When the malls are being allowed to go into default, I think it also demonstrates that the Glazers won't be using "United money" to prop them up, either.
ALL issues relating to the bond issue and club finances
- Thread starter sammsky1
- Start date
- Status
When the malls are being allowed to go into default, I think it also demonstrates that the Glazers won't be using "United money" to prop them up, either.
Geebs, we're all here to voice our opinions and to hear the opinions of others. You shouldn't try to silence another simply because his/her opinion may not be the most popular or mainstream.
What do you think Andersred and the other militant boycotters are trying to achieve here? Do you find them irritating?
Fans will form their own opinions about the financials primarily based on the information available to them. If the vast majority of available information is one sided and presented with a strong degree of bias then they are almost certain to form the wrong opinion. And that's not to say I think anything that I say on here will have any impact on anyone, I of course don't think that, but personally I believe the high profile campaign against the owners is potentially damaging to the club and that is where my motivation comes from.
I can understand you finding it irritating. There's plenty of stuff on here that I find irritating but judging from some of the comments in this thread there are also a lot of people who don't find the debate irritating (or at least they didn't up until a few months ago
). If the debate is kept to a few appropriate threads, which it generally has been, then is there really any harm being done?In the order of priorities, controlling the PIKs must rank above saving the malls. If First Allied (and the Bucs) aren't doing well then it must increase the chances of the Glazers taking management fees and expenses out of the club.
I started looking at First Allied originally because the bond looked like a mechanism to take cash out of the club to pay the PIKs and I wanted to know whether their were other alternatives to that open to them. Selling the Bucs is clearly still an option, but otherwise (given they have had to declare their major business interests in regulated filings and FAC, the Bucs and United are all they have) using the club's money looks like the only option....
You added '(and the Bucs)' there, seemingly as an afterthought as it's needed to qualify the rest of your post. Are you in possession of the Buccs' accounts?
I wish I was!
All we have on the Bucs' profitability is Forbes 2009 EBITDA estimate ($69m), and their debt estimate ($143m). So assuming 6% interest on the debt that's about $9m in interest. Knock off some depreciation (say $10m) and that's around $50m of pre-tax profits. US corporation tax is 35% so that's $32.5m of post-tax profits.
That was last year. We know (on the same TV deal) that ticket sales are down sharply so I'm assuming that number is flat to down this year. In sterling terms $32.5m is around £20m.
So I can't see the Bucs being well placed to provide the Glazers with the money to repay the PIKs.
That's all....
Sounds pretty inconclusive. Do we know anything then of the Glazers' personal wealth?
GCHQ is definitely an employee.
Why else would you spend whole days on the internet defending our leveraged buyers?
Why else would you spend whole days on the internet defending our leveraged buyers?
Andersred that's great work btw!
are you saying that one sides comments on the divide are irritating or both GB.
For most of us I think its proving an interesting thread carried out in the main in a reasonable manner.
Excellent.
Ciderman - your argument about the whole retail sector in the US struggling as a defence for the Glazer's business acumen is hilarious. They are over indebted and have made bad decisions to overstretch themselves in an extremely volatile sector.
GHCQ what are you qualifications/experience levels regarding business finance?
My own understanding is that the Bucs have $95million debt.
My own belief is that the Glazers will do everything in their power NOT to pay taxes and I would be very surprised to see a tax bill anything like that which you suggest on their accounts - I'd love to see those accounts. I'm almost certain there'll be all kinds of Management Fees and the like on there.
I must be missing something but even by your own figures (which by definition are likely to be conservative/worst case), it would suggest that there's £20million/year right there that the Glazers could use towards their PIKs?
They've not had any mechanisms to take money out of United yet on the scale required to retain the malls.
As Andersred said, the priority for them must/should be the PIKs, but there appears to be only one place for the payment of them to come from.
This sums it up.
Anyone who can't see the significance to a business of its owners struggling with all of its other investments is being very, very ignorant.
The evidence suggests that the Glazer's are cash poor. Otherwise they would have tackled the PIKs a long time ago. That interest is draining money away from their banks because they haven't got the liquidity to pay them off.
KingMinger what are you qualifications/experience levels regarding business finance?
Anders, perhaps you could tell us what forbes valued the bucs at that year and what the debt ratio is. In 2005 it was valued at 1.2 billion dollars I think.
He has proven on countless occasions in this very thread that he hasnt got a clue in this regard.
This article gives an interesting overview of the value of the Buccs up to around 2006.
#8 Tampa Bay Buccaneers - Forbes.com
The last valuation I can find is $1,085billion.
NFL Team Valuations - Forbes.com
The Buccs debt is $95million.
Glazers deny trouble after debt report - St. Petersburg Times
That last article is quite funny because it seems to suggest that Buccs fans are concerned that the Buccs will be paying off some of the PIKs!
Not at all - no one knows what exactly their business interests are and even if it was just MUFC, Bucs and FA (which I doubt) that still tells you nothing about their own personal wealth.
However I still think they will use excess cash from MUFC to pay off some of the PIKs and the reduction in debt levels at United is a good thing as far as I am concerned.
