ALL issues relating to the bond issue and club finances

[ciderman9000000]

The Glazer's bought an £800m asset with around £650m of debt. If a party that doesn't even have 25% of the cash required to buy the asset outright was able to, there'd be thousands of others who could. The fact that others didn't put forward a serious offer (lets be honest the Glazer's offer would be the last one the board would have accepted if given a choice) shows your point to be hollow. United at the time was a huge global brand with a big "BUY ME" sign attached to them. The only party with a serious offer was a seriously shit offer for the club.

Although random internet guy knows better than tons of investors who almost certainly looked at all the relevant information and decided it was far too risky.

And yet, I made that prediction long before the revised TV rights were announced. Of course though, I was wrong, because:

"The increases haven't been vast, as you state, they've been far, far greater than that."

The most ridiculous statement I've heard in a long time.

I was quite specific as to why the vast increases in commercial revenue would come; the increasing affordability of televisual technology for the common populace of the developing world being crucial to the fact.

Was it unforeseeable that such technology as satellite television and high-speed internet would reach the developing world at affordable prices? No, it was inevitable.

Have the Glazers primarily targeted the developing world in their commercial revenue drive since purchasing the club in 2005? Yes, such is undeniable.

Did they make a similar prediction five years prior to that of myself then? Of course they did, it's clear as day. They bought the club on the strength of such prediction; not without risk, but the risk was calculated, and that which you claim was unforeseeable, that which was in fact foresaw, paid off for them.

All this extra revenue is coming from India, Indonesia, Africa, Mexico, South America. The Glazers saw that the boom in revenue that bSkyb brought to football through the UK population could be magnified tenfold and emulated right across the globe as the developing world (countries with huge populations containing many tens of millions of United supporters) caught up with their developed counterparts in terms of affordable televisual technology. This certainly wasn't unforeseeable; I saw it in 2010 and the Glazers quite clearly saw it at least five year earlier.

Your point about there not being more investors willing to purchase the club, as well as being wholly unsubstantiated, is entirely irrelevant to the fact that the Glazer family quite clearly recognised the scope for commercial growth at a truly global level and set about targeting such growth from the beginning of the ownership.

And yet, here you are stubbornly refusing to admit that the Glazers saw any of it coming, that these huge increases in revenue have been nothing more than a convenient surprise for them.

Whatever your motivation for doing so, you're talking out of your arse.

 

[Gazza]

It was very high risk and everything that could have worked in their favour, worked in their favour.

As I've said: thank Christ Fergie didn't retire.

But not everything went in their favour, as Cider has pointed out. The global recession and the CL early exits are the biggest examples

Also, the cruz of the matter is you attributing these things going in their favour as Luck, rather than part of the plan. I get why you're doing that, but it's not really solid ground you're on, from what I can see.

 

[Redlambs]

From andersred's blog at the start:

sometimes even setting fans against each other.

That wasn't just the Glazers now was it? Someone else, some other group were peddling miss-information, childish fairytales and at times down right lies to help stir this up.

I'll refrain from suggesting why, I don't want to be Cider'd.

 

[ciderman9000000]

 

[Rood]

They've had some good luck but suffered plenty of bad as well.

They couldn't have anticipated the global financial crisis pushing up borrowing costs to the extent it did and making it difficult for them to refinance their initial acquisition debt.

Also they've been able to leave the really unpopular moves like Stadium naming rights and pushing for individual TV rights in reserve.

They've done pretty well for themselves to be fair and are now in a great position. We the fans have got nothing out of it though...and the matchgoers have had the worst of it.

I'd agree with that - trying to make out that the success of their business plan is all down to luck is pretty ridiculous really as there has been bad fortune as well as good.
Perhaps they couldn't have foreseen just how much TV revenues etc would increase but at the same time they never would have expected such huge wage inflation due to the sugardaddies and it all goes hand in hand.

Matchgoers have suffered (ACS in particular will always grate with me) but similar has happened at most clubs. Plus we have had a lot of success to celebrate so I don't think its right to say we got nothing out of it (I know some people will argue that is not down to them, but I don't entirely agree with that view). For me the main gripe will always be the amount of cash 'wasted' along the way and that really should be the main point of contention IMO.

