where we were with the quadrants, I don't think that there can be any doubt that ticket prices would have gone up that first season. (The plc raised ticket prices significantly faster than the Glazers have, although the monetary amounts of the Glazer increases have been larger - they started from a higher base.) Then we got going with the massive increases in staff costs (from £436m over the seven years before the takeover to £870m for the seven years since - i.e. they've doubled) so I suspect that the ticket price increases might have continued - the revenue had to come from somewhere, although the new media contracts would have got close to covering the cost increases come the end of 2008 (which is when the Glazer increases slowed down).
 
UnitedRoadRed said:
An Arsenal fan told me that they are (or were when he said it) only billed for the home CL matches and had a choice on the KO cups.

Obviously ours has changed now (thanks to the MUST-instigated OFT review) but they have changed the loyalty pot configuration to take into account the cup scheme.
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My memory is that Arsenal's cheapest season tickets are more expensive than our most expensive tickets. I know our average price is lower than Liverpool's - and Spurs and Chelsea are also significantly higher. So I guess we've got the lowest prices of our peer group - for what that's worth.

[Edit: All right, I forgot City - still can't think of them as being in our peer group.]
 
RedRover said:
We service the debt for now, and spend tens of millions every year doing so. The fact is the debt is huge, even compared to the value of the club.

That leaves the club open to the effect of turbulent markets, especially if the loans need to be refinanced. A lot of people can't borrow money for a house in the UK at the moment, so how easy do you think it is to refinance debt of hundreds of millions against a football club - a club dependant on people throughout the world spending what little cahs they have left every month on TV subscriptions, shirts and tickets?

I agree with your second point - the problem is its much easier said that done. The Glazers don't know football, they know business - i.e: keep costs low to maximise profit, so you'll forgive me if I don't trust that they know the best way forward.

The Glazer way is not the right way, nor do I think the City/Chelsea way is massively healthy either - what I want is the middle line, up there year on year, profits made and money handed to the manager for the odd star signing - without the debt. Essentially what we had pre-Glazer.
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IMO The debts are not much of an issue anymore, there really isnt the kind of threat you are worried about because the business is very strong. Debt levels are also falling.

Yes the Glazers know feck all about football, thankfully they left all that to Fergie to deal with!

I mostly agree with your last paragraph, although even without debts we still had to pay dividends to shareholders, I wouldnt be suprised if we see dividend payments start again after the IPO and perhaps we will go back to how things were preGlazer.
 
From what I've read, Edwards was just as problematic at the Glazers. As ravelston pointed out recently, Edwards actually raised ticket prices by a larger % than the Glazers have on a per year basis.

If you're in the cheap seats, your ticket prices have gone up 36.4% (that's 4% per year) since the takeover; for the expensive seats that would be 72.4% (7% per year). For comparison, under the PLC the increases were 188.9% (7.9% per year) and 260.1% (9.6% per year) or, for the the last seven years under Edwards, 10.1% per year and 9.3% per year. So the rate of price increase has actually been lower since the takeover than over the twenty one years previously - those in East and West Lower have particularly benefited.
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The Glazers wanted to refinance the debt before and couldn't, and they came out of that without the disaster some expected, now that things look much better it's hard to believe they'll collapse from an inability to refinance their debt.

Of course they're not the best owners possible, like Edwards they like to take a cut of profits for themselves. It would be great for the fans if the owners didn't have debt the club has to pay off, and would put all profits back into the club, but how many clubs can say they have that envious situation?
 
ravelston said:
Historically, the plc funded all the phases of the stadium expansion with ticket price increases. Given where we were with the quadrants, I don't think that there can be any doubt that ticket prices would have gone up that first season. (The plc raised ticket prices significantly faster than the Glazers have, although the monetary amounts of the Glazer increases have been larger - they started from a higher base.) Then we got going with the massive increases in staff costs (from £436m over the seven years before the takeover to £870m for the seven years since - i.e. they've doubled) so I suspect that the ticket price increases might have continued - the revenue had to come from somewhere, although the new media contracts would have got close to covering the cost increases come the end of 2008 (which is when the Glazer increases slowed down).
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ravelston said:
My memory is that Arsenal's cheapest season tickets are more expensive than our most expensive tickets. I know our average price is lower than Liverpool's - and Spurs and Chelsea are also significantly higher. So I guess we've got the lowest prices of our peer group - for what that's worth.

[Edit: All right, I forgot City - still can't think of them as being in our peer group.]
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So basically, you don't know what happened and London clubs cost more. Thanks for clarifying that.
 
NEW YORK/LONDON (Reuters) - An unusual sight greeted guests at New York's posh St. Regis hotel on Monday: dozens of investors trickled out carrying red Manchester United hats and soccer balls after a marketing event for the British soccer club's upcoming initial public offering.

