ALL issues relating to the bond issue and club finances

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swooosh said:
:confused: Where did you get that from?
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Sorry, i didn't mean to quote you; pressed multi-quote by mistake i think.

What i meant by 'Get back to supporting United', was that LUHG should simply read LU. We should be United fans rather than part fan part protester. I've made reasons for believing that the protests are ill-founded, i'm guessing you know them by now, so that's how i feel; i don't think those who're anti-Glazer are less of a fan than i am, and i don't respect the opinion of anyone who believes that i'm less of a fan than they are simply because i don't agree with the protests; that insult is harmless to me, because i don't feel i have to prove my support to anyone, it's just there.

As RB said though, this is the wrong thread for this topic. This thread concerns the finances. My original point was that our finances have been unfairly depicted by MUST and the press, as roodboy has shown, and yet most prefer to continue to live in ignorance of this fact.
 
Commadus said:
So we have circa £90m EBITDA to pay for

1) Interest on the bonds
2) interest on the PIK
3) Player purchases
4) Repayment of the PIK

How much does the PIK stand at right now? circa £220m?

14.25% on £220m = £31.35m
Bonds attract interest at 8.75% going by JD so £43.75m

Total interest circa £75.1m or say around £70 - £75m as I don't have the exact figures at hand.

So we have about £15m - £20m for player purchases and repayment of PIK. Our net spend on players since the Glazers have been here has been £17m.

Yes we have a nice margin for the payment of interest but the only way I can see us pay off the PIK is by our transfer spend to suffer and that is what has happened.
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Excellent summary.
When you consider how much extra has come through the additional capacity plus the ticket price hikes plus the extra tv revenue, it's easy to understand the concerns that fans have.
 
ciderman9000000 said:
See my reply to swooosh above.
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Fair enough.

I can't and won't just stop hating the Glazers though.

I've done so since the day they came barging into the club against the will of the fans, and for every day since that I've watched them squeezing every penny they can out of the club and into their own pockets.

My feelings towards them will only receed the day they no longer have anything to do with the club, at which point I will happily put them out of my mind for the rest of my life.
 
Commadus said:
So we have circa £90m EBITDA to pay for

1) Interest on the bonds
2) interest on the PIK
3) Player purchases
4) Repayment of the PIK

How much does the PIK stand at right now? circa £220m?

14.25% on £220m = £31.35m
Bonds attract interest at 8.75% going by JD so £43.75m

Total interest circa £75.1m or say around £70 - £75m as I don't have the exact figures at hand.

So we have about £15m - £20m for player purchases and repayment of PIK. Our net spend on players since the Glazers have been here has been £17m.

Yes we have a nice margin for the payment of interest but the only way I can see us pay off the PIK is by our transfer spend to suffer and that is what has happened.
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Correct me if i'm wrong, but wasn't the £100m EBITDA actual cash profit that roodboy highlighted a figure obtained after the deduction of all interest payments?
 
ciderman9000000 said:
Correct me if i'm wrong, but wasn't the £100m EBITDA actual cash profit that roodboy highlighted a figure obtained after the deduction of all interest payments?
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No - Interest is the "I" in EBITDA.

Edit - actually, he did come up with a figure of £109m at one point, which did include interest, but that wasn't EBITDA, and was actually a bit arbitrary and random. I think it was his stab at an estimated cash flow...
 
roodboy said:
Since the D&A are 'non-cash expenses', I excluded them all from my calculation and therefore reached a cash level of £109m.
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Byt the way, Roodboy, isn't there a glaring inconsistency in what you're doing here?

Signing a player often costs money last time I checked - eg the £30m odd we've spent on Valencia, Smalling, Hernandez, Obertan.

given that transfer fees are clearly being capitalised, and then amortised, rather than showing up as an expense at the point of signing, this £30m is not in the P&L, right? And yet you still ignore the amortisation, so you never include outgoing transfer fees in your calculation.