 

[Cevno]

The takeover at City and other clubs around Europe leading to wage inflation further didn't exactly help either.

 

[finneh]

And yet, I made that prediction long before the revised TV rights were announced. Of course though, I was wrong, because:

"The increases haven't been vast, as you state, they've been far, far greater than that."

The most ridiculous statement I've heard in a long time.

I was quite specific as to why the vast increases in commercial revenue would come; the increasing affordability of televisual technology for the common populace of the developing world being crucial to the fact.

Was it unforeseeable that such technology as satellite television and high-speed internet would reach the developing world at affordable prices? No, it was inevitable.

Have the Glazers primarily targeted the developing world in their commercial revenue drive since purchasing the club in 2005? Yes, such is undeniable.

Did they make a similar prediction five years prior to that of myself then? Of course they did, it's clear as day. They bought the club on the strength of such prediction; not without risk, but the risk was calculated, and that which you claim was unforeseeable, that which was in fact foresaw, paid off for them.

All this extra revenue is coming from India, Indonesia, Africa, Mexico, South America. The Glazers saw that the boom in revenue that bSkyb brought to football through the UK population could be magnified tenfold and emulated right across the globe as the developing world (countries with huge populations containing many tens of millions of United supporters) caught up with their developed counterparts in terms of affordable televisual technology. This certainly wasn't unforeseeable; I saw it in 2010 and the Glazers quite clearly saw it at least five year earlier.

Your point about there not being more investors willing to purchase the club, as well as being wholly unsubstantiated, is entirely irrelevant to the fact that the Glazer family quite clearly recognised the scope for commercial growth at a truly global level and set about targeting such growth from the beginning of the ownership.

And yet, here you are stubbornly refusing to admit that the Glazers saw any of it coming, that these huge increases in revenue have been nothing more than a convenient surprise for them.

Whatever your motivation for doing so, you're talking out of your arse.

You made the prediction that any semi-intelligent person would make. Revenues increasing quickly was inevitable due to the factors you mentioned, I've said this several times. As I've stated though, there is a huge difference between a healthy, predicted growth and the boom that we've seen.

You can say that you and the Glazer's predicted it and that vague statements like you quoted prove this, but if anyone asked you to put a figure on it 6 years ago, yours would have been as wide of the mark as anyone elses, the Glazer's included. As I said if it was as easy to predict as you seemt o be asserting, there'd be a line of people who were fighting for ownership and made rich(er) as a result.

Let me reiterate again the point you seem to be ignoring: it was obvious that the Glazer's and everyone else saw scope for revenue increase, however the level of this increase has been unfathomable. Your quote could easily be an AC Milan fan 6 years ago, their turnover has been flat since then.

But not everything went in their favour, as Cider has pointed out. The global recession and the CL early exits are the biggest examples

Also, the cruz of the matter is you attributing these things going in their favour as Luck, rather than part of the plan. I get why you're doing that, but it's not really solid ground you're on, from what I can see.

I'd agree with that - trying to make out that the success of their business plan is all down to luck is pretty ridiculous really as there has been bad fortune as well as good.
Perhaps they couldn't have foreseen just how much TV revenues etc would increase but at the same time they never would have expected such huge wage inflation due to the sugardaddies and it all goes hand in hand.

Matchgoers have suffered (ACS in particular will always grate with me) but similar has happened at most clubs. Plus we have had a lot of success to celebrate so I don't think its right to say we got nothing out of it (I know some people will argue that is not down to them, but I don't entirely agree with that view). For me the main gripe will always be the amount of cash 'wasted' along the way and that really should be the main point of contention IMO.

I never attributed it 100% down to luck, obviously they saw a big scope for increase and gambled on it. In my view it was a gamble that paid off for the Glazer's and didn't pay off for Hicks/Gillett.

I also think the good fortune far, far outweighs the comparatively insignificant bad luck.

 

[ciderman9000000]

Let me reiterate again the point you seem to be ignoring: it was obvious that the Glazer's and everyone else saw scope for revenue increase, however the level of this increase has been unfathomable.

