precisely
The games are sold to Setanta by the premier league.
Nothing at all to do with United.
ALL issues relating to the bond issue and club finances
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precisely
The games are sold to Setanta by the premier league.
Nothing at all to do with United.
Is that so?
Because I downloaded a Sky Mobile TV app on my iPhone for £6/month and get not just ESPN but all the Sky Sports channels too - all of which stream live games directly from the channels.
There's two distinct strands to this debate.
1. Is the Glazers' business plan viable?
2. Do we want them as owners?
IMO, it's quite possible to answer "Yes" to the former and "No" to the latter.
What I do find strange is that Fred et al seem to be concerned about the Glazer's business plan hitting the wall, when they should be delighted, seeing as that's the only way they'll sell up any time soon.
1. Is the Glazers' business plan viable?
2. Do we want them as owners?
IMO, it's quite possible to answer "Yes" to the former and "No" to the latter.
What I do find strange is that Fred et al seem to be concerned about the Glazer's business plan hitting the wall, when they should be delighted, seeing as that's the only way they'll sell up any time soon.
Quite. If they are so confident sit back and watch it fail.
That is a good post Fred!
But the technology is there and like Walrus and Cider write outside UK you can add an app and download highlight's. The NHL have it and I can see the PL or United do the same.
Even if the club must share it's still an increase of revenue.
Why do we focus on the owners. It's the depts who is the problem not the Glazer family. I understand if you dislike the depts but the club is sold and the depts is there. Nobody can change that and the depts will be there with or without the Glazers as long as we are not listed at the stock market.
I believe Fred is right that, as of next season, ESPN have the exclusive Premier League mobile rights for the UK. I think the deal was for three years off the top of my head.
EDIT: ESPN wins mobile Premier League rights from Sky - Media news - Media Week
What does that mean for games shown on Sky Sports?
Right I can watch all Sky Sports Channels and ESPN for £6 a month.
I hope this means I keep all that, but just have to pay ESPN rather than Sky.
EDITED OUT: This is totally separate to television rights as far as I understand it. In those terms, Sky Sports have no rights to broadcast PL matches to mobile phones next year, only ESPN do. It doesn't matter who has the TV rights to a game, ESPN have the mobile rights. That's how I understand it anyway, feel free to correct me.
EDIT: Actually Fred and I are wrong: "Despite losing the short-form coverage, Sky will continue to show full live games on mobile phones via its Sky Mobile TV app." Digital TV - News - ESPN to offer Premier League mobile clips - Digital Spy
It's the highlight clip rights, both shown in-game and post match, that ESPN have (Sky previously held this right).
Beat me to it. Facts fred? Nah, just make stuff up to suit.
It's amazing that rule to now show 3 o clock kick offs still exists really, what with streaming to easy to get and the fact that a good chunk of any teams fans wont be at the game these days.
It's an absolute nonsense. And insulting to supporters of lower league teams across the country really. They should be able to fend for themselves, and then be given an extra amount of money from the Premier League anyway to make sure the whole structure of the game stays in good health. We should be able to follow our own top flight teams on TV every game they play. They essentially do it abroad with our league, so why not us? It's a stupid, ridiculous artificial construct that really needs bringing down. People are entitled to watch what they want to watch, especially when they're paying a subscription to do so, and there's no technological reason why they can't
Good point.
If things were not going to plan and the Glazer's really were struggling then they would obviously sell up as soon as they could. In fact that is exactly what has happened at Anfailed where their owners have made it publicly known that they want out.
Personally, in this thread I have been entirely focused on answering the first question and clearly my conclusion has been that the answer is 'Yes'.
I believe the original discussion about mobile rights related to all the new mobile phone sponsorship deals the club has signed up - these deal are all in overseas territories (Saudi Arabia, India, South Africa etc) so does not relate to the UK rights at all.
The more general issue was about new potential revenue streams for the club going forward as some people are rightly questioning where further profit growth is going to come from.
I believe we will see commercial revenues eventually outgrow matchday revenue (which is currently our main source of income) plus that there is still a lot of potential for bringing in more cash from our overseas fanbase.
