ALL issues relating to the bond issue and club finances

[Rood]

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

Oh dear - calm down Paddy!

Did you miss the bit where I explained that we have enough transfer funds available to buy any player in the world?
Even those who are disagreeing with my analysis have said they think there is £20m to £40m available for transfers.

You sound suprised at the notion that the Glazers would take profits out of the club - did you think they were here for the love of the game?

and BTW you can feck right off with your 'how can you call yourself a Manchester United fan' bullshit.

 

[Crerand Legend]

Oh dear - calm down Paddy!

Did you miss the bit where I explained that we have enough transfer funds available to buy any player in the world?
Even those who are disagreeing with my analysis have said they think there is £20m to £40m available for transfers.

You sound suprised at the notion that the Glazers would take profits out of the club - did you think they were here for the love of the game?

and BTW you can feck right off with your 'how can you call yourself a Manchester United fan' bullshit.

Language there Timothy, Profit taking if the club was in a position to take profits would be fair enough but it aint. Manchester United are not your typical business even though the Glazers treat it as such and if they want to continue treating it as such the support will erode, they need to realise this. I have grave fears for the club if they do not sell. The 20m or 40m transfer funds is more debt loaded on the club while they take circa 100m back to Uncle Sam. Didnt mean to make you cross there.

 

[ciderman9000000]

Language there Timothy, Profit taking if the club was in a position to take profits would be fair enough but it aint. Manchester United are not your typical business even though the Glazers treat it as such and if they want to continue treating it as such the support will erode, they need to realise this. I have grave fears for the club if they do not sell. The 20m or 40m transfer funds is more debt loaded on the club while they take circa 100m back to Uncle Sam. Didnt mean to make you cross there.

I think anyone would lose their patience with you if you a) ignore everything they say, b) attempt to lord it over them and question their support of our club, and c) appear to be either very drunk or just quite thick.

 

[Commadus]

I think anyone would lose their patience with you if you a) ignore everything they say, b) attempt to lord it over them and question their support of our club, and c) appear to be either very drunk or just quite thick.

Coming from you that is a bit ironic.

 

[Commadus]

Language there Timothy, Profit taking if the club was in a position to take profits would be fair enough but it aint. Manchester United are not your typical business even though the Glazers treat it as such and if they want to continue treating it as such the support will erode, they need to realise this. I have grave fears for the club if they do not sell. The 20m or 40m transfer funds is more debt loaded on the club while they take circa 100m back to Uncle Sam. Didnt mean to make you cross there.

Dude

I understand the perspective you are coming from speaking from your heart. Glazers are just another bunch of Private Equity scoundrels adding nothing but debt and management fees etc... I don't like any PE operator as they have shown to add nothing to the underlying businesses they take over.

 

[KingMinger22]

Even those who are disagreeing with my analysis have said they think there is £20m to £40m available for transfers.

20 to 40 million doesn't get you any player in the world. The best are atleast 40 mil.


Our net transfer spending is less than £0 since the Glazer's took over. We spending an average of 30 million a year on new players. That would be a very resonable figure.

cnuting Glaazer's are getting away with absolute theft.

 

[Rood]

Language there Timothy, Profit taking if the club was in a position to take profits would be fair enough but it aint. Manchester United are not your typical business even though the Glazers treat it as such and if they want to continue treating it as such the support will erode, they need to realise this. I have grave fears for the club if they do not sell. The 20m or 40m transfer funds is more debt loaded on the club while they take circa 100m back to Uncle Sam. Didnt mean to make you cross there.

They are only allowed to take any profits if the club exceeds a certain level of earnings. It is not in their interest to leave the club short of necessary funds, you need to remember that the Glazers make more money if the club is successful so keeping the team competitive is a priority for them.

 

[Rood]

20 to 40 million doesn't get you any player in the world. The best are atleast 40 mil.


Our net transfer spending is less than £0 since the Glazer's took over. We spending an average of 30 million a year on new players. That would be a very resonable figure.