The only reason they wouldnt is to avoid negative P.R. - in fact I'm sure MUST have the sensationalist press release written already!
Something I read...
The PiK's though have the biggest interest rates are lower down the repayment schedule, because the banks who have loaned a bigger amount of money have the first rights to repayment. This bond issue is supposed to take care of the banks, leaving the Glazers free to tackle the PiK issue at maturity.
Not sure how true this is....
The PiK's though have the biggest interest rates are lower down the repayment schedule, because the banks who have loaned a bigger amount of money have the first rights to repayment. This bond issue is supposed to take care of the banks, leaving the Glazers free to tackle the PiK issue at maturity.
Not sure how true this is....
The $95m is the mortgage debt - that's a verified figure (because mortgages have to be filed). The $143m number is from Forbes. In the absence of anyone else having a number, I'm happy to go with Forbes. Management fees etc would be included in EBITDA.
This is Forbes graph of EBITDA since 2000:
The £20m was the 2009 number. My point is that it will be lower now as ticket sales are down sharply.
This is Forbes comment from June:
This is the link to that article:
Value of Tampa Bay Buccaneers Sinking - SportsMoney - news on the business of sports - Forbes
This is the link to the 2009 valuation:
#8 Tampa Bay Buccaneers - Forbes.com
The banks had first lien, meaning that the Glazers had to pay the banks back what they owed them before they could tackle the PIKs.
This was never their intention (they have no intention of paying off the principal amount any time soon) and that is why they did the Bond Issue - to pay off the banks.
This leaves them free to tackle the PIKs now.
So what is this $143million number apart from being "Forbes number"? I don't get it.
It's been paid. If it's closer to the £230M than just the rolled-up interest of about £100M, which it might be -they'll go into hyperdrive (with good reason).
Well i'm glad i can make you laugh.
What did anders say the loss was on the malls? 13% closed down or something? I'm not able to check right now, but is was something like that, perhaps you could check back on the exact figure yourself.
Anyway, my question to you would be: do you know for a fact that that figure indicates bad business practice during the recession? Perhaps 13% losses is merely average for the industry during a time of struggle, perhaps the Glazers have coped well in the unfortunate circumstances?
If you can stop laughing at the hilarity of it all for a second, can you find the time to comment on the US mall industry and which decisions by those invested in it, either good or bad, have contributed to its current state in the wake of the global recession, and how you see the industry progressing/degressing in the future?
Well under FSA rules they had to declare their business interests in the 2005 offer document. They had to do the same in the 2006 IM. In both documents they listed the Bucs, First Allied and Zapata (now sold). In the January 2010 bond document they were obliged to list the other business interests of the directors of RF (i.e. all the kids). They did this (down to the detail of Bryan being on the board of directors of the advisory council for Ronald McDonald House) and the only businesses mentioned were the Bucs and First Allied.
So unless they have deliberately and consistently lied in official documents for five years, those are their only business interests. At the time of the bid in 2004/2005, the local Florida press couldn't work out how they were going to pay for United without selling assets - the answer being "shit loads more debt" of course. Here's a piece from around that time from the local paper:
So let's tot up the evidence:
1. No declared business interests except the Bucs and First Allied.
2. No PIKs repaid so far.
3. No significant investment in the Bucs.
4. Baffled Florida commentators as far back as 2004 wondering where the money was coming from.
5. Zapata and properties sold in recent years.
6. Suggestion they borrowed to buy the Bucs.
7. All personal properties bought on mortgages, none for cash.
8. Personal loans taken out from United (for feck's sake).
9. First Allied generating virtually no cash ($9m before any support of centres with DSCRs below 1x and before the costs of running the business including three offices and 30+ staff).
10. The Bucs generating around £20m last year before a collapse in ticket income.
vs.
1. Er....
Do they have huge portfolios of financial investments or art or a valuable wine cellar? Well maybe, but remember not all the £272m of equity in United came from remortgaging so I imagine that had to liquidate financial assets to find the balance. Nor have stock markets been anything other than shit in the last few years.
All the evidence points to them being a classic case of "asset rich, cash poor."
I got a bit out of my depth looking at the financial statements. I quickly realised I was wrong thanks to you correcting me. Why do you have go on about it like I'm an idiot? Do you act like that offline?
You haven't been 100% correct have you throughout this thread, have you?
Is there any chance the $74m they sold their stake in Zapata for last year might go toward the PIKs? Seems an awful lot of money to stuff under the mattress.
So The Glazers have any malls in and around DC, Manassas I could swing by and take some pictures of occupancy
First Allied Corporation - Property Detail
Edit
Swung by this mall yesterday and if it wasn't for the Aldi it would be dead. In and around this mall are a fair few other malls that are busier.
First Allied Corporation - Property Detail
Edit
Swung by this mall yesterday and if it wasn't for the Aldi it would be dead. In and around this mall are a fair few other malls that are busier.
Sometimes I can't decide with you Anders if you're "Financial Analyst Rich but everything-else-pretty-damn-poor" or you're deliberately withholding half of the story and this is what is so infuriating.