The level of increase certainly wasn't unfathomable. I haven't been surprised by it at all. I said three years ago that we'd make great leaps forward in regards to commercial revenue, that TV revenue would go through the roof, and that's exactly what's happened.

Perhaps you personally didn't see it coming, but don't pass you own ignorance onto everybody else. It's all here in black and white; I said that there'd be vast increases inTV revenue streams, detailed exactly why that would be the case, and now we're seeing vast increases in TV revenue streams as a result of the same factors I detailed.

It was predicted. You need to deal with that.

 

[ciderman9000000]

Finneh, can you give a valid reason as to why the emergence of more readily available and affordable satellite television in the developing world wasn't perfectly predictable?

Can you also explain why the Glazers have focused primarily upon exploiting such developments from the very beginning of their United ownership if they didn't in fact predict such an occurrence?

Why do you think Rupert Murdoch tried to buy United? He'd seen that his bSkyb boom in the UK was about to go global; he could attempt to buyout every satellite broadcasting company throughout the developing world, or, he could simply cut out the middle man and buy Manchester United.

Murdoch's takeover failed. The Glazers stepped in and took that opportunity.

This wasn't all accidental.

 

[ciderman9000000]

In regards to your assertion that no other investors but the Glazers were interested in buying United, consider this BBC news article from 2003:

http://news.bbc.co.uk/1/hi/business/3141968.stm

From the article:

Mr Glazer, owner of the Tampa Bay Buccaneers American football team, has been linked with persistent speculation of an effort to take over Manchester United.

The club, owner of one of the most well-known global sporting brands, is thought to be in the sights of a number of potential buyers.

There were rumours earlier this year that Mr Glazer was weighing up a bid for the club, possibly in conjuction with three other Man Utd shareholders - Irish horseracing tycoons John Magnier and JP McManus, and Dutch television entrepreneur John de Mol.

More recent takeover speculation has centred on an unidentified Russian billionaire and a Middle Eastern businessman, also unnamed.

It certainly sounds like there were others involved with potential takeovers at the time when Glazer upped his shareholding thus enabling the hostile takeover.

 

[finneh]

Finneh, can you give a valid reason as to why the boom brought on by more readily available and affordable satellite television in the developing world wasn't perfectly predictable?

Can you also explain why the Glazers have focused primarily upon exploiting such developments from the very beginning of their United ownership if they didn't in fact predict such an occurrence?

For a valid reason see the progression of TV rights in every other top league, except the Premier League. Steady, positive growth is a common theme... Nearly quadrupling revenue in under 10 years is not even close to a common theme. Could an American family that probably knew little about Soccer know that most Countries would show steady growth, whereas the Premier League would explode? I doubt it. Every other Country has had exactly the same opportunities that you describe, but it hasn't even close to worked out the same.

The Glazer's have tried to exploit every opportunity possible, I wouldn't say there is any "primarily" about it. They started with the easiest and least costly way first, increasing ticket prices until demand exactly met supply and have moved on since then. I still don't understand how it was so obvious that the levels of revenue could be increased exactly as they have, that it would be so easy to triple or quadruple £800m within 6-10 years and yet the only takers were a family of Americans who could scarcely afford it in the first place.

If you genuinely believe that there were many parties interested, but the board decided that the offer of a poxy amount of cash and 80% leveraged on the club, then I beg to differ. The only way that the board would have accepted such a high risk shitty offer would be if it was the only offer on the table. It was a £150m gamble on their part. If it went wrong it would only have cost them that amount, with a bit of luck and if a fair few things went their way they stood to make a killing, if they failed they'd "only" lose a proportionally tiny investment.

 

[Mr. MUJAC]

That's nonsense to me. There are gigantic differences between the risks that the Glazers took and those undertaken by successive Liverpool owners. Liverpool may have a very similar trophy haul to United, but that's where the current similarities end. United had the Stadium while Liverpool have a ramschackle rundown Anfield that needs to be completely rebuild. We have a winning team while Liverpool are way short in terms of youth delivery and first team squad. We have had success in the last 20 years while these new markets have been opening while Liverpool have been suffering. United are the only club that you could do what they did at in England. The only comparable clubs worldwide are Real and Barca. Anything else would be an insane risk.