You dont have to pay the full transfer fee immediately - installment deals are the standard nowadays. You probably only have to pay about half the fee upfront so £30m buys you a £60m player.

Net spending is a meaningless stat - as mentioned, transfer fees are spread over several years so in fact the accounts do show exactly how much is spent on average on transfers per year. It is in the £25m to £30m range which you describe as reasonable so I guess that should satisfy you, right?

 

[Commadus]

They are only allowed to take any profits if the club exceeds a certain level of earnings. It is not in their interest to leave the club short of necessary funds, you need to remember that the Glazers make more money if the club is successful so keeping the team competitive is a priority for them.

I suggest you see what is happening with their NFL franchise.

Glazers on a loser at Tampa Bay Buccaneers | Sport | The Observer

Morris says to the suggestion that there are parallels between Old Trafford and the Glazers' stewardship of the Bucs, where this season they have underspent the NFL's $127m [around £85m] salary cap by a quarter.

 

[Commadus]

You dont have to pay the full transfer fee immediately - installment deals are the standard nowadays. You probably only have to pay about half the fee upfront so £30m buys you a £60m player.

Net spending is a meaningless stat - as mentioned, transfer fees are spread over several years so in fact the accounts do show exactly how much is spent on average on transfers per year. It is in the £25m to £30m range which you describe as reasonable so I guess that should satisfy you, right?

In what way is it meaningless?

 

[Rood]

I suggest you see what is happening with their NFL franchise.

Glazers on a loser at Tampa Bay Buccaneers | Sport | The Observer

Morris says to the suggestion that there are parallels between Old Trafford and the Glazers' stewardship of the Bucs, where this season they have underspent the NFL's $127m [around £85m] salary cap by a quarter.

I am no expert on the NFL which is why I rarely comment on the Bucs - however I have seen enough comments from our resident North American caftards to suggest that the sport is structured very differently and that trying to draw parallels with us is not really worthwhile - there was this thread recently for your interest:
https://www.redcafe.net/f6/common-sense-over-water-296068/index2.html
As usual it consists of fredthered going OTT about a variety of issues and then getting corrected by people who actually know what they are talking about.

In what way is it meaningless?

Well at the moment our net spend is particularly meaningless because it is massively skewed by an exceptional item.
But more generally, net spend is not really a good measure of how much is being invested into the squad - we have a very big squad and very big wage bill to go along with it. Net spend also ignores bosman signings, we could get Joe Cole for free this summer and it wouldnt change the net spend yet we are getting a top class player and probably have to shell out a signing on fee etc.

 

[Commadus]

I am no expert on the NFL which is why I rarely comment on the Bucs - however I have seen enough comments from our resident North American caftards to suggest that the sport is structured very differently and that trying to draw parallels with us is not really worthwhile - there was this thread recently for your interest:
https://www.redcafe.net/f6/common-sense-over-water-296068/index2.html
As usual it consists of fredthered going OTT about a variety of issues and then getting corrected by people who actually know what they are talking about.



Well at the moment our net spend is particularly meaningless because it is massively skewed by an exceptional item.
But more generally, net spend is not really a good measure of how much is being invested into the squad - we have a very big squad and very big wage bill to go along with it. Net spend also ignores bosman signings, we could get Joe Cole for free this summer and it wouldnt change the net spend yet we are getting a top class player and probably have to shell out a signing on fee etc.

Fred may shoot off at times but some facts are hard to ignore like the post of jveezy in that thread.

If we include Ronaldos sale our net spend has been circa £17m under the Glazers. If we take the sale out it has been £97m. Circa £20m net per season.

In the 5 seasons before our net spend is £103.45m Again circa £20m net per season -

I have not discounted the Glazers figures or used a baseline year to equate the spending.

The numbers look pretty similar but the point is this - should we take out Ronaldos fee from the analysis?

 

[Interval]

Fred may shoot off at times but some facts are hard to ignore like the post of jveezy in that thread.

