The Times: Glazers could sell share of future TV income

[userman]

Oh no, we’re turning into Barca 2.0.

 

[Redjazz]

Is this materially different from taking out a loan to redo the stadium?

Well it would be like an exotic loan (but not classified as such) where you receive a fixed amount but the repayments each year are contingent on performance. The true cost of these types of loans are only known at the end, and as there is uncertainty for both the lender and borrower, the cost would typically be much higher than your conventional bank loan.

 

[Oranges038]

In the words of the almighty Lemmy.

I don't belever word.

 

[Red Company]

The glazers have lost their minds

 

[Infestissumam]

speculative clickbait BS. Not that I would put anything past those leeches, but this article is nothing more than "Barcelona did this, so United could at one point too", without any indication that they might actually consider doing it.

 

[CloneMC16]

Now these wankers want to pull levers. We need them out before they ruin this club even more than they already have.

 

[devilish]

A loan debt would be on the club surely?

Let me give you an example of what I am saying.

Imagine that I have a company that produces pens. Its worth 20m, it produces 100,000 pens and its sells them in the UK at 1 pound each. I need money and I have a choice to either take a 5m loan or sell 20% of my profits to a PE for 20 years.

Now imagine that you want to buy my company. Your business model is quite simple. You're aiming that you can produce more pens at a cheaper rate + you're interested to sell them in the US and the EU. The 5m loan you can deal with especially if you manage to improve production and to increase profit significantly. The latter is a pain in the arse though as it will eat into every growth effort you make.

 

[largelyworried]

Let me give you an example of what I am saying.

Imagine that I have a company that produces pens. Its worth 20m, it produces 100,000 pens and its sells them in the UK at 1 pound each. I need money and I have a choice to either take a 5m loan or sell 20% of my profits to a PE for 20 years.

Now imagine that you want to buy my company. Your business model is quite simple. You're aiming that you can produce more pens at a cheaper rate + you're interested to sell them in the US and the EU. The 5m loan you can deal with especially if you manage to improve production and to increase profit significantly. The latter is a pain in the arse though as it will eat into every growth effort you make.

So what you're saying is that the repayments are variable if linked to TV rights but fixed if you get a loan? This isn't necessarily true in either case.

With TV rights it depends on your agreement. You could sell a stake in your current TV deal, but the decision about what happens if your TV revenue goes up would be in the T&Cs. It could say that it continues to be a flat percentage of total income come what may, it could say that it gets capped at a certain point or it could say that it's based on the current deal and doesn't apply to future deals. That would be in the negotiation.

You also seem to be implying that a loan is fixed for repayments, but again, it may not be. That will depend on the interest rate agreed.

Either way the practical upshot is the same - cash now in exchange for committed expenditure in the future. Figuring out which is better and which is worse would be down to the calculation of its terms and an assessment of risk, but I don't see a material difference in either case.

 

[Ole'sattheWheel]

speculative clickbait BS. Not that I would put anything past those leeches, but this article is nothing more than "Barcelona did this, so United could at one point too", without any indication that they might actually consider doing it.

This exactly. Stop believing everything the fecking media report.
Bigger leeches than the Glazers themselves.

 

[devilish]

So what you're saying is that the repayments are variable if linked to TV rights but fixed if you get a loan? This isn't necessarily true in either case.

With TV rights it depends on your agreement. You could sell a stake in your current TV deal, but the decision about what happens if your TV revenue goes up would be in the T&Cs. It could say that it continues to be a flat percentage of total income come what may, it could say that it gets capped at a certain point or it could say that it's based on the current deal and doesn't apply to future deals. That would be in the negotiation.

You also seem to be implying that a loan is fixed for repayments, but again, it may not be. That will depend on the interest rate agreed.

Either way the practical upshot is the same - cash now in exchange for committed expenditure in the future. Figuring out which is better and which is worse would be down to the calculation of its terms and an assessment of risk, but I don't see a material difference in either case.

Look mate these private equities aren't stupid. If they lend us money then they will squeeze every drop of blood out of it. We should push the club hard so we get new owners in especially now that there's a decent prospective buyer who would treat the club fair.

 

[largelyworried]

Look mate these private equities aren't stupid. If they lend us money then they will squeeze every drop of blood out of it. We should push the club hard so we get new owners in especially now that there's a decent prospective buyer who would treat the club fair.

Could be, but that wasn't my original question.

 

[stw2022]

Selling off minority of stake with additional loans seems more likely.

Anyone thought it a coincidence that we're reading about so many rumoured takeovers, speculation that usually increases the value of the asset rumoured to be bought, just at the time the Glazers want to sell shares to raise money?