Do you think Liverpool could possibly secure some of the sponsorships Untied have attained?

Spot on!

And you can go back to the commercial strategies of the 1950's and 1960's to see where the long term growth thinking first started.

In the 1970's and 1980's, while we were quietly building our infrastructure (at the cost of not gaining league titles) Liverpool were spending minimally on commercial activity but were buying players and paying top wages.

 

[ciderman9000000]

La Liga, Serie A and the Bundesliga have all seen big hikes in their broadcasting packages over the past twelve months.

 

[finneh]

La Liga, Serie A and the Bundesliga have all seen big hikes in their broadcasting packages over the past twelve months.

The new Premier League TV deal will be much more than double Serie A and more than triple the Bundesliga/La Liga/Ligue 1.

The highest revenue received from Bundesliga TV rights last year was around £20m, the lowest being £10m. To put this into context the bottom Premier League team will receive around triple the top Bundesliga team, triple the top Spanish teams, bar Real/Barcelona and roughly the same as the Italian champions (around 6 times more than the bottom German/Italian clubs and infinitely higher than the bottom Spanish ones).

As I said - every other Country is experiencing steady, promising growth. The Premier League is fortunately now on a different stratosphere. If the Glazer's happened to purchase AC Milan instead of United (they were a better team at the time, with a similar revenue and a similar worldwide following), lets just say that their turnover wouldn't have doubled in 6 years, which would have resulted in them being up excrement river.

 

[ciderman9000000]

The new Premier League TV deal will be much more than double Serie A and more than triple the Bundesliga/La Liga/Ligue 1.

The highest revenue received from Bundesliga TV rights last year was around £20m, the lowest being £10m. To put this into context the bottom Premier League team will receive around triple the top Bundesliga team, triple the top Spanish teams, bar Real/Barcelona and roughly the same as the Italian champions (around 6 times more than the bottom German/Italian clubs and infinitely higher than the bottom Spanish ones).

That's true of the Bundesliga TV rights, but then you haven't taken into account that they'll soon themselves be increasing revenue significantly:

Germany's professional soccer league, the Bundesliga, has announced a record deal for the rights to broadcast its games over the next four years. Pay-TV broadcaster Sky significantly increased the amount it will pay to continue airing live games, but German editorialists question on Wednesday whether the network is gambling too much.

http://www.spiegel.de/international...deutschland-broadcast-tv-rights-a-828301.html

Why compare next season's Premier League TV revenue with last season's Bundesliga revenue? They've negotiated a $3.2bn deal.

The same goes for Serie A who've just agreed a $3.47bn TV package covering the coming three seasons. Your figures are outdated.

You've conveniently decided to leave out Madrid and Barcelona from your La Liga calculations. They're part of La Liga too, you know? They do things differently in Spain, but nevertheless the big increases in TV revenue are occurring there, even if somewhat disproportionately.

Regardless, the Premier League naturally receives higher revenue than these other leagues (leagues which are themselves recently seeing massive hikes in TV revenue despite your assurances to the contrary), because the Premier League is the most marketable of any football league on Earth; that isn't mere hubris - the Premier League paves the way for the rest of the footballing world in terms of commercial development, always has done. The Glazers clearly recognised the power of the Manchester United brand and they've exploited it to maximum effect. To say that they've been lucky to do so is a joke.

Again, you're just talking through your arse.

Furthermore, if you think the growth stops here then you're mistaken. You're probably personally unable to forsee it, but the growth we're seeing now, that which the Glazers predicted ten years ago, is not set to stop anytime soon. Growth is being driven by increasingly affordable technology on a global scale; the African continent alone is perhaps fifteen years behind the developed world in this respect. The money the Glazers are making now will be small fry compared to what they'll fetch in a decade's time.

