ALL issues relating to the bond issue and club finances

Status
Not open for further replies.
peterstorey said:
Well you might argue that... and if even you were successful you'd still end up saying that Glazer paid M&M for their notional 10-year excess profit in 2005 and Red Football are now busy putting it back in their trousers.
Click to expand...

In a way yes, because its simply a paper transaction.

Whilst no physical cash is paid out, it has to be done to balance the books.

If they paid M+M £380 million for 10 years worth of excess profit, but only managed to achieve £200 million then they clearly have lost £140 million.

If you ignore it, and put amortization back in, then in effect you are saying they never had it, and the £200 million that you achieved was all profit. WHen in fact it wasnt.
 
peterstorey said:
Well you might argue that... and if even you were successful you'd still end up saying that Glazer paid M&M for their notional 10-year excess profit in 2005 and Red Football are now busy putting it back in their trousers.
Click to expand...

I think they are more than putting it back in their pockets.

By the way, I wasnt implying that you didnt know what you were talking about. Its just we are coming at it from different perspectives.

Goodwill can be a multitude of things, but in order to answer the question I tried to make it understandable in relation to tangible assets.

When I've been involved in hotel takeovers, the simplest way to describe goodwill was simply the potential the business had to make money. Obviously with something like United its far more complex because you have intellectual rights, copyright, brand names, and so many other things which make up the clubs value.

As for the Glazers putting it back in their pockets, thats hard to deny. They now have a company valued at approximately 1.2 billion having only paid £720 to get it. Whatever you may say about them, they've certneainly pulled a fast one, and OK the methods are definitely not what you would call ethical, and the risks potenially massive. If they get away with it, it will be the be the biggest daylight robbery since Ronnie Biggs.
 
fredthered said:
Goodwill can be a multitude of things, but in order to answer the question I tried to make it understandable in relation to tangible assets.

When I've been involved in hotel takeovers, the simplest way to describe goodwill was simply the potential the business had to make money. Obviously with something like United its far more complex because you have intellectual rights, copyright, brand names, and so many other things which make up the clubs value.
If they get away with it, it will be the be the biggest daylight robbery since Ronnie Biggs.
Click to expand...
Yeah it occurred to me further up the thread that goodwill in terms of a football club also included the squad value which will be on the balance sheet as an intangible with limited value but has a big market value.
I think it's a disgrace that they can get away with a scam that is funded by the British taxpayer - interest relief on loans was supposed to be help for businesses to invest in plant and machinery NOT do leveraged cunto buy-outs.
 
peterstorey said:
Yeah it occurred to me further up the thread that goodwill in terms of a football club also included the squad value which will be on the balance sheet as an intangible with limited value but has a big market value.
I think it's a disgrace that they can get away with a scam that is funded by the British taxpayer - interest relief on loans was supposed to be help for businesses to invest in plant and machinery NOT do leveraged cunto buy-outs.
Click to expand...

I do confess to not understanding the players contracts and market values.

In the case of Ronaldo his new deal that he signed obviously shoved a huge amount onto his market value, but how does get shown on the balance sheet..

I know his contract becomes an asset to United, but how is that calculated exactly
 
peterstorey said:
I think it's a disgrace that they can get away with a scam that is funded by the British taxpayer - interest relief on loans was supposed to be help for businesses to invest in plant and machinery NOT do leveraged cunto buy-outs.
Click to expand...

This is the bit that tends to make me wary of the "its a tax scam" notion,

Yes the loophole was there in the first instance, but given this has been Glazers plan for some while ( if rumours are to be believed ) then would he have known about it, and how to exploit it to his advantage so ruthlessly.

I would envisage that at some point he must have been well advised by a very clued up accountant, and that this is certainly not something he thought of himself.

Given that hes american, and the rules are very different over there, surely he couldnt have thought this one up himself.
 
fredthered said:
I think they are more than putting it back in their pockets.