I don't know if you're doing it entirely deliberately, entirely accidentally, or somewhere inbetween, but you are continually manipulating the figures in arbitrary ways which suit the argument that we're cash rich.
 
roodboy said:
So you are still in denial :wenger:
I think you are being a bit disingenuous here - I feel I have proven to you without a shadow of a doubt that our cash flow situation is a lot better than what you (and most others) previously assumed. You should acknowledge that at least.
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No you've given us YOUR opinion hence


roodboy said:
So that is why I prefer to use EBITDA and add any other exceptional earnings (i.e. the Ronaldo money) and then manually calculate the tax and interest deduction to get to what I believe is the real cash profit we made last year..
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I love that bit..

"to get what I BELIEVE IS THE REAL CASH PROFIT...

Just absolutely wonderful..
 
figures due out at the end of the month are expected to show that 70 million has gone from uniteds bank account to pay off some of the glazers PIK loans...

hummm can anybody remind me what happened to the ronaldo money???

BBC - David Bond's Blog: Key period in the battle for Man Utd
The period leading up until the end of May will go a long way to determining whether there is a battle for control of Manchester United this summer.

Although the Red Knights campaign has lost momentum since its high point in March, senior figures within the camp insist they have not given up the fight.

They are continuing to hold meetings with interested potential investors - including on the evening of 19 May. But they admit putting together a potential takeover offer for the club is being hindered by the complexity of pulling together such a large number of different, wealthy individuals all with their own opinions on how any bid should proceed.

The Glazer family's asking price of £1.5bn has also led the Red Knights to issue public statements insisting they will not overpay for the club.

At the same time, the Glazer family have launched their own PR offensive - extraordinary in itself - quietly briefing journalists that the club can cope with meeting repayment charges on their £700m debts. They are also pointing out how successful their global marketing and sponsorship strategy has been in increasing the club's turnover.

Manchester United fans want the Glazer family to leave the club
Manchester United want to see the back of the Glazer family at Old Trafford

Two things could turn the advantage back to the Red Knights. On Friday, 28 May, United will publish their latest quarterly results.

It is widely anticipated these figures will show United's £122m cash reserves (according to the most recent report from United covering the period from October to December 2009) being reduced to help pay off around £70m of the Glazer's PIK loans - the interest rate for which will increase to 16.25% in August.

If that happens, then that will raise fears among supporters - and United manager Sir Alex Ferguson has already been dampening expectations here - that there will be no money to strengthen a team which only won the Carling Cup last season.
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EZee said:
figures due out at the end of the month are expected to show that 70 million has gone from uniteds bank account to pay off some of the glazers PIK loans...

hummm can anybody remind me what happened to the ronaldo money???
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Its a good thing that we're paying off the PIKs. We have a revolving credit of 75 million to buy players
 
EZee said:
figures due out at the end of the month are expected to show that 70 million has gone from uniteds bank account to pay off some of the glazers PIK loans...

hummm can anybody remind me what happened to the ronaldo money???

BBC - David Bond's Blog: Key period in the battle for Man Utd
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Isn't that the core of the problem. Money earned by the club, paid by you and me going to pay off the ridiculous loans they took out to give them the privilege of running the greatest football club on this planet.
 
Crumpsall Red said:
Before the Glazers we didn't need credit to buy players.
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I agree. That part really ridiculous and the primary reason we need owners who'd pay off the PIKs without dipping into our profits.

That said, the Glazers are here and its a reality. In that scenario, I'd rather they pay off 16% loans and take on 8% loans to buy players. Better for us.
 
A1Dan said:
I think "skint" is relative. No, we are not about to go to the wall, but neither do we have anything like the sort of spending power that a club with our revenue should do by rights.
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Well the problem is that many people seriously think we are literally 'skint' - just look at some of the clueless comments in threads about our transfers. It's ridiculous.

I have never disagreed with the idea that our club could be better run -but as I keep saying, in this thread I am just focusing on analysing our current financial situation to try and dispell some of the myths.


A1Dan said:
Byt the way, Roodboy, isn't there a glaring inconsistency in what you're doing here?

Signing a player often costs money last time I checked - eg the £30m odd we've spent on Valencia, Smalling, Hernandez, Obertan.

given that transfer fees are clearly being capitalised, and then amortised, rather than showing up as an expense at the point of signing, this £30m is not in the P&L, right? And yet you still ignore the amortisation, so you never include outgoing transfer fees in your calculation.