Unless I've missed something in the reports, the plan has only been viable by selling players and providing next to no transfer income. At the same time ratcheting up ticket prices of course. And this without removing crippling PIK debt, and being forced to refinance and in doing so make all the accounts open and public, something clearly the Glazers would never have wanted to do. All the time we have a huge base debt that will need to be repaid in 2017, and we're showing no signs of raising the money to pay that off
So if you're arguing it's a viable business plan, it must be absolutely on the borderline of viability, and it comes at the cost of the match going supporter having to pay stupid amounts of money just to watch their team regularly, and the effective waste of all the profits the club would be making if this debt not of their own making wasn't placed over our heads, which could otherwise be pumped back into the team and ticketing become more affordable and reasonable again
Intersting concept really then, 'viability'
So if you're arguing it's a viable business plan, it must be absolutely on the borderline of viability, and it comes at the cost of the match going supporter having to pay stupid amounts of money just to watch their team regularly, and the effective waste of all the profits the club would be making if this debt not of their own making wasn't placed over our heads, which could otherwise be pumped back into the team and ticketing become more affordable and reasonable again
Intersting concept really then, 'viability'
Yup, that's the situation we find ourselves in Brad.... but, it could be worse?
Added: although I'm not sure I agree with the part about transfer spending...
What reports are you refering to Brad? The financial reports or the media ones? As far as I am concerned you can pretty much ignore most articles from the media as most are full of inaccuracies.
There also seems to be misconceptions about refinance and paying back the debt. The reality is that refinance was always going to part of the business plan and will be again in 2017. They may well pay off the PIK (their exact intentions for that are still unclear) but the bulk of the debt is here to stay.
I do not deny that the matchgoing fan has lost out but that is a seperate issue for me. Here I talk about viability only from a business angle and it seems clear to me that it is viable, and quite comfortably so (note that there is around £100m of excess cash currently in the club bank account).
We know that MUST/SU have said since day 1 that the Glazer plan was too agressive and in fact they specifically predicted that it would fail within 3 years - clearly history has proved that they were wrong then and I believe they are still wrong now to question the viability of the business plan.
There also seems to be misconceptions about refinance and paying back the debt. The reality is that refinance was always going to part of the business plan and will be again in 2017. They may well pay off the PIK (their exact intentions for that are still unclear) but the bulk of the debt is here to stay.
I do not deny that the matchgoing fan has lost out but that is a seperate issue for me. Here I talk about viability only from a business angle and it seems clear to me that it is viable, and quite comfortably so (note that there is around £100m of excess cash currently in the club bank account).
We know that MUST/SU have said since day 1 that the Glazer plan was too agressive and in fact they specifically predicted that it would fail within 3 years - clearly history has proved that they were wrong then and I believe they are still wrong now to question the viability of the business plan.
Of course, their business plan might be viable but at what cost?
Is the intention to keep ticket prices as high as the market can bear and only spend just enough money on players to hold onto that lucrative CL spot, without ever making the kind of investment that would allow United to achieve the sort of dominance on the pitch that reflects the enormous sums of money being earned of it?
It's a sensitive subject because it smacks of glory-hunting but if they're going to charge premium ticket prices, is it really unreasonable to expect the owners of Manchester United to continue the investment in the squad that had become the norm in the days of the PLC? Too early to know what's going on, transfer-wise but it's going to be interesting to see what happens this summer.
Is the intention to keep ticket prices as high as the market can bear and only spend just enough money on players to hold onto that lucrative CL spot, without ever making the kind of investment that would allow United to achieve the sort of dominance on the pitch that reflects the enormous sums of money being earned of it?
It's a sensitive subject because it smacks of glory-hunting but if they're going to charge premium ticket prices, is it really unreasonable to expect the owners of Manchester United to continue the investment in the squad that had become the norm in the days of the PLC? Too early to know what's going on, transfer-wise but it's going to be interesting to see what happens this summer.
I don't think this summer is that interesting as we really don't need much work done to our squad.
But in the next two/three years VDS, Rio, Giggs and Scholes will have to be replaced.
But in the next two/three years VDS, Rio, Giggs and Scholes will have to be replaced.
I'd go with that. Let's take a look at things in September when some proper conclusions can be drawn.
Debate about United has almost become impossible on here without the Glazers being mentioned; whatever happens we end up with the ownership becoming the centre of the discussion and blind hatred colours much of what is written. In fact it has got so bad that, for some, anyone who makes any point that suggests the Glazers might not be the worst owners in history are immediately accused of being lovers, blind, etc. etc.