By the way, I wasnt implying that you didnt know what you were talking about. Its just we are coming at it from different perspectives.

Goodwill can be a multitude of things, but in order to answer the question I tried to make it understandable in relation to tangible assets.

When I've been involved in hotel takeovers, the simplest way to describe goodwill was simply the potential the business had to make money. Obviously with something like United its far more complex because you have intellectual rights, copyright, brand names, and so many other things which make up the clubs value.

As for the Glazers putting it back in their pockets, thats hard to deny. They now have a company valued at approximately 1.2 billion having only paid £720 to get it. Whatever you may say about them, they've certneainly pulled a fast one, and OK the methods are definitely not what you would call ethical, and the risks potenially massive. If they get away with it, it will be the be the biggest daylight robbery since Ronnie Biggs.
Click to expand...

They have effectively paid about 1 billion if you consider the debt increases
 
Listen Fred!

I don't know one single proper United-fan who don't support the G&G. I'm sick and tired of the way the owner milking my club. I feel sick of it and it's a disgrace they can do it inside the law.

But. And here is the reason why we argue all the time and you disrespect many posters who argue against you.

I don't hate the Glazers. You hate them. I dislike them. I can see the good and the bad without going overbord. Sooner or later the Glazer's will sell the club. I hope sooner. If a new owner can get rid of the PIKs we are in excellent shape. At the moment the club are OK, we do profit, but not more then that.
 
afrocentricity said:
You're all insane... going around in circles!

EBITDA or no EBITDA it looks like we aren't going to go tits up Leeds style. Whether or not we he have money for the squad is another story. I tend to believe SAF when he says the squad is good enough bar 1 or 2 signings, and I believe Gill (shock horror) when he says the money is there for that.

All I want is for the Glazers to stop rinsing the fans, clear off the debt and let the gaffer manage...
Click to expand...

I vote for this guy :)
 
fredthered said:
Right, you can start by telling me why you would discount amortization of goodwill from the cashflow.
Click to expand...

At least you are now asking the right questions - I guess I should count that as some form of progress!

Goodwill represents part of the price the Glazers paid for the club back in 2005 - therefore it was paid for 5 years ago and has nothing to do with the cashflow of 2009. If you include it then you are effectively charging twice for the original acqusition.
Yet it appears in the accounts as a cost of £35m every year.

To save you googling for further info:
Why Amortization of Goodwill is not a real Expense
 
A message from GCHQ in the newbies who tends to be better at explaining these things than me:

I certainly wouldn't rule that out. It's all guesswork to a large extent because we really don't know much about the finer details of the PIK loan. We didn't know about the Net Debt/EBITDA convenant until it was revealed in last year's accounts that the interest rate on the PIK loan was rising to 16.25%. And by the way you only have to look at the use of EBITDA in that convenant to appreciate that it is a very significant and relevant financial measure. Fred take note. ;)

It is of course true that EBITDA does not measure cashflow as it doesn't take into account movements and changes in working capital. However the basic rule is that if a company is continually increasing revenue and profitability (like United) then EBITDA will if anything be lower than the actual net cash inflow generated from its operations whereas if a company is struggling then EBITDA is likely to be higher than the actual cash generation.

If you look back at United's/Red Football's accounts since the Glazers takeover you'll notice that in every year the net cash generated from operations has been higher than the EBITDA (usually by about £10m). So far from giving an over-inflated picture of the club's profitability and cashflow generated like Fred claims, the use of EBITDA in the case of United is actually not reflecting the fact that the amount of cash generated from its operations has in fact always been higher than EBITDA!

God knows what point he is trying to make about goodwill amortisation. :lol: As you pointed out you clearly can't count the cost of purchased goodwill as a cash outflow twice.

Regards,

GCHQ
Click to expand...
 
fredthered said:
Firstly, its not ridiculous if I am right, and he is wrong.

Secondly, you clearly dont understand it yourself, so therefore, how can you possibly know that I dont know anything about it.