If you think these Russian and Middle Eastern billionaires are investing so heavily in football clubs just for a laugh then you're being incredibly naive. Sponsorship, boadcasting Rights; the clubs and their owners best placed to take advantage of the coming developments will dominate the market for the world's advertisement industry. What means other than sports advertisement allow your product to be regularly shown to upwards of a billion humans?

Check back here in a few years and tell me I couldn't possibly have made this prediction.

 

[LawCharltonBest]

I don't understand all this financial mumbo jumbo. Can somebody just put this all to me in Football Manager language...

Does all this mean we get more money for transfers and wages?

 

[fishfingers15]

Well, no.

 

[finneh]

That's true of the Bundesliga TV rights, but then you haven't taken into account that they'll soon themselves be increasing revenue significantly:

Why compare next season's Premier League TV revenue with last season's Bundesliga revenue? They've negotiated a $3.2bn deal.

The same goes for Serie A who've just agreed a $3.47bn TV package covering the coming three seasons. Your figures are outdated.

You've conveniently decided to leave out Madrid and Barcelona from your La Liga calculations. They're part of La Liga too, you know? They do things differently in Spain, but nevertheless the big increases in TV revenue are occurring there, even if somewhat disproportionately.

Regardless, the Premier League naturally receives higher revenue than these other leagues (leagues which are themselves recently seeing massive hikes in TV revenue despite your assurances to the contrary), because the Premier League is the most marketable of any football league on Earth. The Glazers clearly recognised the power of the Manchester United brand and they've exploited it to maximum effect. To say that they've been lucky to do so is a joke.

Again, you're just talking through your arse.

Furthermore, if you think the growth stops here then you're mistaken. You're probably personally unable to forsee it, but the growth we're seeing now, that which the Glazers predicted ten years ago, is not set to stop anytime soon. Growth is being driven by increasingly affordable technology on a global scale; the African continent alone is perhaps fifteen years behind the developed world in this respect. The money the Glazers are making now will be small fry compared to what they'll fetch in a decade's time.

Check back here in a few years and tell me I couldn't possibly have made this prediction.

Again - look at the figures. Every other Country is increasing at rate that most would have accepted, even if it is on the upper limits of prediction. The Premier League is on a different planet to any other Country, something which in isolation couldn't be predicted (not least because the clubs themselves have no real input into these dealings).

Of course the growth isn't going to stop here, only a idiot would say that revenue growth in this area would "stop", now or 10 years ago. It is however likely that the domestic deals are going to round off, a prediction that was also widely accepted and expected 7-8 years ago, only for most to be surprised. You might think that the domestic deal will double again in 2016, I personally don't. Care to actually put any sort of value to your predictions? As all your previous "predictions" prove is that you're not a total moron. Let me make a similarly enlightened prediction: transfer fees and wages will continue to rise significantly... The answer: no shit sherlock.

Either way the fact is neither of us know exactly what projections the Glazer's had for Manchester United. As I said they could have bought AC Milan on exactly the same basis as you are saying they bought United, only to have flat revenue for 6 years and be down shit creek. Likewise they could have bought Liverpool asserting that "as technology becomes more affordable and more and more households in developing countries, where Liverpool enjoys massive support, gain access to satellite television, mobile smart-phones, high-speed internet etc. the value of our advertising space will shoot up", again they'd have been fecked.

They picked exactly the right asset, at exactly the right time and with modest investment on the Football side of things stayed incredibly competitive thanks to the greatest manager ever who planned to retire a few years ago. Hell they even had a world record fee of £80m dropped into their banks half way through their tenure to help alleviate any financial worries and now have FFP regulations coming in to cement their position perpetually.

Either they were lucky because of the aforementioned, or they were lucky to fight off the hundreds of investors throwing their money at United as it was such an obviously concrete investment with little risk that would blatantly multiply a £150m investment by 15-20 over a 10 year period. Take your pick.

 

[ciderman9000000]

So you agree that the vast increases in commercial revenue were indeed foreseeable.

Good, we're making progress.

The fact is that the Glazers didn't buy Liverpool; I suppose you could call this lucky, though Liverpool FC has never achieved such commercial and on-field success as has Manchester United in modern times, so it was much more likely a case of good judgment rather than good luck that United, not Liverpool, are now the most profitable football club in the world. I've never heard that AC Milan might have been an option for them, but, whatever, I don't see how it's relevant either; they bought Manchester United.