If we include Ronaldos sale our net spend has been circa £17m under the Glazers. If we take the sale out it has been £97m. Circa £20m net per season.

In the 5 seasons before our net spend is £103.45m Again circa £20m net per season -

I have not discounted the Glazers figures or used a baseline year to equate the spending.

The numbers look pretty similar but the point is this - should we take out Ronaldos fee from the analysis?

Why would you do that?

 

[Interval]

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.

Erm.. Makes perfect sense. Long lived assets are the ones, if your business is growing, contribute to the maximum growth. If you can't invest in them due to lack of funds, you'd stand to lose out the opportunity cost. The growth provided by these assets is larger than the interest paid.

Also, players are NOT long lived assets. Its the players contracts which appear on the B/S

Are you in the finance field or just pretending to be?

 

[fredthered]

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???

That $120 million IS the Ronaldo money

 

[fredthered]

As Roodboy seems to base his whole argument on EBIDTA, then I'd like him to explain this



A common misconception is that EBITDA represents cash earnings. EBITDA is a good metric to evaluate profitability, but not cash flow. EBITDA also leaves out the cash required to fund working capital and the replacement of old equipment, which can be significant.

Consequently, EBITDA is often used as an accounting gimmick to dress up a company's earnings. When using this metric, it's key that investors also focus on other performance measures to make sure the company is not trying to hide something with EBITDA

Paying particular note to the highlighted sections.

 

[fredthered]

What Roodboy doenst tell you, is that EBIDTA is also not GAAP. (generally accepted accounting practise ).

Several sites have various definitions, but they all pretty much say the same thing..

examples

There are potential problems in using the EDITDA figure. The EBITDA leaves out of lot of expenses in the final figure, so it may not be a realistic view of a company’s profitability. It also does not measure the actual cash that is flowing into the company because of the figures that it leaves out.



EBITDA is, in effect, operating profit after adding back the specific non-cash items of depreciation and amortisation. There is a temptation to view EBITDA as a proxy for cash-flow. But this is a dangerous assumption to make. The crucial difference between the two is that cash-flow takes into account movements in working capital (stock, debtors and creditors) whereas EBITDA does not. Sharp adverse swings in working capital can reduce cash-flow and are a sign of poor financial control or corporate ill-health, but EBITDA would not detect these warning signs.


EBITDA tells an investor how much money a company would have made if it didn't have to pay interest expense on its debt, taxes, or take depreciation and amortization charges. EBITDA is intended to be an indicator of a company's financial performance, not free cash flow as many investor incorrectly assume,



In its brilliance, Wall Street regrettably forgot one part of the equation: common sense. Companies do have to pay interest, taxes, depreciation, and amortization. Treating these expenses like they don't exist is the same mentality of the five year old who believes no one can see them when their eyes are closed


The truth is, in virtually all cases, EBITDA is absolutely, entirely, and utterly useless. It is simply a way for companies that can't make money to dress-up their failures by reporting increased something to investors. When the traditional metric of profit couldn't be attained, they created a new one that made them appear successful

I think thats about as damning as you can get...

 

[fredthered]

and the most damning of all

However, EBITDA can also be deceptive when applied incorrectly, and is especially unsuitable for firms saddled with high debt loads or those subject to frequent upgrades of costly equipment. Furthermore, EBITDA can also be trumpeted by companies with poor earnings in an effort to "window-dress" their profitability

 

[Transfer United Till I Die]

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

He doesn't defend them. He's just giving information you don't want to hear because it doesn't suit your argument. Roodboy more than anyone has tried to show that whilst the glazers aren't wanted at united things aren't as bad as the doomsdayers would have you believe. There's more to this than black and White.

 

[Julian Denny]

As I said in the other thread we should have around £50m for new players. There is supposed to be £98m in cash of which £70m will be "loaned" to the Glazers to pay down part of the PIKs for which they are responsible - leaving a balance of say £170m. This leaves £28m over plus another £22m if we hit £100m EBITDA this year.