I dont understand chinese, so it would be a bit rich me telling a chineseman he's not talking proper chinese...
Click to expand...

I certainly don't know enough to start preaching to those on here who do. I read a lot and whilst I wouldn't attempt to work out the figures myself I have a reasonable understanding of how people have come to certain conclusions. I doubt anyone on here has got it perfect. I do however know that you are embarrassing yourself by trying to sound knowledgeable but getting basic premises wrong.
 
7even said:
Listen Fred!

I don't know one single proper United-fan who don't support the G&G. I'm sick and tired of the way the owner milking my club. I feel sick of it and it's a disgrace they can do it inside the law.

But. And here is the reason why we argue all the time and you disrespect many posters who argue against you.

I don't hate the Glazers. You hate them. I dislike them. I can see the good and the bad without going overbord. Sooner or later the Glazer's will sell the club. I hope sooner. If a new owner can get rid of the PIKs we are in excellent shape. At the moment the club are OK, we do profit, but not more then that.
Click to expand...

Spot on. I don't even dislike them as individuals to be honest. I understand why as businessmen they are doing it. It's just not appropriate for a football club and is detrimental to the thing that matters most to us: the team and watching it.
 
RedRichio said:
I certainly don't know enough to start preaching to those on here who do. I read a lot and whilst I wouldn't attempt to work out the figures myself I have a reasonable understanding of how people have come to certain conclusions. I doubt anyone on here has got it perfect. I do however know that you are embarrassing yourself by trying to sound knowledgeable but getting basic premises wrong.
Click to expand...

I dont claim either to have the financial knowledge of alot of lads on here and sometimes I scratch my head wondering what they are on about. I, because of what I have read in here relating to the Glazers have learnt alot about how high finance works but still I am way behind the experts. One thing is obvious to me however, figures and books can be manipulated to suit and the Glazers are masters at this. Roodboy and Ciderman can be convincing about what they see backed up by Glazers inspired figures, but to me the ordinary fan the bottom line is we have a mountain of growing debt, 430m of money down the interest plughole and SAFs hands tied despite what he says.The club is in a very dangerous position IMHO, but then before some of the other side of the camp says it, Im no expert
 
Its just sickening to think what we could do if even 50% of our profits were reinvested in the team/club
 
UnitedRoadRed said:
It certainly highlights how poor the plc management team were at exploiting commercial opportunities
Click to expand...

Maybe they were...

So if the management team were so bad, why is the person who was running it all, offered a job after the takeover.
 
I dont claim either to have the financial knowledge of alot of lads on here and sometimes I scratch my head wondering what they are on about. I, because of what I have read in here relating to the Glazers have learnt alot about how high finance works but still I am way behind the experts. One thing is obvious to me however, figures and books can be manipulated to suit and the Glazers are masters at this. Roodboy and Ciderman can be convincing about what they see backed up by Glazers inspired figures, but to me the ordinary fan the bottom line is we have a mountain of growing debt, 430m of money down the interest plughole and SAFs hands tied despite what he says.The club is in a very dangerous position IMHO, but then before some of the other side of the camp says it, Im no expert
Click to expand...

You and me both. I don't pretend to understand the workings of high finance either but nobody has yet been able to tell me, in simple layman's terms, why taking a solvent business and loading it with an incredible amount of debt is a good thing for the average Manchester United supporter.
 
United have to expand into new markets and maintain existing ones. That's what managment under the Plc were doing successfully. The Glazers wanted to continue in the same vein and indeed to increase exposure to new markets. This is no indication that things were bad under the previous set up.
They would be doing the same
 
Moriarty said:
You and me both. I don't pretend to understand the workings of high finance either but nobody has yet been able to tell me, in simple layman's terms, why taking a solvent business and loading it with an incredible amount of debt is a good thing for the average Manchester United supporter.
Click to expand...

Its not a good thing. It was never a good thing.