In regard to further predictions; I predict that overseas TV revenue will catch up with domestic income sometime in the next five to ten years, and that as a consequence direct sponsorship revenues (hoardings, shirt etc.) will be triple what they are currently.

Ever wonder why Mister Potato pops up on your TV screen so frequently during the United game? It's because the Mamee corporation of Malaysia are using the club to increase its range of business throughout the entire South East Asian sub-continent. These companies aren't fecking around.

 

[MikeUpNorth]

The fact is the Glazer's were incredibly lucky. Absolutely everything that could have gone in their favour, did, and to such an extent that no-one could have predicted.

That's bollocks to be fair.

Very few people anticipated the global financial meltdown in 2008. What ensued was a huge credit crunch, so much so that the Glazers were not able to refinance the acquisition PIK debts as they had planned. If credit were still freely flowing, then they would have been able to refinance on much more favorable terms.

 

[Irwinwastheking]

Spot on!

And you can go back to the commercial strategies of the 1950's and 1960's to see where the long term growth thinking first started.

In the 1970's and 1980's, while we were quietly building our infrastructure (at the cost of not gaining league titles) Liverpool were spending minimally on commercial activity but were buying players and paying top wages.

In the aftermath of Liverpool's victory in the CL in 2005 when the squad came back to Anfield with the cup their Megastore was closed. Thousands and thousands of delirious scousers and the only ones to sell them anything was street hawkers. That would never have happened at United as the club would be aware enough to try to Capitolise on things like that!

 

[thegregster]

One thing the Glazers(and the rest of football to be fair) seem to be really lucky with is the TV deals. I am very surprised that Sky Sports hasnt had loads of cancellations since the recession started. Whats even more surprising is a country like Spain doesnt seem to have lost many customers either.

 

[Cold_Boy]

One thing the Glazers(and the rest of football to be fair) seem to be really lucky with is the TV deals. I am very surprised that Sky Sports hasnt had loads of cancellations since the recession started. Whats even more surprising is a country like Spain doesnt seem to have lost many customers either.

Along with food and stuff, entertainment is something people can't live without.

 

[MikeUpNorth]

Along with food and stuff, entertainment is something people can't live without.

Plus a TV subscription is amongst the cheapest forms of entertainment when compared with actually going out and doing stuff.

 

[LondonRed]

I don't understand all this financial mumbo jumbo. Can somebody just put this all to me in Football Manager language...

Does all this mean we get more money for transfers and wages?

In summary: by the end of the 2016 financial year, we will be debt free. Revenues of over £500m. We will clear £100m+ a year (AFTER tax). What happens with the cash is anyones guess: We could buy Ronaldo or we could pay dividends and buy Robbie Savage instead. If I were a betting man I would say £30m-£40m per year in dividends and the rest re-invested. Which would be a very satisfying outcome for owner and club I would suggest. Not too satisfying for the £50 a ticket matchday goers mind.

 

[Will Absolute]

The new Premier League TV deal will be much more than double Serie A and more than triple the Bundesliga/La Liga/Ligue 1.

The highest revenue received from Bundesliga TV rights last year was around £20m, the lowest being £10m. To put this into context the bottom Premier League team will receive around triple the top Bundesliga team, triple the top Spanish teams, bar Real/Barcelona and roughly the same as the Italian champions (around 6 times more than the bottom German/Italian clubs and infinitely higher than the bottom Spanish ones).

As I said - every other Country is experiencing steady, promising growth. The Premier League is fortunately now on a different stratosphere. If the Glazer's happened to purchase AC Milan instead of United (they were a better team at the time, with a similar revenue and a similar worldwide following), lets just say that their turnover wouldn't have doubled in 6 years, which would have resulted in them being up excrement river.

But they didn't happen to purchase United. It was always their target.

 

[ciderman9000000]

But they didn't happen to purchase United. It was always their target.