Soccer, as Americans call the kind of football played in Europe and elsewhere, is not a particularly popular sport in the United States. The U.S. chapter of Manchester United's official fan club has only 5,000 paid members and even the presence of David Beckham on the Los Angeles Galaxy roster has failed to ignite widespread U.S. fan interest.

But U.S. investors may turn out to be the ones who help the club and its owners, the Glazer family, raise up to $333 million in the offering.

A source close to the deal said on Tuesday the IPO, which is expected to price on Thursday evening, is already oversubscribed and two other sources said bankers on the last leg of a two-week global marketing effort are finding Americans particularly receptive to the IPO.

The unexpected American support for the IPO adds to the intrigue and controversy surrounding the Glazers' stewardship of the club and its second attempt to go public.

The Glazers, an American family with business interests ranging from shopping centers to the Tampa Bay Buccaneers football team, have been reviled by Manchester United fans since they took the club private in 2005 in a leveraged buyout.

Fans say the Glazers saddled the club with debt, hurting its ability to buy players and win matches. The team holds a record 19 English championships, but failed to win a trophy last season for the first time since 2005.

Some investors and experts also say the club's proposed valuation - $3.3 billion at the high end of the $16-to-$20 per share range - is hard to justify, especially given the volatile nature of its business.

Without other listed sports teams with which to compare Manchester United, the club's valuation has been a source of consternation for potential investors. That was one reason why Morgan Stanley dropped out of the underwriting syndicate after plans to list the club in Singapore were abandoned.

COMPARISON SHOPPING

Club officials and the banks involved in the IPO are trying to convince potential investors across the globe that Manchester United should be seen as a powerful global brand and not just a sports team with fickle fortunes that shift on the outcome of every match.

Jefferies Group Inc , the lead underwriter, is positioning the club as a high-growth consumer brand, comparing it to retailers like Michael Kors Holdings Ltd and Lululemon Athletica Inc , sources said.

JPMorgan Chase & Co and Credit Suisse Group AG are marketing it as an e-commerce company, comparing it to online giant Amazon.com Inc . Deutsche Bank AG sees it as a media company, comparing it to companies like Walt Disney Co , sources said.

"I think it is very interesting how they have been shopping this around the world, first in Asia, now the U.S. Why not list in London where people actually know something about the business?" said James Clunie, head of equities at Scottish Widows Investment Partnership, a British fund management house overseeing 142 billion pounds in assets.

"I suspect the reason is that they think they can get a higher price from foreign investors than they can in the UK. That makes me very cautious as an investor. They are trying to get the higher price instead of a fair price," Clunie said.

Manchester United officials declined to comment.

GETTING THE RIGHT VALUE

The comparisons are crucial to a valuation analysis. Manchester United will be valued at around 26 times its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the 12 months through June 30, if valued at the high end of its pricing range.

That compares with 49 times last 12 months EBITDA for Amazon, 29 times for Michael Kors and 19 times for Lululemon. Disney trades at around 10 times, Thomson Reuters data shows.

The banks are using Manchester United's earnings projections for 2014 in their valuation analysis, but that figure could not be ascertained.

JPMorgan, Credit Suisse and Deutsche Bank officials declined to comment. Officials with Jefferies could not be reached for comment.

Still, U.S. value investors who look at such multiples are largely staying away from the IPO, a source said. Instead, potential investors include hedge funds and mid-cap-focused funds betting on the club's growth prospects, a source said.

One fund manager who attended the marketing roadshow in New York said he sees the club as a media company, but "only better," because it engenders strong brand loyalty around the world. The club's push in emerging markets where it has plenty of room to grow is also attractive, he said.

"With Disney, you're not going to go see a movie or buy merchandise because you have any sense of loyalty to the company," he said. "But with Manchester United, you have a huge global base of fans."
http://ibnlive.in.com/generalnewsfe...ad-show-presentation-in-new-york/1037945.html
 
I've heard the talk I'll believe it when I see it though. I remember how sought after Facebook was...

...at first.

Lets see what happens when the dust has settled and the smoke has cleared.

Not everyone believes the hype e.g.The Manchester United IPO stinks.
 
CNBC ‏@CNBC
BREAKING: Manchester United prices IPO at $14/share, below expected range of $16-$20. (via @bshactman)
 
http://www.ifrasia.com/equities-Man...al-support-to-public-markets/21034599.article

Good piece
 
so that $14 valuation is not fixed and can/is likely to drop over the coming days? .......and would the club's valuation be adjusted accordingly?
 
Excal said:
$14/share would put the club's valuation at about £1.5B.
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Enterprise value is just over £1.8bn.

That CL group stage exit has cost us a few bob unfortunately and MUST, Green and the negative press hasn't helped either.

Still, with the club's excellent growth prospects over the next 3-5 years we can expect to see the share price rise impressively during that period.
 
GCHQ said:
Enterprise value is just over £1.8bn.