I don't know if you're doing it entirely deliberately, entirely accidentally, or somewhere inbetween, but you are continually manipulating the figures in arbitrary ways which suit the argument that we're cash rich.
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Why did you only quote half my analysis and stop at £109m :confused:
This is what I actually said and finished with a final cash estimate of £100m (for clarity this number is cash left in the bank after paying £45m senior debt interest but doesnt take into account the PIK) ...
Since the D&A are 'non-cash expenses', I excluded them all from my calculation and therefore reached a cash level of £109m. It was then pointed out that due to previous years losses, we wouldnt need to pay any tax so we can also ignore the £22m and reach a final cash balance of £130m.
Now I will agree that this is probably above the true cash figure as there are a few things that need to be taken off, most notably last years transfer expenditure (unfortunately we dont know how much exactly was paid upfront for Valencia or what installments are still due on Berba etc), and my actual conservative estimate of cash profit for 2009 is around £100m...
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You will see that I cover the issue of player payments at the end - after reaching an excess cash level of £130m, I have taken off a very conservative £30m for transfer spend (which would pay for the whole Valencia transfer and still includes more for installments on other players and anything else I might have missed).
Note: all the analysis is for the year to 30Sep2009 - so Obertan, Smalling etc do not apply, they will be in next year's numbers.

I realise now that you probably havent completely understood what I have tried to explain - to be fair there are a lot of different factors that need to be taken into account before you get the big picture of what is going on.
Anyway I'm glad I have got you thinking about all this - feel free to keep trying to find holes in my analysis. There may well be some minor factors that I have missed, but I'm confident that my essential conclusions will remain intact and sooner or later you will realise that I was right all along.
 
Commadus said:
So we have circa £90m EBITDA to pay for

1) Interest on the bonds
2) interest on the PIK
3) Player purchases
4) Repayment of the PIK

How much does the PIK stand at right now? circa £220m?

14.25% on £220m = £31.35m
Bonds attract interest at 8.75% going by JD so £43.75m

Total interest circa £75.1m or say around £70 - £75m as I don't have the exact figures at hand.

So we have about £15m - £20m for player purchases and repayment of PIK. Our net spend on players since the Glazers have been here has been £17m.

Yes we have a nice margin for the payment of interest but the only way I can see us pay off the PIK is by our transfer spend to suffer and that is what has happened.
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My analysis has gone far beyond this already, EBITDA was just the starting point for my more detailed calculations about free cash flow from last year.
But I suppose you are here trying to work out how things look going forward assuming no earnings growth (I actually think it is likely that EBITDA will grow) - which is a worthwhile exercise.

Your first mistake is that at least £70m is going to be repaid on the PIK. In fact it may well have already happened - the next set of quarterlys are due soon and should give us a clearer picture of where we stand.
So £150m x 14.25% is more like £21m, plus the £45m for bond interest = £66m Total Interest Bill.

So even off your numbers, it is more like £20m to £25m for transfers - which funnily enough is right around the £25m pa what the Glazers promised to make available for players each year.
Dont forget that this doesnt even include the fact that we have a low interest (4.5%) revolving credit facility of £75m available (and currently unused) to cover any time where Fergie wants to splash out even more on players.
 
fredthered said:
No you've given us YOUR opinion hence

I love that bit..

"to get what I BELIEVE IS THE REAL CASH PROFIT...

Just absolutely wonderful..
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Is that all you have got Fred? :lol:

At least the other guys had a proper go at challenging the numbers - not sure why I even waste my time replying to you!
 