That was just pure luck though, as finneh points out:

Could an American family that probably knew little about Soccer know that most Countries would show steady growth, whereas the Premier League would explode? I doubt it.

They probably flipped a coin between United and AC Milan.

Americans, eh! What do they know about soccer?!

 

[Will Absolute]

My memory from that time is that the United buy wasn't a spur of the moment decision. It wasn't a case of the Glazers wanting to buy a football club and tossing a coin. They early identified United as the jewel in the crown of world football, and the eventual purchase was the consummation of a long held ambition.

Malcolm acquired his first stake in United in 2003, and gradually increased his holding, until he eventually bought Magnier and McManus's shares in 2005, and completed his takeover of the club.

 

[ciderman9000000]

My memory from that time is that the United buy wasn't a spur of the moment decision. It wasn't a case of the Glazers wanting to buy a football club and tossing a coin. They early identified United as the jewel in the crown of world football, and the eventual purchase was the consummation of a long held ambition.

Malcolm acquired his first stake in United in 2003, and gradually increased his holding, until he eventually bought Magnier and McManus's shares in 2005, and completed his takeover of the club.

Spot on.

 

[Redjazz]

I'd agree with that - trying to make out that the success of their business plan is all down to luck is pretty ridiculous really as there has been bad fortune as well as good.

They (the Glazers) have exercised good judgement- they choose the club best equiped to handle their business plan; and that decision wasn't arrived at through the process of "eeny, meeny, miny, moe". Crucially, they then surrounded themselves with good folk by retention (SAF, Gill) and recruitment (Arnold, Woodward). Getting the right people on board is critical and in that regard their decision-making was\is excellent.

I doubt they envisaged SAF giving 8+ yrs of service to them, and in that sense they have been fortunate. He has delivered success throughout the period and as acted to stymie fan dissent (justified or not).

Perhaps they couldn't have foreseen just how much TV revenues etc would increase but at the same time they never would have expected such huge wage inflation due to the sugardaddies and it all goes hand in hand.

We all seem to intuit that this must be the case. Perhaps some industry wide study will emerge confirming that the sugardaddies have made a bad problem worse but United's own experience is rather different.
United experienced greater wage inflation before Abramovich. From 1994 to 2003, wages went from 11.4m to 79.5m (a 700% increase equivalent to 24% pa). From 2003 to 2012, Salaries have doubled to 161.7m (at a rate of 8% pa). The club has managed the salary problem in part by choosing not to compete with the sugardaddies at the player remuneration level.

That's bollocks to be fair.

Very few people anticipated the global financial meltdown in 2008. What ensued was a huge credit crunch, so much so that the Glazers were not able to refinance the acquisition PIK debts as they had planned. If credit were still freely flowing, then they would have been able to refinance on much more favorable terms.

The first refinancing in late 2006 was much more critical than the second in 2010. The very expensive (interest at around 19% pa) Acquisition Preferred Piks needed to go and were eventually replaced by a combo of much cheaper bank loans and a less onerous Pik Loan (with a much smaller principal).
Yes, the credit crunch was a nuisance but it could have been a whole lot worse time wise.

 

[ravelston]

Either they were lucky because of the aforementioned, or they were lucky to fight off the hundreds of investors throwing their money at United as it was such an obviously concrete investment with little risk that would blatantly multiply a £150m investment by 15-20 over a 10 year period. Take your pick.

It's a small point, but the Glazers equity investment amounted to £520m - £270m in the initial transaction and a further £250m when they retired the PIKs.

It's also worth observing that your arguments about droves of rich investors queuing up to buy United are utterly specious. There were/are very few groups for which such a transaction would be attractive. If we rule out money-laundering (the oligarchs) and trophy purchases (middle eastern oil) you're left with entities for whom there are significant synergies in the deal. That primarily leads you to media groups and sports investors. You're unlikely to get a non-UK media group having interest (especially given Sky's influence in the PL) and when the Sky deal was nixed that took the media side out. Which leaves us with sports investors, very few of whom could have swung a deal of this magnitude. What the Glazers presumably saw was a major world brand that was hugely underdeveloped commercially and they happened to have the sports marketing background that could add significant value. They were right.