So the revolving credit facility need not be touched. I am somewhat wary of this facility anyway as it involves more debt, even at supposedly favourable interest rates and I have also read that UEFA want to bring in regulations prohibiting players being bought on debt. How that would work with a club like ours which is currently 60% in debt is another matter.

The Glazers realise that for their business plan to work, the team has to remain highly competitive with the best in Europe, never mind at home. It has to keep winning (their sentiment). My view is that the £50m must be spent - most probably on a world class midfielder and a striker. Despite Fergie's recent comments and inter alia, we cannot rely on the likes of Berbatov nor on say Hargreaves permanently overcoming his problems which is unlikely in my view. The "reliance" on the four oldies in the squad also needs to be addressed sooner rather than later perhaps. Actually that £50m might not go very far.

 

[Julian Denny]

He doesn't defend them. He's just giving information you don't want to hear because it doesn't suit your argument. Roodboy more than anyone has tried to show that whilst the glazers aren't wanted at united things aren't as bad as the doomsdayers would have you believe. There's more to this than black and White.

Yes but the case for the Glazer plan rests entirely on profitability continuing into the future as it has in the recent past. Anything that seriously dents that profitability and the whole thing can turn sour quite quickly. We are over leveraged and are likely to remain that way for the next five years or so even if the success we have seen in the last few years continues over that period .

 

[KingMinger22]

Roodboy is gettiung ridiculous now-

Are you really saying 'net spend is not important?'

What the feck other measure would anyone ever use to evaluate investment INTO the team. Selling to buy is not investing in improving the team!

Also, what is difficult to understand re: the bucs? It doesn't matter that the NFL doesn't operate like the Premier League: there is a monetary element to it and the bucs are clearly starved of investment. Their wage bill is the equaivalent of Burnley's!


Roodboy has gone from presenting a different angle to the Glazer debate to being blindly defending them with ridiculous logic. It's a pride thing now.

 

[Transfer United Till I Die]

Yes but the case for the Glazer plan rests entirely on profitability continuing into the future as it has in the recent past. Anything that seriously dents that profitability and the whole thing can turn sour quite quickly. We are over leveraged and are likely to remain that way for the next five years or so even if the success we have seen in the last few years continues over that period .

Yes, of course you are right. There are no certainties going forward. All we can do is assess how things would pan out in certain circumstances. I imagine that if things did start to go south the glazers would sell up as quick as possible.

I just don't like all the hatred clouding peoples judgements. The reason for protest seems to change all the time as each set of predicted circumstances fails to transpire.

 

[ciderman9000000]

Yes, of course you are right. There are no certainties going forward. All we can do is assess how things would pan out in certain circumstances. I imagine that if things did start to go south the glazers would sell up as quick as possible.

I just don't like all the hatred clouding peoples judgements. The reason for protest seems to change all the time as each set of predicted circumstances fails to transpire.

Bingo.

 

[UnitedRoadRed]

Yes, of course you are right. There are no certainties going forward. All we can do is assess how things would pan out in certain circumstances. I imagine that if things did start to go south the glazers would sell up as quick as possible.

I just don't like all the hatred clouding peoples judgements. The reason for protest seems to change all the time as each set of predicted circumstances fails to transpire.

The circumstances didn't transpire this time because of the bond issue committing us to over £800m of outlay over the next 7 years. That's over £114m average per year. Could have bought one or two reasonable players with that.

 

[Julian Denny]

Yes, of course you are right. There are no certainties going forward. All we can do is assess how things would pan out in certain circumstances. I imagine that if things did start to go south the glazers would sell up as quick as possible.

I just don't like all the hatred clouding peoples judgements. The reason for protest seems to change all the time as each set of predicted circumstances fails to transpire.

The hatred started right from the beginning with the hostile takeover financed by 67% debt. It's an historic thing which has come more to the fore since the emergence of the RKs. The test will be if fans are actually perpared to make sacrifices to force home their objective.