Whilst I am by no means fond of the Glazer ownership and remain a member of MUST, despite misgivings about some of their pronouncements, I still try and be open minded and certain aspects about their ownership has not been bad.
Incidentally once we became a PLC the club went into a form of debt also I cannot remember a time when fans were content with the ownership ---- much criticism was heaped on Edwards, both Louis and Martin were disliked, and there were constant moans about the PLC especially in regards to transfers. The increases in ticket prices is bad however they would have gone up more than fans would have liked whoever owned the club.
I think that might be a bit unfair seeing as this is the first season in 3 in which we haven't had the squad capable of winning the league (and let's face it we were only 1 point off) we've also reached 2 cl finals during that period. That doesn't smack of keeping us just above the minimum level required. The big thing here is the Ronaldo sale which skews things somewhat in the short term. Someone (GCHQ?) posted figures showing that CAPEX (which they tell me they use to measure transfers etc) in the years before the Ronaldo sale showed an outflow of c27m compared to c23mill average for the last 3 years of the PLC. As you say it'll be interesting to see this transfer window what they do but realistically it's going to take a few years for a true picture of their spending to re emerge after that exceptional one off payment. The sad thing is that even without the debt burden Man City/Chelsea/Real Madrid could still outbid us with relative ease.
Ticket prices are the real things where fans can feel hard done by. They're still very reasonable in comparison to a lot of our rivals but the ACS scheme is quite nasty and we have shown a high percentage increase in price over a relatively short period.
But we don't have to splash the cash every summer, our squad is pretty settled at the minute, bar a few tweeks here and there....our recent success speaks for itself surely??
Just because our net spend has decreased a little really means feck all if we have continued to be successful on the pitch.
Just because our net spend has decreased a little really means feck all if we have continued to be successful on the pitch.
There's a rather big Ronaldo shaped difference between our squad which was successful recently, and our current squad.
These mobile rights hardly scream 'cash cow'
I believe MUTV makes 100 grand profit per year. That's a weeks wages for Rio.
I believe MUTV makes 100 grand profit per year. That's a weeks wages for Rio.
MUTV doesn't show live games they are delayed, Will the mobile companies have live games?
I'm still waiting for Fred's exposé on GCHQ. Is he still gathering evidence or what?
Using GCHQ own figures he contends that it's not much difference between the two situations below
Under Glazers debt to £520.9m + (22.3m interest rate liability outstanding) = £543.2m + PIK loan of £220m secured against the assets of United. = £743.2m
Under PLC ownership = No debt and £162.3m extra cash in the bank.
FT.com / Companies / Travel & Leisure - Manchester United owners rule out sale
Results showed third- quarter revenues increased 4 per cent to £74.6m as commercial turnover rose 11.6 per cent year on year to £19.3m. Media revenues rose 9.4 per cent to £21.3m on the back of an increase in television income for the Champions League.
Earnings before interest, tax, depreciation and amortisation fell 10 per cent to £23.4m.
Red Football, the holding company for the club, disclosed a loss of £40.7m relating to interest rates swaps linked to previous bank debt. It was £5m worse than suggested in a bond prospectus earlier this year.
So on the one hand small percentage increases or low double digit increases increases are pretty good but not being £740m plus in debt and £160m plus pounds down is not massively better.
Is that being objective?
Im a bit confused by your post - what exactly are you trying prove here Commandus?
GCHQ has clearly said that he thinks we probably would have been better off without the Glazers and large debts - I dont think you would find many people who will disagree with that.
GCHQ has clearly said that he thinks we probably would have been better off without the Glazers and large debts - I dont think you would find many people who will disagree with that.
Good post
The £437m of Glazer costs
That's Andersred's post about how much the Glazer's have cost the club in the five years since they took control. Tellingly, he also has this to say, and it will be interesting to see if anyone can significantly discredit it:
It would also be churlish not to mention that revenues have significantly increased since the Glazer's took control of the club, but the difficulty of separating the things that have directly or even indirectly been loaded on to the fans, from the things that have increased quite naturally and would have done so whoever was in charge, from the things that the current owners have genuinely been responsible for, without any extra cost to the fans, significantly weakens that as an argument, unless someone is prepared to have a go at it.