The major risk in the transaction came from their being unable to refinance a reasonable rates. Without the financial meltdown the risk would have been relatively small (no deal is without risk - that's why we put all the ridiculous risk factors in prospectuses). An early (and much cheaper) refinancing would have left the worst case scenario as not much different from that we were suffering under with the plc.

 

[Rood]

We all seem to intuit that this must be the case. Perhaps some industry wide study will emerge confirming that the sugardaddies have made a bad problem worse but United's own experience is rather different.
United experienced greater wage inflation before Abramovich. From 1994 to 2003, wages went from 11.4m to 79.5m (a 700% increase equivalent to 24% pa). From 2003 to 2012, Salaries have doubled to 161.7m (at a rate of 8% pa). The club has managed the salary problem in part by choosing not to compete with the sugardaddies at the player remuneration level.

Exactly - interesting to read from Mr Mujac in the FFP thread who suggests it has been that way for decades:
https://www.redcafe.net/f7/so-these-financial-fair-play-rules-then-329050/index15.html#post12995252

 

[ravelston]

Might be a good moment to remind ourselves about the history of player wages.

http://www.sportingintelligence.com...of-english-footballs-top-flight-wages-200101/

Since the start of the Prem the growth mirrors the growth in TV revenues pretty precisely.

 

[VII]

United experienced greater wage inflation before Abramovich. From 1994 to 2003, wages went from 11.4m to 79.5m (a 700% increase equivalent to 24% pa). From 2003 to 2012, Salaries have doubled to 161.7m (at a rate of 8% pa).

I think that's more down to the Bosman ruling than anything. Didn't Keano get his wages doubled because since he was able to leave for free, Bayern could offer him much more than if they had to pay his transfer fee too? McManaman, Sol Campbell, Owen all had their wages doubled or tripled running down their contracts.

 

[MPTutd]

The Daily Mail are claiming our new training kit sponsor will be Qatar Airways on an 8 year deal worth £100m.

Not sure on the validity of the story though. It says that we are losing Turkish Airlines as a sponsor and therefore need an new airline sponsor. It also says thatQatar are currently sponsoring everything before the 2022 WC, which is true.

Not sure on their source, but it might be them putting 2 and 2 together and arriving at Qatar Airways.

 

[Cevno]

http://www1.qatarairways.com/global/en/newsroom/archive/aboutus_news_04sep06_2.html

They have history and are also going to sponsor Barca , next season and PSG in some way so could be. Newspapers get this sort of thing right most of the time too.

But 100M for 8 years if true will be odd for both Airline and training kit sponsorship, as we bought out a similar value of deal anyway.

 

[Cevno]

http://www.dailymail.co.uk/sport/ot...d-FA-Cup-matches-Premier-League-coverage.html

Dunno, doesn't seem definite in that.

 

[KM]

According to the Daily Mail, it's only the training kit deal and the delay in announcing it is because they're also trying to make it an airline sponsorship.

Still doesn't make sense to buy out a 10m/yr deal for 3 years for a 12.5m/yr deal which is for 8 years.

 

[MPTutd]

Still doesn't make sense to buy out a 10m/yr deal for 3 years for a 12.5m/yr deal which is for 8 years.

Completely agree. I would be expecting at least a 15m a year deal in order to buy out the DHL deal.

 

[The Wizard]

According to the Daily Mail, it's only the training kit deal and the delay in announcing it is because they're also trying to make it an airline sponsorship.

Still doesn't make sense to buy out a 10m/yr deal for 3 years for a 12.5m/yr deal which is for 8 years.

Yep totally agree, no way those figures can be right, given our agressive nature in the sponsorship department in the past few years. £100M over 4 years would have sounded more believable for both deals combined.

Considering that there was probably some kind of financial penalty for ending the £10M p/y DHL deal early, and to be locked into an 8 year deal; a £2.5M increase p/y seems very low, and just plain wrong if it's combined with a 2nd sponship (Airline sponsor). I am sure our current DHL deal + Turkish Airlines deal combined are worth at least £12.5M p/y or more, and only likely to increase over that 8 year period.