On the other hand, people who scare you into believing that we're on the verge of doom and administration are over exaggerating
 
Interval Level said:
Its not a good thing. It was never a good thing.

On the other hand, people who scare you into believing that we're on the verge of doom and administration are over exaggerating
Click to expand...

I don't think we're on our way into administration but I do fear for the club in the post-Ferguson era when success on the pitch might prove to be elusive. All we need is to have a seaon or two out of the top four and things will begin to look shaky.

In all my years as a United supporter, I cannot recall an issue that has so polarised fans. Even when we were a poor second to Liverpool for all those years, the club was always able to maintain financial stability and splurge for big-name signings. The words "Manchester United" and "skint" were never mentioned in the same sentence.
 
fredthered said:
Maybe they were...

So if the management team were so bad, why is the person who was running it all, offered a job after the takeover.
Click to expand...

To be target of a great many frustrations and because the Glazers feared coming over here with the MEC in a more active mode back then?

Who knows, but if the plc had been run more effectively then the Glazers would have seen less opportunity to squeeze money out of the club which would have made the highly leveraged buyout less attractive.
 
Moriarty said:
I don't think we're on our way into administration but I do fear for the club in the post-Ferguson era when success on the pitch might prove to be elusive. All we need is to have a seaon or two out of the top four and things will begin to look shaky.

In all my years as a United supporter, I cannot recall an issue that has so polarised fans. Even when we were a poor second to Liverpool for all those years, the club was always able to maintain financial stability and splurge for big-name signings. The words "Manchester United" and "skint" were never mentioned in the same sentence.
Click to expand...

They may not have been mentioned but Tottenham outbid us for Gazza.
 
KingMinger22 said:
Its just sickening to think what we could do if even 50% of our profits were reinvested in the team/club
Click to expand...

Correct, think how that money could have been used to fund players or reduce costs for supporters, that is the plain truth which no one can argue with
 
UnitedRoadRed said:
They may not have been mentioned but Tottenham outbid us for Gazza.
Click to expand...

Perhaps we thought like we do today and there was no "value" in the deal. A house for Gazza's parents which we were not prepared to do was what swung the deal according to SAF's book
 
UnitedRoadRed said:
Who knows, but if the plc had been run more effectively then the Glazers would have seen less opportunity to squeeze money out of the club which would have made the highly leveraged buyout less attractive.
Click to expand...

I wouldnt say the PLC were poorly run (even in those days we were the most profitable football club in the world) but they definitely werent as agressive or effective in exploiting the United brand like the Glazers have done.
As you note, the PLC failure to maximise revenue is exactly why the Glazers saw an opportunity to pull off a LBO.


Crerand Legend said:
Correct, think how that money could have been used to fund players or reduce costs for supporters, that is the plain truth which no one can argue with
Click to expand...

The problem I have with this argument is that it is like having your cake and eating it too.
The Glazers have an agressive business model and this has resulted in increased revenue and profit at the club every year - the PLC were not so agressive so if it had still been around then it is unlikely we would be making anywhere near the amount of profit we currently make.
It is possible that ticket prices would not be as high as they currently are, but it is not right to say that there would be so much excess cash for players if the Glazers were not around - you cant have it both ways.
 
roodboy said:
I wouldnt say the PLC were poorly run (even in those days we were the most profitable football club in the world) but they definitely werent as agressive or effective in exploiting the United brand like the Glazers have done.
As you note, the PLC failure to maximise revenue is exactly why the Glazers saw an opportunity to pull off a LBO.




The problem I have with this argument is that it is like having your cake and eating it too.
The Glazers have an agressive business model and this has resulted in increased revenue and profit at the club every year - the PLC were not so agressive so if it had still been around then it is unlikely we would be making anywhere near the amount of profit we currently make.
It is possible that ticket prices would not be as high as they currently are, but it is not right to say that there would be so much excess cash for players if the Glazers were not around - you cant have it both ways.
Click to expand...