That's Andersred's post about how much the Glazer's have cost the club in the five years since they took control. Tellingly, he also has this to say, and it will be interesting to see if anyone can significantly discredit it:
It would also be churlish not to mention that revenues have significantly increased since the Glazer's took control of the club, but the difficulty of separating the things that have directly or even indirectly been loaded on to the fans, from the things that have increased quite naturally and would have done so whoever was in charge, from the things that the current owners have genuinely been responsible for, without any extra cost to the fans, significantly weakens that as an argument, unless someone is prepared to have a go at it.
Exactly. A transaction that occured just 11 months ago that smashed the world transfer record. It seems pretty reasonable to me to conclude that you have to wait for a period of at least two years after that extraordinary transaction in order to form any definitive conclusion of the net expenditure on players during the Glazers ownership of the club. The two year period is especially significant because you would assume it would include the retirement of at least a few of our most experienced players at the end of the second year and it would therefore be fair to expect significant net expenditure when those players have in fact retired.
A quick look at our current playing staff shows a first team squad packed with experienced, highly skilled and well payed players. It's not like the squad is weak in terms of numbers, which would be a good indicator of a decline in spending. I think it's sensible to assume that some of those experienced players will have to leave the club in order for several new first team players to come in and that is why I specifically make mention of the likely retirements next year. If Fergie is happy to keep the likes of Carrick and Berbatov for instance, for another year, then I wouldn't expect anything more than one major new signing for the first team this summer. There just wouldn't be room for anymore unless Fergie was happy to move some of the current first team members on (and of course the club needs to find a buyer willing to pay a reasonable fee for those players).
The figures below are taken from the club's independently audited accounts since the 2005 takeover.
The total amount of cash spent on the purchase of new players since the 2005 takeover up to the end of 31st March 2010 has been £215m.
The total amount of cash received from the sale of players since the 2005 takeover up to the end of 31st March 2010 has been £157.5m
So total net cash spend on players over the near enough five year period has been £57.5m or an average net cash spend of £11.5m per year.
By way of a comparison the total net cash spend on players in the five year period prior to the 2005 takeover under the PLC was £89.4m or an average spend of £17.9m per year.
The obvious thing to notice about the figures for both cash spent and cash received since the 2005 takeover is that they are both very large. There has for instance been an average cash spend on new players of £43m per year across that five year period. I think it's worth pointing out that the club has been successful over that period at selling young players for good sized transfer fees who either weren't quite good enough (Campbell, Richardson etc) or who wanted to leave (Rossi, Pique). I can't personally recall so many similar sized sales in the previous five year period under the PLC.
It's also worth noting that the net spend year to year in the last ten years has been very ''lumpy'' in nature. There have been massive fluctuations in the net cash spend from one year to the next both in the five years prior to 2005 and also in the five years after 2005.
Ultimately you simply can't compare the two five year periods without appreciating the huge impact that the sale of Ronaldo, for £80m just 11 months before the end of one of those periods, makes to the figures. Take that £80m out of the equation and the net cash spend in the five years post-2005 takeover goes up to £137.5m or an average spend of £27.5m per year. If you want, take half of the transfer fee out of the picture and the average spend is £19.5m per year, still a significant difference when compared to the actual net spend that there has been of £11.5m per year. Alternatively if you were to look at the full three year period from 2005-2008 before the sale of Ronaldo took place right at the end of the 2009 year, you would find a net cash spend of £23m per year or a total net spend of £69m.
Now some people argue that the club knew that Ronaldo would eventually leave the club for a huge fee and so for that reason felt able to commit to spending significant amounts of money in the Summers of 2007 and 2008. I just don't think that argument stands up to scrutiny though. I mean there is far too much risk involved in that strategy for a start. How would the club have felt in anyway confident enough to pursue that strategy when any number of negative factors could have affected the value of the player in the period before he was sold? And how would they know that Real Madrid would pay quite so much money for him, particularly back in 2007?
It just doesn't seem conceivable that the club could have committed itself to spending £65m-£70m on new players back in the Summer of 2007, and then relying totally on the sale of Ronaldo for a massive fee in the next few years to cover that very significant outlay. It's a nonsense really for me.
None of the above actually mentions that the club has committed itself to spending c.£40m on new players since Ronaldo left the club anyway. Indeed the club has confirmed that they offered Lyon £30m for Benzema last summer.