 

[Commadus]

As I said in the other thread we should have around £50m for new players. There is supposed to be £98m in cash of which £70m will be "loaned" to the Glazers to pay down part of the PIKs for which they are responsible - leaving a balance of say £170m. This leaves £28m over plus another £22m if we hit £100m EBITDA this year.

So the revolving credit facility need not be touched. I am somewhat wary of this facility anyway as it involves more debt, even at supposedly favourable interest rates and I have also read that UEFA want to bring in regulations prohibiting players being bought on debt. How that would work with a club like ours which is currently 60% in debt is another matter.

The Glazers realise that for their business plan to work, the team has to remain highly competitive with the best in Europe, never mind at home. It has to keep winning (their sentiment). My view is that the £50m must be spent - most probably on a world class midfielder and a striker. Despite Fergie's recent comments and inter alia, we cannot rely on the likes of Berbatov nor on say Hargreaves permanently overcoming his problems which is unlikely in my view. The "reliance" on the four oldies in the squad also needs to be addressed sooner rather than later perhaps. Actually that £50m might not go very far.

There are covenants attached to the credit facility.

My concern echoes yours - we should not have to raise more debt to purchase players.

 

[Commadus]

Yes, of course you are right. There are no certainties going forward. All we can do is assess how things would pan out in certain circumstances. I imagine that if things did start to go south the glazers would sell up as quick as possible.

I just don't like all the hatred clouding peoples judgements. The reason for protest seems to change all the time as each set of predicted circumstances fails to transpire.

I have posted on this before - I have major disagreement with highly leveraged buyouts which is the modus Operandi of Private Equity barons - just see the destruction they have caused to the businesses they have operated - look up Sam Zell and what he did to an institution like the Chicago Tribune.

https://www.redcafe.net/f6/all-issu...-cash-out-etc-280859/index32.html#post8067970

 

[Crerand Legend]

I think anyone would lose their patience with you if you a) ignore everything they say, b) attempt to lord it over them and question their support of our club, and c) appear to be either very drunk or just quite thick.

I always regard myself as winning an arguement when the person you having the arguement resorts to insults and losing their temper. I am more interested in Manchester United the football team than who ever owns them.I wasnt happy when they bought the club but accepted it anyway and hoped that they would prove not to be the people everyone predicted, I listened and swallowed what they said since 2005 and bought my season ticket at constantly inflated prices and their poxy ACS. The worm has turned my friend, you can butter it up whatever way you like, create a maze of figures and move debt here there and everywhere but the truth is the Glazers are glorified conmen and very crafty at it

 

[Crerand Legend]

He doesn't defend them. He's just giving information you don't want to hear because it doesn't suit your argument. Roodboy more than anyone has tried to show that whilst the glazers aren't wanted at united things aren't as bad as the doomsdayers would have you believe. There's more to this than black and White.

It is good to hear both sides of any argument and be objective, I have been and I now know more about the accounts of the Glazers than my own. To me a blind man could see that the Glazers financially are a disaster for the club and the fans and the situation will get worse

 

[ciderman9000000]

I always regard myself as winning an arguement when the person you having the arguement resorts to insults and losing their temper.

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

Quite.

 

[ludvik]

It is good to hear both sides of any argument and be objective, I have been and I now know more about the accounts of the Glazers than my own. To me a blind man could see that the Glazers financially are a disaster for the club and the fans and the situation will get worse

You are right.

 

[redwhiteblack]

I always regard myself as winning an arguement when the person you having the arguement resorts to insults and losing their temper. I am more interested in Manchester United the football team than who ever owns them.I wasnt happy when they bought the club but accepted it anyway and hoped that they would prove not to be the people everyone predicted, I listened and swallowed what they said since 2005 and bought my season ticket at constantly inflated prices and their poxy ACS. The worm has turned my friend, you can butter it up whatever way you like, create a maze of figures and move debt here there and everywhere but the truth is the Glazers are glorified conmen and very crafty at it

Here here. It's a fecking disgrace what they've done to our beautiful, successful football club.