That CL group stage exit has cost us a few bob unfortunately and MUST, Green and the negative press hasn't helped either.

Still, with the club's excellent growth prospects over the next 3-5 years we can expect to see the share price rise impressively during that period.
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Not until we can start scoring goals.
 
will be a bit embarassing for the Glazers that the price ($14) is below the initially announced range ($16 to $20) - although I did think it was highly optimistic to be aiming for anything like a £2bn valuation considering the lack of voting rights, no dividend, weak markets etc. Will be interesting to see where the price goes from here.

A £1.5bn value is still a lot higher than most analysts would have expected and means the club has almost doubled in value since the initial takeover, which is quite amazing seeing as it is during the time of the biggest global recession in recent times.

I guess the main story is that the whole thing has actually gone ahead, there has been a lot of negative press and even rumours of the float being cancelled just 10 days ago! I remember the same with the bond issue where the press said it was going to be a failure and in the end that was oversubscribed - the doom mongers never learn.

The main negative is that half the proceeds is going to the owners rather than on repaying debt - although I always expected that anyway.
The biggest positive is obviously that debt levels will come down further, as will our annual interest bill which leaves more cash in the bank. Remains to be seen what is done with that cash though.
 
Did we sell the additional several million that were available or were those only to underwriters?
 
Very disappointing that:

1) the HK and Singapore attempts flopped, but no surprise there. Asian investors are not mugs, despite the way they are portrayed in western media

2) the amount of money they are attempting to raise is far less than they or anyone else would want (I.e. The full amount of the debt). There is clearly no where near the demand needed to maintain the inflated share price at a bigger scale.

3) it is not being used to pay down debt, though I imagine it is being used to reduced the undoubtedly refinanced PIK money
 
GCHQ seems to be acknowledging the $14 price so it must be true as he works for them and all.

I don't whether I am happy because I hate the Glazers or diasppointed encase the clubs is tragically tied to them.
 
A lot of the negative press has been a result of the fact that the whole IPO has been rather sneaky presented. Old accounts, lack of comment on financial matters recently, trying to whore the IPO to two stock markets before retreating to the US etc.
 
So a total of just 149M GBP? That does not leave much for the debt when the Glazers have their share..
 
KingMinger22 said:
Very disappointing that:

1) the HK and Singapore attempts flopped, but no surprise there. Asian investors are not mugs, despite the way they are portrayed in western media

2) the amount of money they are attempting to raise is far less than they or anyone else would want (I.e. The full amount of the debt). There is clearly no where near the demand needed to maintain the inflated share price at a bigger scale.

3) it is not being used to pay down debt, though I imagine it is being used to reduced the undoubtedly refinanced PIK money
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1) It wouldn't make sense, those markets are more prone to shocks.
2) No, The Glazer's probably don't feel they want to float more and probably don't need to.
3) Half of it is.
 
Man Utd lowers stock float value

Manchester United has been forced to cut the value of its imminent share flotation in New York.

The football club said it would sell shares at $14 each, below the $16-$20 range that it announced just weeks ago.

It is selling shares representing 10% of the club, which will raise $233m (£150m) to pay off some debt, below the $333m hoped for.

The lowering of the debut share price suggests that it could not find buyers at those higher prices.

The business has been controlled since 2005 by billionaire US sports investors the Glazer family, who paid £800m for the club, which this sale now values at double that.

They also own the Tampa Bay Buccaneers American football team.

The shares will begin trading in New York on Friday under the ticker name Man Utd.

The club currently has hundreds of millions of pounds of debt despite its sporting success.

Disappointment
Some supporters had hoped that the money raised by selling shares in the club would all go towards reducing the debt load.

A statement from the Manchester United Supporters Trust (MUST) criticised the money-raising plan: "We have made it clear that on the Glazers' terms, the share sale is a bad deal for fans, investors and the club.

"For the club, this is a bad deal because more than half of the funds raised will now be paid direct to the Glazer family, with a smaller portion being used to pay down some of their debt which they have saddled the club with since 2005."

Earlier this month, MUST called for a boycott of the club's sponsors in protest at the planned share issue.

It said this was intended to send "a loud and clear message to the Glazer family and club sponsors that, without the support and purchasing power of the fans, the global strength of the Manchester United brand doesn't actually exist".

The club, which has one of the largest fan bases of any Premier League team, was recently called the most valuable in sport and worth $2.23bn, according to Forbes magazine.

Sir Alex
Sir Alex Ferguson, the manager, recently denied speculation that he stands to benefit financially from the imminent share flotation, after reports that club employees would benefit from a share incentive scheme.

"There is not a single grain of truth in this allegation," he said in a statement.

The Premier League giant came second last season and has won a record 19 titles.
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http://www.bbc.co.uk/news/business-19201427

So even less cash for bond repayment. Congrats to MUST this epic victory...err.
 
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