How bad is it, really? (Financial thread)

Hammondo said:
That just doesn't add up.
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The club can offset spending in those areas against their losses. I would assume, the £50 million Carrington upgrade, money has gone into Old Trafford in the last three years well. There was £35 million that related to the sale of shares.

I think the big one was related to Covid losses though previously. I assume that financial year now no longer falls within this three year period.
 
I'm not advocating it, but how much would naming rights to Old Trafford be worth? Ideally, the owners get their collective hands in their pockets and clear the debt but the chances of that happening are slim to nil.
 
Monmouthshire Red said:
I'm not advocating it, but how much would naming rights to Old Trafford be worth? Ideally, the owners get their collective hands in their pockets and clear the debt but the chances of that happening are slim to nil.
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I imagine the value would be severely limited by the fact that everyone would continue to refer to the stadium as "Old Trafford".

Naming rights to a new stadium, on the other hand... That could be worth quite a bit.

A comparable example to look at is Barcelona. They were getting about €60m/year from Rakuten for just their shirt sponsorship. Now they're getting about €70m/year from Spotify for shirt sponsorship + stadium naming rights. This implies the naming rights on their own aren't worth much, as everyone continues to call the stadium the Camp Nou.
 
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Dan_F said:
The club can offset spending in those areas against their losses. I would assume, the £50 million Carrington upgrade, money has gone into Old Trafford in the last three years well. There was £35 million that related to the sale of shares.

I think the big one was related to Covid losses though previously. I assume that financial year now no longer falls within this three year period.
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Well 200m is a lot to make up for.
 
It's really bad. Years of disastrous recruitment has caught up with us. As some of us warned the "pay whatever it takes", "it's not your money, who cares" brigade.
 
Leftback99 said:
It's really bad. Years of disastrous recruitment has caught up with us. As some of us warned the "pay whatever it takes", "it's not your money, who cares" brigade.
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Yup. And going by the ticket price increases, turns out it was their money all along!
 
Hammondo said:
So we are 200m ish over what we can spend.
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Without the calculation of infra/ youth etc. We definitely need to shift some of the fat contracts we have left + pick up some fees but I imagine that number is nowhere near £200m when its properly worked out.
 
Hammondo said:
So we are 200m ish over what we can spend.
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Well no, because I’ve just listed a few things that have been reported in the past. I have no idea what else they can use. I’ve just looked and the Covid stuff will be accounted in this three year period. This will likely wipe out a lot of the £115 million loss in 21/22.

22/23 we only lost £28 million, which was the one season we were in the Champions League. It’s quite clear the cost cutting is because our whole model is financed for playing in the champions league. No Europe at all next season and it takes a massive hit without the matchday revenue as well. Which is why they’re likely to try and get through this season with loans and put any sales into next seasons accounting year.
 
The actual state of the club is just an embarrassment. You can tell the Glazer children inherited the asset because they are clueless businessmen. It would have been easier to be marginally successful with the club compared the mess they have created. So many bad decisions. Allowing Woodward and Arnold spend what they liked on players and wages has destroyed the club. Every fan could see what was happening, why couldn’t the owners?
 
Josep Dowling said:
The actual state of the club is just an embarrassment. You can tell the Glazer children inherited the asset because they are clueless businessmen. It would have been easier to be marginally successful with the club compared the mess they have created. So many bad decisions. Allowing Woodward and Arnold spend what they liked on players and wages has destroyed the club. Every fan could see what was happening, why couldn’t the owners?
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That's why it's so weird you see fans posting 'thanks Ole, ETH or Mou' etc. for players signed for silly fees. Managers don't give a hoot how much the club pays, they just want players and know they will likely only be around a few seasons. Woodward/Arnold sanctioning the track record of insane fees and wages is what will be the crippling thing for us - the club as a whole (despite not being where we would like to be) has basically always been CL or EL, won 5 cups in 10 years and rakes in an obscene amount of money given what we used to be. It's impressively shite to have been taken to the cleaners on fees for so long.
 
Yeah this is essentially why I was opposed to the Ratcliffe minority take over. It's essentially killed off any prospect of us getting rid of the Glazers and their crippling debt for the foreseeable.
 
No wonder Ratcliffe was quiet about the debt when he was bidding for the club.
 
Kaos said:
Yeah this is essentially why I was opposed to the Ratcliffe minority take over. It's essentially killed off any prospect of us getting rid of the Glazers and their crippling debt for the foreseeable.
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Your other option was just continuing as is? At least with Ineos the Glazers are diluted.
 