 

[Lecland07]

Why don't people ever read?

Complete nonsense article.

 

[Lee565]

This is why we need to start putting pressure on the premier league and gov to stop such a reality happening

 

[ilrm]

Dear United fans, some concerning news on your potential new part-owners:

Garment workers in Nicaragua and Honduras went on strike to fight back against layoffs due to factory closures. These factories are owned by Tegra, which is owned by the private equity firm Apollo Global Management.
“They claim they are closing because of a financial and technical reorganization but what they want is to move production to El Salvador so they can save $5 million in social benefits,” union leader Pedro Ortega told SJ.
Nicaraguan and Honduran garment workers learned from Tegra’s past treatment of laid off workers during an earlier consolidation process and the withdrawal of Nike’s apparel production from Indonesia. Indonesian workers faced coercion to accept less than full compensation, and had to struggle for months to get legally-owed severance.

In a Tuesday ruling that denied Apollo’s motion for summary judgment and sets up a likely trial, US judge Timothy Corrigan ruled that a jury could reasonably find that Apollo fraudulently concealed a stock incentive plan from fired Ceva employees as it wiped out their equity stakes in the bankruptcy.

The celebration was short-lived. Just over a year after the plant’s grand reopening, Hostess shut it down. The fallout was swift. All 415 employees were fired, some for the second time in two years. Schiller Park lost one of its largest employers, creating a ripple effect through this tiny working-class suburb of Chicago.
A year after the layoffs at the Hostess plant in Illinois, Apollo and Metropoulos arranged for the company to borrow about $1.3 billion. Apollo and Metropoulos used most of that sum to pay themselves, and their investors, an early dividend on their investment.
Former employees recalled grueling shifts when temperatures inside the plant neared 110 degrees. The workers were given Gatorade to rehydrate.

Apollo cut the wages for most of the production and maintenance workers at its Waterford plant. The National Labor Relations Board investigated and tentatively concluded that the company had violated the contract. But with other locals rallying behind a new contract offer, hundreds of the production workers were forced to accept drastically reduced pay.
In the months after the contract vote, the stress level at the plant was through the roof, said one worker, who, like his colleagues, spoke on condition of anonymity because he feared retaliation from company officials. His doctor treats lots of Momentive workers, he said, “and she says Xanax should be in our drinking water.”
The new contract, they said, has brought more responsibility for less pay. They alleged that new hires are asked to perform dangerous tasks with inadequate training. And longtime workers are taking second jobs to make up for lost pay, several men said.
“This is suicidal,” another man said.

Perhaps most concerning to United fans:

But those returns may have come at a cost to the companies Apollo owns. The lifeblood of private equity firms is cheap debt: They use it for their purchases, and they often pile it onto their holdings to pay for special dividends to themselves.
Apollo appears to have embraced that approach wholeheartedly. In a February report, Moody’s found that from 2002 to September 2006, the firm took out dividends in more than a third of its 22 purchases within a year. Moody’s downgraded the debt of 45 percent of those deals, in part because of the debt load on those companies.
Now debt is weighing on Linens ‘n Things, the nation’s second-largest housewares retailer, behind Bed, Bath & Beyond. Apollo and two partners bought the company late in 2005, at the beginning of the recent buyout boom.
“Even with the housing market going strong, it was struggling with the top line,” Tiffany Co, a retail debt analyst with Fitch Ratings, told The Times. She added that several vendors have already stopped shipping merchandise to Linens ‘n Things, alarmed by the possibility of its going under.

I've taken bits from various articles. The full Sources are below:
https://pestakeholder.org/news/garm...s-from-apollo-managements-tegra-amid-layoffs/
https://nypost.com/2021/06/29/apoll...g-in-closely-watched-dispute-with-executives/
https://www.nytimes.com/2016/12/10/...-twinkie-made-the-super-rich-even-richer.html
https://www.nbcnews.com/news/invest...ers-get-lesson-modern-economics-flna1c7750361
https://archive.nytimes.com/dealboo...es-to-keep-debt-from-sinking-linens-n-things/

 

[TheLord]

Barca taught the world how "levers" are activated in football; bloody parasite owners will leach many clubs now.

 

[hellhunter]

Barca taught the world how "levers" are activated in football; bloody parasite owners will leach many clubs now.

It would be ironic if a fan owned club, apparently the beacon of ownership model, introduced the leeches of the footballing world to levers

 

[mitchmouse]

Get these vampires out now. if the board had any guts (and actually did some work), they should threaten to resign

 

[Bastian]