You know this isn’t true and Arnold never said that. We said, after a heavy transfer outlay, we’d be more restricted because we have to be aware of FFP. Same as every single club , bar City who don’t care and Everton who look like they broke it.
Man Utd almost £1bn in debt
- Thread starter Compton22
- Start date
Which is why higher interest rates are forcing them to sell. You can thank Putin for getting the Glazers out.
Yet City are the problem according to the Prem and Uefa
I wouldn't say it is worrying, to be honest. There is $402m in expenses, in relation to amortisation of intangible assets, included in the retained earnings from the last three years alone.
I know people get upset about borrowing, but you can see that $100m was raised to offset cash-flow issues. You can see that the current trade receivables (due within the current year) have grown by $66m since June 22. Receivable days have risen from 111 days to 161 days from last year, which means the club is getting paid 50 days later. This explains the need to raise finances to cover the cash flow deficit.
We're really quite passive as a fanbase and it is frustrating at times. We should have aggressively hounded these parasites out ages ago for the state they've left this great club in, just to line their own pockets.
Yeah, I feel this is a case of the Mandela effect going on here.
Arnold stated that the money was there for the new manager and transfers, but that we'd burned through cash and had to be more restrictive.
I guess what I was getting at is that equity decreased by 150M to 100M over the course of 2022. Another year like this, and the club has negative owners' equity. I'm not an accountant, but have to think that's generally not seen as good regardless of how one gets there.
Think it shows are issues arn’t just the Glazers. Yes the money they take out of the club are a huge contribution to the problem, but our spending in the post Fergie era is not sustainable.
I know fans constantly want more more more, but the club is not a bottomless pit of money. We need to spend better.
I know fans constantly want more more more, but the club is not a bottomless pit of money. We need to spend better.
How did you come up with the conclusion that it isnt just the Glazers?
I fully disagree with that opinion on the glazers. with respects to spending better, I agree we have wasted alot of money on transfers.
The 1bn debt is solely on the Glazers and here is why:
1. They bought the club for circa 750m and 500m of it was leveraged and put on Manutd, a debt free club at the time they bought it.
2. 18 years later that debt is up to 550m with Manchester United financing the debt, say you calculate 3% interest which is £15m a year servicing the debt. That is £270m spent by Manchester United to service the debt for the Glazers
3. 11m a year dividend payment - which even if we do 10 years is £1bn out the club.
That is a total of £1.75bn spent / debt SOLELY down to Glazers.
We took out a 200m credit facility to get us through covid, that is the clubs debt because of all the issues every club had during covid, nothing to do with how we spent the money.
Yet, with all the financial difficulties the glazers have put us in, we still manage to pay the £100m transfer fees and 500k a week wage to players.
Without the Glazers we would be a different beast altogether.
Interest repayments and dividends over their ownership make up over 900 million pounds by itself. United is enough of a juggernaut that it could handle financially either leeching owners or the atrocious management we had over last decade, just not both.
Of course creditors, sorry - english is just my 2nd language, so mixed the two terms up. However, for the rest, have you read my post? I explicitly said they won't "die" unless they are mismanaged, so of course they can go under. Otherwise they could obviously just do what they want if there is no chance of failure.
For the interest part - this is exactly what i said. The total amount of debt doesn't really matter that much to companies/states, but the interest rate and total interest that needs to be paid matters. Although interest rates increased heavily, this doesn't need to be a problem for companies/states as they have a lot of long term debts with interest rates way different to the current interest rate for different types of (short/medium/long term) debt.
I don't even want to say that "Utd are fine" or "Glazers are doing a fine job" regarding this. But just looking at the total debt and then concluding from it is wrong. It needs to be looked at in detail and then conclusions can be made by experts of the field. And with all due respect, this is not something that "normal" people (me included) can do, as multi billion dollar enterprises and their finances, equity/debt structure, ..., are highly complex. There is no general answer like "this debt/equity-ratio is optimal", "over amount x of debt is bad", ...
I'm glad someone else posted this. As if it's not totally normal to owe money on transfer fees. It's like when tabloids add wages to a transfer fee we've paid in order to make it sound miles larger than it is.
Nonetheless: feck the glazers
Had the Glazers not appointed their banker mate Woodward to be in charge of transfers and had instead employed footballing people to make football decisions then we would've spent better.
Also, had they invested any of their own money on the club (instead of taking dividends out for themselves and putting nothing back in return) then maybe we'd be less worried about not having a "bottomless pit of money".
I did. Companies can go under while being mismanaged both with and without debt, oftentimes it's a function of hindsight to claim that some entity was mismanaged. In our own case for all the money that we pissed up the wall on expensive contract renewals for mediocre players and transfers the past decade, there was a rationale at the time for doing what we did which even many on here didn't argue with. It even includes whom we hired as managers which only looks worse when looking back. So, the corollary is companies with debt can go under even while they were not really mismanaged and their debt at some point becomes a problem because servicing it eats into their cashflow which is why listed companies have to explicitly mention their liabilities and how they are being serviced to their shareholders.
Interest being paid is directly correlated with the total debt you owe, no? Ignoring macroeconomic realities which govern credit cycles, that interest becomes a problem only when your operations begin to suffer for some unforeseen reason yet those obligations have to be met which is why even nations have fiscal deficit targets when they make budgets and don't borrow/print money willy nilly. Of course, if interest rates go up in general, then getting credit becomes more expensive and for your operational costs you will need to dip into your cash reserves instead of being able to borrow on the cheap and operate in a tax efficient manner or even refinance at a better rate. That happens even when you have a mortgage on a floating interest rate which ensures you don't pay the same amount every month of the loan period.
In the Glazer's and United's case, the debt was unlikely to ever really threaten our existence as a top club unless we really stuffed it up because of healthy cashflows and being a big commercial draw but the main criticism and concern was always that that debt was not incurred for building any kind of infrastructure like in Arsenal and Spurs' case which would have made it palatable meaning we are now left with needing to make pretty large overhauls which a new owner will inevitably have to undertake and that those interest payments meant that a lot of money didn't end up going towards the team which could have benefitted from it. Other than that, the only argument in favor of their ownership is that they increased commercial revenues but then whether that increase justifies the cost to the club in the form of the dividends they keep taking out is up for debate since we have actually spent a lot of money but just not well enough. In that sense, assessing the consequences of their decisions and the liabilities that they saddled the club with is not some rocket science which only some experts can tell you. Basic knowledge of finance such as is enough to invest in the equity market and understand every budget which your country makes along with some common sense is quite enough as it is targeted at the wider population that are not bean counters poring over spreadsheets and graphs that make your head hurt for a living.
For your last line there actually does exist research from economists which cite exact numbers on what debt-to-GDP ratio begins to have a detrimental effect on the economy and also how high debt levels - specifically how much in relation to their revenue - affect corporations which you can go through, even if there isn't unanimous agreement on it. It's stating the obvious to say that debt in and of itself is not bad but also quite obvious to observe why it is not necessarily ideal or proclaim that it will never be a problem for any entity as there is a little more to it than that.
I thought this was new debt. They threw in transfer debt in there to make the headline stick. Still a lot mind you.
Was just about to call that out as BS. Thanks for doing it for me.
Huh?
You understand why United took on this debt originally right?
There were sections of the fanbase that consistently shouted down those protesting and calling for boycotts etc..., even more that just got 'fed up with people moaning'. The folk who went to FCUM were frequently belittled and ridiculed. There's a bit of history repeating itself at the moment.
Ultimately it was down to the PL loophole and a feckin horse.
It's ok we have nothing to pay for the first 3 years as long the balance is paid in full by the date stated above.