Can INEOS or Ratcliffe loan the money to the club to pay off the debt. They can then set the interest rate at a level the club can afford. Is that possible under the PSR rules?
 
Dan_F said:
Well no, because I’ve just listed a few things that have been reported in the past. I have no idea what else they can use. I’ve just looked and the Covid stuff will be accounted in this three year period. This will likely wipe out a lot of the £115 million loss in 21/22.

22/23 we only lost £28 million, which was the one season we were in the Champions League. It’s quite clear the cost cutting is because our whole model is financed for playing in the champions league. No Europe at all next season and it takes a massive hit without the matchday revenue as well. Which is why they’re likely to try and get through this season with loans and put any sales into next seasons accounting year.
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It could be tight.
 
Kaos said:
Yeah this is essentially why I was opposed to the Ratcliffe minority take over. It's essentially killed off any prospect of us getting rid of the Glazers and their crippling debt for the foreseeable.
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Pretty much had the same view, our new owners had to be people who weren’t restrained by crippling debts forced upon the club. Ratcliffe with his ego has maintained it.
 
If they knew it was going to be bad, why the heck did they give ETH 200mnwhen they were already looking for his replacement!
 
tomaldinho1 said:
Your other option was just continuing as is? At least with Ineos the Glazers are diluted.
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I mean my other ideal option was a complete takeover which would have at the very least have dented the debt, if not eradicated it completely. Not the Brexit Glazers we got who only allowed the OG Glazers keep their talons on the club.

Also INEOS diluting the Glazer shares hasn't really been of any benefit. Have they offered to pay off the debt in anyway? All we've gotten from them is austerity, not even the Glazers were penny pinching and raising ticket prices like Jimbo is.
 
Kaos said:
I mean my other ideal option was a complete takeover which would have at the very least have dented the debt, if not eradicated it completely. Not the Brexit Glazers we got who only allowed the OG Glazers keep their talons on the club.
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Yes but that wasn't on the table. I would have loved to buy the club myself now I think of it.
 
Monmouthshire Red said:
I'm not advocating it, but how much would naming rights to Old Trafford be worth? Ideally, the owners get their collective hands in their pockets and clear the debt but the chances of that happening are slim to nil.
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We should just do a one off 3 yr naming rights deal, clear off some debts, buy in some players and then drop it.
 
Kaos said:
I mean my other ideal option was a complete takeover which would have at the very least have dented the debt, if not eradicated it completely. Not the Brexit Glazers we got who only allowed the OG Glazers keep their talons on the club.

Also INEOS diluting the Glazer shares hasn't really been of any benefit. Have they offered to pay off the debt in anyway? All we've gotten from them is austerity, not even the Glazers were penny pinching and raising ticket prices like Jimbo is.
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Would not make any sense for them to pay off any debt. It would be giving money to the other share holders.
 
Hammondo said:
Would not make any sense for them to pay off any debt. It would be giving money to the other share holders.
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Exactly, so in essence a Ratcliffe minority ownership is essentially a prolongation of the status quo just to massage his own ego and vanity of owning a big football club. Except now we've inherited his nasty billionaire tendencies too.
 
This is one of the most profitable sports organizations in the world. It's beyond bizarre that United can be in financial trouble. I mean, I know it's a combination of things from parasitic owners to years of poor results, but it just seems like it shouldn't be possible. It's the kind of thing that you imagine couldn't take place. It's like hearing that Amazon is struggling to pay the electricity bill on its warehouses. It seems like something that couldn't possibly be true.

MUFC has the highest operating income of any club in the world. That's the sum that's left after subtracting expenses from revenue. It is, in essence, what the club actually pulls in at the bottom line. And it's literally the highest in the entire world. No other club has a higher operating income. How the feck is it possible to be in dire financial straits? I know there's the debt and all that, but it just seems like that shouldn't be enough to practically sink what ought to be the steadiest ship in the world.

Barcelona's operating income for 2024 was -145m ($), so you can understand how they'd have problems. Real Madrid made 76m. United's was 187m. The very highest of all clubs. In this particular context, nobody performs better financially. And it was a record year, so it's the best financial performance any football club has ever had. Just what is in the rules if there's a risk of punishment for financial shortcomings after the most profitable year that any club has ever had?
 