Seeing SAF's last years spent scratching around with no transfer budget, when he should be able to buy who he wants no questions asked after what he's done for this club and English football, is bordering on degrading.

I hate the Glazers. Honestly, genuinely hate them.

 

[Rood]

As Roodboy seems to base his whole argument on EBIDTA, then I'd like him to explain this...

So I see you have been furiously googling away trying to find fault with what I have said - 'A' for effort but must try harder!

My whole argument is not just about EBITDA - my analysis goes way beyond that, if you actually understood my posts then you would have already realised that.
If you have any issues with my calculations then feel free to question it but dont waste my time with this crap.

Roodboy has gone from presenting a different angle to the Glazer debate to being blindly defending them with ridiculous logic.

Im starting to get very bored by you - you have already made yourself look a twat on more than 1 occasion in these threads so I suggest you wind your neck in

If you dont agree with my logic then challenge it.

 

[Rood]

He doesn't defend them. He's just giving information you don't want to hear because it doesn't suit your argument. Roodboy more than anyone has tried to show that whilst the glazers aren't wanted at united things aren't as bad as the doomsdayers would have you believe. There's more to this than black and White.

Thank you - I'm glad some people understand and can see through the propoganda.

 

[CnutOfAllCnuts]

United will be debt-ridden for the forseable future, by that I mean the next 10-20 years at least.

Glazer or no Glazer. New owners will not write of that debt.

What is important is that the debt, whatever the size of it, is managed well.

Otherwise, we'll go bankrupt - and going bankrupt is actually the only way I see us getting rid of our debt.

 

[RedCanuck]

Here here. It's a fecking disgrace what they've done to our beautiful, successful football club.

Seeing SAF's last years spent scratching around with no transfer budget, when he should be able to buy who he wants no questions asked after what he's done for this club and English football, is bordering on degrading.

I hate the Glazers. Honestly, genuinely hate them.

You do realize you are calling Sir Alex a liar dont you?

 

[RedCanuck]

United will be debt-ridden for the forseable future, by that I mean the next 10-20 years at least.

Glazer or no Glazer. New owners will not write of that debt.

What is important is that the debt, whatever the size of it, is managed well.

Otherwise, we'll go bankrupt - and going bankrupt is actually the only way I see us getting rid of our debt.

It would depend entirely on if any new owner were cash rich. The BSkyB bid was fully financed, and while that won't be renewed a similar bid could buy out the Glazers equity and the debt.

 

[Julian Denny]

United will be debt-ridden for the forseable future, by that I mean the next 10-20 years at least.

Probably about eight or nine years if profitabilty continues as it has done in recent times

Glazer or no Glazer. New owners will not write of that debt.

Around 44% of the debt (PIKs) will disappear if the Glazers do the same

What is important is that the debt, whatever the size of it, is managed well.

Debt has been managed (just about) but it has increased from £550m to the present £720m. We continue to be over-leveraged. It has cost the club so far around £400m over five years

Otherwise, we'll go bankrupt - and going bankrupt is actually the only way I see us getting rid of our debt

.
Heaven help us !

 

[fredthered]

So I see you have been furiously googling away trying to find fault with what I have said - 'A' for effort but must try harder!

My whole argument is not just about EBITDA - my analysis goes way beyond that, if you actually understood my posts then you would have already realised that.
If you have any issues with my calculations then feel free to question it but dont waste my time with this crap.

Your whole argument is based on your calculations relating to EBIDTA.

Every single post about the finances resorts to you going on about it.

The fact is its a worthless financial summary that exaggerates a companies profitability.

In short its no better than me going to my bank manager and saying

"here lend me £20k"

When he asks how I intend to pay it, I just reply

"well I earn more that £20k a year"

He then asks "before tax, and what other liabilities do you have"

"oh dont worry about them, they arent important, whats important is that I earn enough to cover your debt so dont worry about things like the tax man, other debts etc"

EBIDTA, as those comments show, is widely regarded as a tool to manipulate the figures to look better than they actually are...