The "Evidence" you give up there is half opinion rather than fact and, understandably, I suppose, gives nothing away that does not fit in with your argument.
The gaps are, as always, left for the rest of us to fill in for ourselves.
"Baffled commentators"? Had these people never heard of borrowing money in order to buy an asset worth £830million? Did anyone truly expect them to pay for it out of their own pocket, even if they possessed that amount of money in liquid assets? Given the Glazers' track record of using borrowed money to fund their ventures, I would have thought it a no-brainer.
From a business point of view, if you wanted to get into the "Buy-to-Let" game and you had £100k to invest in the business, what would you do?
Buy ONE house for £100k cash and rent it out at (say) £600/month giving you an income of £7.2k/year and control over a £100k asset (potential £200k - say) or would you get mortgages for TEN houses at a 10% deposit on each giving you a potential £72k/year income (but perhaps a £36k/year interest bill) and the potential to control perhaps a potential £2million in assets (although £900k would still be owed to the banks) for the same initial outlay?
The second option might appear riskier but there is something to be said for having ten properties rather than one - if your ONE is ever unoccupied, you have no income, with ten properties, so long as you can keep 7 or 8 out of the 10 occupied, you're probably doing ok.
You are making the flawed (in my opinion) assumption that because the Glazers haven't withdrawn every cent they own and exposed it to the risk of business then that must mean that they don't have any personal wealth.
Having taken Malcolm Glazer the best part of 65 years to build himself up from nothing to billionaire, surely it is understandable that he doesn't expose everything he has every time he starts a new venture? That would be crazy and it is not too dissimilar to the gambler using a 100% rolling bank.
One day, the whole lot could blow up in his face and he's left with nothing.
I am also a bit bemused by your comment at the end there;-
"Do they have huge portfolios of financial investments or art or a valuable wine cellar? Well maybe, but remember not all the £272m of equity in United came from remortgaging so I imagine that had to liquidate financial assets to find the balance. Nor have stock markets been anything other than shit in the last few years."
I thought your theory was that it probably WAS all borrowed money?
Now you are suggesting that they DID have wealth tied into assets but now don't because it has already been liquidated.
And all the while, taking all this as "proof" that the Glazers have no personal wealth.
They sure do seem to get through some serious moola these guys. I don't know what they spend it all on but it can't be haircuts and plastic surgery!
It's possible, of course it is. Wouldn't they have applied that money to the PIKs in June 2009 when they sold Zapata though? They'd have saved around £5m in extra rolled up interest if they had.
My guess (just a guess note) is that that money was required by First Allied. There may be corporate (non-mortgage) debt at the parent company level for examplee. Whether there is or not, First Allied is almost certainly supporting some shopping centres through capital injections - they couldn't pay their mortgages otherwise.
When I originally looked at peer group companies (REITS), before I realised I could get in through the CMBS, it was notable that they had all issued significant equity to deleverage during the last two years. On average, retail REITS had issued equity equivalent to 30% of net assets. As a private company, this option isn't open to First Allied, but the need to bolster the balance sheet is just as real.
Like I say, a guess!
Because you are?
I dont claim I have, but I reckon I have been at least 99% correct
Plus on the particular point you quoted I am correct. Andersred may try and argue otherwise but the fact is that he does not know all the details of the Glazer's business interests or personal wealth.
Andersred I am sure I do not need to explain to you the intricacies of offshore trusts etc - they will obviously have declared their interest in any public holdings but are you going to try and tell me that means there is nothing else?
I am sure you are not that niave.
Also you talk about 'cash poor' - but how much did they sell Zapata for?
TMRD said:
GCHQ doesn't like this comment
Andersred in 'only telling one side of the story' shocker!
Sucks to be Drasdo's bitch.
Sucks to be Drasdo's bitch.
It's circumstantial evidence. Absolutely. In the absence of Malc's bank statements it's all we have to go on.
Obviously they should have guessed he would be ringing round the banks. Totally agree. In just the same way you flounce around on here saying "the Red Knights don't have the money", I wanted to show that local business journalists didn't think he "had the money" in 2004. As local business journalists they might have had some insight into the subject.
No, actually this is what I think about the £272m (from 8th June):
Me said:
Like I say, circumstantial evidence.
The lowest spending owners in the NFL, who have failed to pay off a single penny of the ruinously expensive PIKs, who felt it necessary to borrow from Manchester United, who have been selling assets (but not acquiring new ones) and who's real estate business is in trouble are probably a bit strapped for cash.....
That's what I think. You, pointing to no evidence, can of course think different.
What's the other side cider?
I reckon Zapata (£46m) went to First Allied - see above.
Sorry, on offshore trusts, I doubt it. Far be it from me to be nice about the Glazers but you are taking a big risk with the IRS going down that route. All the family trusts are Nevada domiciled.....
EDIT: 3 posts in a row, apologies. I'm off to explain to my boss why what appears to be a lack of work by me is only circumstantial evidence and hearsay. Just one side of the story.
- Status