Crumpsall Red said:
Isn't that the core of the problem. Money earned by the club, paid by you and me going to pay off the ridiculous loans they took out to give them the privilege of running the greatest football club on this planet.
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No doubt that is more than an annoyance to all United fans. It's a shame the fully funded BSkyB bid was opposed by some fans, and of course a travesty that the government of the day blocked the BSkyB takeover.
 
roodboy said:
Dont forget that this doesnt even include the fact that we have a low interest (4.5%) revolving credit facility of £75m available (and currently unused) to cover any time where Fergie wants to splash out even more on players.
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I still don't know why you wouldn't draw on this to hammer some more PIKS, effectively swapping 14.25/16.25 interest for the lower rate. I've also got the feeling that the PIKS can only be adjusted on their anniversary.
 
peterstorey said:
I still don't know why you wouldn't draw on this to hammer some more PIKS, effectively swapping 14.25/16.25 interest for the lower rate. I've also got the feeling that the PIKS can only be adjusted on their anniversary.
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I dont know if they are allowed to do it - as far as I understand the credit facility is supposed to be for working capital and transfers only.
But if there is any other spare cash then I suppose they will use that to pay off more PIK and start drawing on the credit facility.
 
roodboy said:
I dont know if they are allowed to do it - as far as I understand the credit facility is supposed to be for working capital and transfers only.
But if there is any other spare cash then I suppose they will use that to pay off more PIK and start drawing on the credit facility.
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isnt it because the pik's are in the galzers name (or red holdings or whatever its calked) and not the clubs...

isnt that the same reason the bonds had to be used to pay off lower rate interest rathert than the pik's

isnt there millions in consultancy fees to be paid to the glazers for the admin of the bond issue as well in this set of accounts due at the end of the month...
 
EZee said:
isnt it because the pik's are in the galzers name (or red holdings or whatever its calked) and not the clubs...

isnt that the same reason the bonds had to be used to pay off lower rate interest rathert than the pik's

isnt there millions in consultancy fees to be paid to the glazers for the admin of the bond issue as well in this set of accounts due at the end of the month...
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Yes the PIKs are in the Glazers name and technically not the club's resposibility but it was made clear in the bond prospectus that they would now use £70m of excess cash from the club to pay some of it off.
This would have the effect of bringing our over all debt level down from £720m to £650m (plus revolving credit facility).
 
roodboy said:
Yes the PIKs are in the Glazers name and technically not the club's resposibility but it was made clear in the bond prospectus that they would now use £70m of excess cash from the club to pay some of it off.
This would have the effect of bringing our over all debt level down from £720m to £650m (plus revolving credit facility).
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But it will not come down much if we buy this summer, ie we are not getting rid of debt just moving it about, only the new debt will be saddled on the club not the American leeches
 
Commadus said:
So it has not actually happened as yet so no mistake there I am only going off fact not conjecture. There is no official confirmation that the £70m of PIK has been repaid.

So you think it is wise to use a short term rolling credit facility to purchase long lived assets like footballers. Smart move.
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Yes but you were doing an assesment of our debt obligations going forward so you have to take it into account as it has already been made clear that it is going to happen.

If you want to use facts then you need to look at my analysis based on the 2009 financials - rather than EBITDA of £90m, you actually had £170m to play with (because EBITDA doesnt include profit made on players so the £80m from Ronaldo is on top of EBITDA!) so way more available for transfers and paying down PIK than your calculation.

You yourself were suprised at the low interest rate on the credit facility - it is clearly makes sense to use excess cash to pay off the PIK @ 14.25% and use a 4.5% facility instead.
I'd definitely call that a 'smart move'.

Keep trying ;)
 
Commadus said:
So it has not actually happened as yet so no mistake there I am only going off fact not conjecture. There is no official confirmation that the £70m of PIK has been repaid.

So you think it is wise to use a short term rolling credit facility to purchase long lived assets like footballers. Smart move.
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Long lived assets? What's that?
 
roodboy said:
Yes but you were doing an assesment of our debt obligations going forward so you have to take it into account as it has already been made clear that it is going to happen.
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I assessed where we were at the current time. I have not made any forward projections.

No need for me to keep trying as you have just confused yourself - which is it?

roodboy said:
I dont know if they are allowed to do it - as far as I understand the credit facility is supposed to be for working capital and transfers only.
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roodboy said:
You yourself were suprised at the low interest rate on the credit facility - it is clearly makes sense to use excess cash to pay off the PIK @ 14.25% and use a 4.5% facility instead.
I'd definitely call that a 'smart move'.
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All I am after is trying to get a better picture of what is going on and it seems all you are after is trying to fight your corner. I don't need to try to prove any figure are wrong.
 