That's a bit specious - TV revenues have increased, spotlight on football has increased so there is even more awareness of football and more money flowing into football which United being the biggest club have taken advantage off. Also we have been successful on the pitch and our runs in the CL has contributed. Also until this year we have not declared a profit if I am correct.

In the absence of the Glazers would the ticket prices be as high - I doubt it. Would we have made as much in commercial activities - probably - what did the Glazers contribute in the commercial aspects of the club?

As to TV revenues and cup runs etc that is dependent on the team and SKy deals and the team performance on the pitch.
 
It is mostly on the commercial side and through pushing ticket prices as far as demand allows that Glazers have 'added value'.
They set up a specific operation in London just to deal with negotiating new commercial deals and spread the brand globally. This will also be the area that will see the most revenue growth going forward.
Ticket prices would definitely have gone up regardless of who was in charge but we dont know by how much - probably there would be no ACS but again just guessing.
 
roodboy said:
I wouldnt say the PLC were poorly run (even in those days we were the most profitable football club in the world) but they definitely werent as agressive or effective in exploiting the United brand like the Glazers have done.
As you note, the PLC failure to maximise revenue is exactly why the Glazers saw an opportunity to pull off a LBO.




The problem I have with this argument is that it is like having your cake and eating it too.
The Glazers have an agressive business model and this has resulted in increased revenue and profit at the club every year - the PLC were not so agressive so if it had still been around then it is unlikely we would be making anywhere near the amount of profit we currently make.
It is possible that ticket prices would not be as high as they currently are, but it is not right to say that there would be so much excess cash for players if the Glazers were not around - you cant have it both ways.
Click to expand...

Excuse me talking lay mans terms again to you financial experts but what profits are we talking about? All the money the club made since the Glazers came here, over 400m has gone in interest etc and the debt has gone up, the money spent on players after they kept the Ronaldo money has been next to nothing. Higher qualified than me you are to talk on financial matters but you are not convincing me that the figuers are not being manipulated to make the Glazers look good and the facts are we are broke
 
What happened to that other poster imperial something? he was quite clued up on this stuff.
 
roodboy said:
It is mostly on the commercial side and through pushing ticket prices as far as demand allows that Glazers have 'added value'.
They set up a specific operation in London just to deal with negotiating new commercial deals and spread the brand globally. This will also be the area that will see the most revenue growth going forward.
Ticket prices would definitely have gone up regardless of who was in charge but we dont know by how much - probably there would be no ACS but again just guessing.
Click to expand...

Just taking the figures from what you posted

..................07-09 growth...08-09 growth
Tickets.........17.5%..............7.7%.........
Media/TV........62%...............9.9%.........
Commercial......24.8%.............9.2%......

In 07 Commercial revenue was 26.7% of total revenues and in 09 it was 25%

I am not sure whether we will see the most growth in commercial revenues as as a share of total revenues it has declined mainly due to the rise in media revenues.
 
Crerand Legend said:
Excuse me talking lay mans terms again to you financial experts but what profits are we talking about? All the money the club made since the Glazers came here, over 400m has gone in interest etc and the debt has gone up, the money spent on players after they kept the Ronaldo money has been next to nothing. Higher qualified than me you are to talk on financial matters but you are not convincing me that the figuers are not being manipulated to make the Glazers look good and the facts are we are broke
Click to expand...

When I say 'profit', I am usually talking about operating profit or the much talked about EBITDA.

Why would I want to manipulate the figures to make Glazer look good? What do I have to gain from that? Regardless of what anyone else may think - I have said all along that I am not proGlazer.
As I realise that many people, like yourself, do not have enough experience to understand our financials - all I try to do is analyse the figures and give my conclusions. Most importantly I have been trying to explain that things are not as bad as you seem to think - I thought people would be happy to hear this news but it seems not !!
 
Status
Not open for further replies.