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tomaldinho1 said:
Yes but that wasn't on the table. I would have loved to buy the club myself now I think of it.
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You happen to think the Qatar bid wasn't legitimate? I think it very much was, only that it didn't match the Glazers overly inflated valuation, and of course they'd preferably prefer the Ratcliffe minority route where they'd no longer have to sell, keep their majority stake all while using INEOS as a PR lightning rod.
 
Kaos said:
Exactly, so in essence a Ratcliffe minority ownership is essentially a prolongation of the status quo just to massage his own ego and vanity of owning a big football club. Except now we've inherited his nasty billionaire tendencies too.
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But the football decisions have improved.
 
Hammondo said:
But the football decisions have improved.
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Still early days before we can make that conclusion. Yes we've finally hired (and fired) footballing personnel, and we now have the supposed best in class people in the C suite, but unless that's translates to actual success it all a bit moot. Their decision making in regards to Ashworth, keeping Ten Hag as well as sanctioning some bizarre signings like Zirkzee has hardly inspired confidence this early into their tenure.
 
Kaos said:
You happen to think the Qatar bid wasn't legitimate? I think it very much was, only that it didn't match the Glazers overly inflated valuation, and of course they'd preferably prefer the Ratcliffe minority route where they'd no longer have to sell, keep their majority stake all while using INEOS as a PR lightning rod.
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The Ratcliffe takeover was a disaster in my opinion on the money side. He only bought a stake in the club.

If a full takeover had happened, off the top of my head from what I know of company acquisitions, the new owner, for arguments sake say Sheik Jassim, could have a) had the debt deducted off the sale price, wiping it out or b) assumed the debt(probably a bad option) or c) paid off the debt before the deal closes or d) refinanced the debt with favourable lenders if possible. Probably more options and I’m not an authority on how those options fit against FFP, PSR etc.

What we have in my estimation is the worst scenario - the debt stayed on the books as is, and a minority stakeholder purchased a percentage of shares, so the £1.5bn or whatever he paid just went in the back pockets of the Glazers. And they are still probably drawing lots of money out of the club.

It goes under the radar that the Ineos involvement hasn't really improved the financial situation at the club.
 
Kaos said:
You happen to think the Qatar bid wasn't legitimate? I think it very much was, only that it didn't match the Glazers overly inflated valuation, and of course they'd preferably prefer the Ratcliffe minority route where they'd no longer have to sell, keep their majority stake all while using INEOS as a PR lightning rod.
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We don't even have legitimate proof that Sheikh Jassim exists beyond a generic publicity shot. The Qatar bid was conducted almost entirely over Twitter and they never came close to actually proving they were serious bidders.
 
Josep Dowling said:
Can INEOS or Ratcliffe loan the money to the club to pay off the debt. They can then set the interest rate at a level the club can afford. Is that possible under the PSR rules?
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I think there will eventually be some sort of internal debt financing agreement between INEOS and the club for the portion of the debt that's due for refinancing in 2027. Interest rates in external debt markets will be way too high.
 
I doubted that they would sack Ten Hag and bring in an expensive placement mid season due to the cost. We're the seeing the consequences now in stories of potential sales.
 
Kaos said:
Still early days before we can make that conclusion. Yes we've finally hired (and fired) footballing personnel, and we now have the supposed best in class people in the C suite, but unless that's translates to actual success it all a bit moot. Their decision making in regards to Ashworth, keeping Ten Hag as well as sanctioning some bizarre signings like Zirkzee has hardly inspired confidence this early into their tenure.
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Urgate has been great, getting rid of players sounds like it's going in the right direction. Everything zirkzee, didn't cost much, isn't on crazy wages so we can sell.
 
Kaos said:
You happen to think the Qatar bid wasn't legitimate? I think it very much was, only that it didn't match the Glazers overly inflated valuation, and of course they'd preferably prefer the Ratcliffe minority route where they'd no longer have to sell, keep their majority stake all while using INEOS as a PR lightning rod.
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After the SEC news, the Qatar team's apparent anger to prove they were legit and sudden silence I think it's fair to say they were never serious. Jassim's dad got a $9b loan on a whim from UBS during the period as well, these guys have access to money if they want it from any international bank but they never did anything of the sort. It was always just that they had put forward x amount as an offer. Ratcliffe was the sole option that actually proved his funds, the Qatar bid might as well have been me and you splashing out on some nice suits and telling the Glazers that 'we're good for it'.
 
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