I haven't even touched on the fact that total staff costs (wages etc) have increased by around £50m since 2005, up to c.£130m in 2010 from £80m in the last year of the PLC. Now given the increases in revenue since 2005, particularly media revenue which naturally inflates players wages because every PL club benefits from rises in the value of the league's broadcasting rights, you would have expected a very significant increase and indeed other clubs have also seen a massive rise in their wage bills. The size of United's wage bill is the second highest in the league behind Chelsea (City will be very close to us now, which is what happens when you pay the likes of Adebayor £180,000 a week), and that means that the club is still very much able to compete for top honours and maintain a very strong playing staff and the results on the pitch since 2005 clearly support that view.
So to conclude I would say that people need to take a step back and appreciate that it's not as simple as saying, ''Well we sold Ronaldo for £80m, why haven't we spent it yet?''. The club were clearly very keen to sign Benzema last summer but when that failed, instead of panicking and rushing in to signing another expensive foreign player, Fergie was clearly prepared to take a more long-term view safe in the knowledge that his current squad was still strong enough to compete for the top honours and he was proven right to think that on the evidence of last season.
I think David Gill outlined the reasons for the slight changes to our transfer policy pretty extensively in his interview with the Independent. The club hasn't suddenly run out of money or has less to spend than it did in the past, far from it in fact, it's simply due to financial circumstances outside of our control (tax rate, exchange rate, Madrid/City inflating the market) but also due to the disappointing return we've had from the signing of a certain Bulgarian.
Can I clean your ring with my tongue please gchq?
Very very good post.
The last lines is more true then ever. Look at Madrid, Milan an Barcelona. Ronaldinho, Zlatan and Kaka is not what I call value for money. Benzema? I'm not sure but he's still young.
Players like Nani, Ando and Valencia are more value for me then above superstars.
GCHQ
Where you get your figure of £89.4m for net cash spend by the PLC?
Where you get your figure of £89.4m for net cash spend by the PLC?
Just got pm from fellow poster and couldnt resist posting. He has finally worked out what GCHQ stands for, Glazer Corporation Head Quarters
Just some clarification please.
So the end of 08 we had a net cash spend of £69m.
At the end of March 31 2010 we had a net cash spend of £57.5m
So between the two dates we spent £11.5m less than what we earned- this period included the sale of Ronaldo. What were the ins and outs re the players costs.
The PIK loan isn't secured against the assets of United so that's quite a key point to clear up for a start. The cost to the club of the c.£500m debt is of course included within the figure of £162.3m (which includes one-off financing costs of £80m).
£162.3m is the net amount of cash that has left the club under the Glazers compared to what would have happened under the PLC, if we work on the assumption that the PLC would have generated the same revenue and cash earnings that United has under the Glazers ownership. That is where the comparison becomes very difficult to make though. Would the PLC have matched the revenue and cash earnings that United have achieved under the Glazers ownership?
We'll never really know exactly but it seems fair to assume that the amount generated from matchday and commercial revenue in particular wouldn't have been as high. If you agree with that assumption then in order to make a relatively accurate comparison between the two ownership structures we get into a very complex set of calculations.
We firstly need to come to some sort of agreement of the positive impact on EBITDA that United has benefited from under the Glazers ownership compared to what would have happened under the PLC structure. I would suggest a figure of £15m based on last year's (year ending June 2009) results. What has the total combined positive EBITDA impact been over the five year period? My suggestion would be a figure of £50m. Now clearly you then need to take off the reduction in corporation tax and dividends from that £50m of EBITDA that wouldn't have had to be paid out under the PLC structure, I'd estimate £20m, so a net improvement for the club of £30m over that period. So on that basis the £162.3m figure becomes £132.3m in terms of the comparison of the two ownership structures. So just over £300m down on your original estimate.
Now before anyone starts having a heart attack, I of course recognise that the majority of the positive EBITDA impact that I think the Glazers ownership has added in comparison to what the PLC would have achieved in that five year period, has come from higher ticket prices and therefore to the detriment of the matchgoing supporter. I have suffered from those ticket price rises myself, believe it or not!
My whole argument is based solely around what the impact has been on the finances of the club itself. Too often you have people throwing figures around that just can't be backed up when they're looked at more closely. And that is what annoys me really. It's not that I'm pro-Glazer or anything like that. It's just that I would like people to present an accurate picture of the club's financial position, which is very healthy as far as I'm concerned, without having to use spurious and sensationalist arguments and figures in an attempt to justify their particular point of view.
Wow, you were quick off the mark there.
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