Crerand Legend said:
But it will not come down much if we buy this summer, ie we are not getting rid of debt just moving it about, only the new debt will be saddled on the club not the American leeches
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If we buy big then it wont come down that much but either way our total interest bill will start to come down as high interest debt is replaced by low interest debt. The important thing to remember is that the debt pile has stopped growing which was the main risk previously.

You are correct about moving the debt around - basically we have so much excess cash that the Glazers are now starting to take profits out of the club.
 
Commadus said:
I assessed where we were at the current time. I have not made any forward projections.

No need for me to keep trying as you have just confused yourself - which is it?
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No confusion on my side - the credit facility is designated for working capital and transfers but there is now nothing to stop from using the excess cash that the club generates to pay off the PIK and then use the credit facility for wc and transfers.
 
roodboy said:
No confusion on my side - the credit facility is designated for working capital and transfers but there is now nothing to stop from using the excess cash that the club generates to pay off the PIK and then use the credit facility for wc and transfers.
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I don't have access to United balance sheet but there must be some restriction as to when they can pay off the PIK because if not they would have paid some proportion off by now. Doesnt United have circa £130m cash?
 
Commadus said:
I don't have access to United balance sheet but there must be some restriction as to when they can pay off the PIK because if not they would have paid some proportion off by now. Doesnt United have circa £130m cash?
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had 120 in the last reports... its expected that 70 million of that has been used to pay off the glazers pik's...
you know that article above that says that... and states that the full accounts are published at the end of the month... hth
 
roodboy said:
If we buy big then it wont come down that much but either way our total interest bill will start to come down as high interest debt is replaced by low interest debt. The important thing to remember is that the debt pile has stopped growing which was the main risk previously.

You are correct about moving the debt around - basically we have so much excess cash that the Glazers are now starting to take profits out of the club.
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Taking profits out of the club while the club cant compete for the top talent, excellent owners the Glazers. How you can defend such greedy thick skinned leeches and call yourself a Manchester United fan is beyond me, what you have said there about them profit taking while the club declines makes me sick
 
EZee said:
had 120 in the last reports... its expected that 70 million of that has been used to pay off the glazers pik's...
you know that article above that says that... and states that the full accounts are published at the end of the month... hth
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Ta

FT Alphaville Results day

This ties in well with the link I posted a bit back regards where the real money will be made by Glazers before any sale in consultancy and management fees.

Manchester United owners take £23m out of club - Telegraph

Now does that £122m cash include the £37m AON paid up front for the shirt sponsorship deal?
 
Crerand Legend said:
Taking profits out of the club while the club cant compete for the top talent, excellent owners the Glazers. How you can defend such greedy thick skinned leeches and call yourself a Manchester United fan is beyond me, what you have said there about them profit taking while the club declines makes me sick
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Football has been professional (as opposed to amateur) for a long time and went commercial about 16 years ago.

United have always been run commercially since the days of Martin and Louis Edwards.

Thats why we have a global fanbase.
 
PDA1234 said:
Football has been professional (as opposed to amateur) for a long time and went commercial about 16 years ago.

United have always been run commercially since the days of Martin and Louis Edwards.

Thats why we have a global fanbase.
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But we have never been 700 odd million in debt and unable to compete in the transfer market before that is the difference
 
Crerand Legend said:
But we have never been 700 odd million in debt and unable to compete in the transfer market before that is the difference
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Yes and I didn't like hedge fund involvement in the takeover in 2005.

In my opinion I'd rather develop young talent and buy wisely and pay off the hedge funds as soon as possible.
 
PDA1234 said:
Yes and I didn't like hedge fund involvement in the takeover in 2005.

In my opinion I'd rather develop young talent and buy wisely and pay off the hedge funds as soon as possible.
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I agree with the young talent bit, paying the Glazer debt I dont. Where would the club not be if they had continued to bleed the Bucc's without coming over here to do likewise
 
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