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Manchester United Financial Situation.

  • 10-04-2010 07:43PM
    #1
    Dub13
    Moderators, Recreation & Hobbies Moderators Posts: 21,250 Mod ✭✭✭✭


    I have had a request for a thread on the Utd Financial Situation,this topic certainly merits its own thread and it will also save the super thread from going around in one big circle.

    So fire away lads and try and keep it in here.


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Comments

  • #2
    Spud83
    Closed Accounts Posts: 9,608 ✭✭✭Spud83


    in a nut shell
    doomed.jpg


  • #3
    The Muppet
    Registered Users, Registered Users 2 Posts: 14,006 ✭✭✭✭The Muppet


    Could I suggest that we have a post at the top of this one for links to relevent important club statements, articles, Financial statments, accounts etc that can be regularly updated . That should keep the discussion tidy and all the important information close at hand. Dub 13s post seems ideal.

    I think the default period of time users that users are allowed to edit posts means a mod will have to keep this updated Ithink, obviously with the users supplying the links.


  • #4
    Dub13
    Moderators, Recreation & Hobbies Moderators Posts: 21,250 Mod ✭✭✭✭Dub13


    The Muppet wrote: »
    Could I suggest that we have a post at the top of this one for links to relevent important club statements, articles, Financial statments, accounts etc that can be regularly updated . That should keep the discussion tidy and all the important information close at hand. Dub 13s post seems ideal.

    I think the default period of time users that users are allowed to edit posts means a mod will have to keep this updated Ithink, obviously with the users supplying the links.

    PM me anything you want and I will stick it up.


  • #5
    The Muppet
    Registered Users, Registered Users 2 Posts: 14,006 ✭✭✭✭The Muppet


    Cheers Dub13

    As this has been a bone on contention on the other thread I'll start the ball rolling with this. It's from the end of last year , we have spent £16 million since then, The rest should still be there for investment on the right players.
    Fergie says he can spend 80 million pounds in transfer market
    London: Manchester United manager Sir Alex Ferguson has said the 80 million pounds that the club received from the sale of Cristiano Ronaldo is available for investment, and he can spend it if he wants to.

    "The Ronaldo money is there if I want to use it. The money was there in the summer if I had wanted to use it. There is no bother. That is a fact. But, I didn't think there was any value in the market then, and I don't see any value now. So, I'm not thinking of buying anyone in January. I'm happy with what I have brought to the club," The Daily Express quoted Ferguson, as saying.
    "Last summer's deals did inflate the market. It was the silly season, with the prices paid for players. The prices we were quoted for players were not reasonable, in my opinion, and that's why I didn't do anything," he added.
    Ferguson further said the amount quoted by Bayern Munich for Franck Ribery (60 million pounds), Valencia for David Villa (50 million pounds) and Wolfsburg for Edin Dzeko (30 million pounds) does not represent value for money, and he will not buy when the window opens next month.
    "There is a danger that this situation could continue for a while. There is the World Cup coming up. A young player could emerge in the tournament, and there could be an escalation in his value," Ferguson said.
    "But, it doesn't change my view that we must keep looking for value. I could spend the money, but I think value is important," he added.

    http://article.wn.com/view/2009/12/12/Fergie_says_he_can_spend_80_million_pounds_in_transfer_marke/


    Ferguson further said the amount quoted by Bayern Munich for Franck Ribery (60 million pounds), Valencia for David Villa (50 million pounds) and Wolfsburg for Edin Dzeko (30 million pounds) does not represent value for money and he will not buy when the window opens next month.

    “There is a danger that this situation could continue for a while. There is the World Cup coming up. A young player could emerge in the tournament and there could be an escalation in his value,” Ferguson said.

    “But, it doesn’t change my view that we must keep looking for value. I could spend the money, but I think value is important,” he added. (ANI)


    http://blog.taragana.com/sports/2009/12/12/fergie-says-he-can-spend-80-million-pounds-in-transfer-market-if-he-wants-to-55508/


    Manchester United chief executive David Gill has hinted at more signings by the club this summer.


  • #6
    MagicMarker
    Banned (with Prison Access) Posts: 32,865 ✭✭✭✭MagicMarker


    Thank christ I don't have to read all this bollocks in the UTD thread anymore.

    *unsubscribes*


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  • #7
    Mitch Connor
    Registered Users, Registered Users 2 Posts: 48,194 ✭✭✭✭Mitch Connor


    whatever Fergie and Gill say about the 80million Ronaldo money being there, the clubs financial accounts, shown in all their glory as part of the Bond issue, shows that United have NO cash available in the bank. Whatever money is spent (net) in the summer, will come from a loan or the bank overdraft facility mentioned in the bond prospectus.

    So, I believe there is money available for Fergie to spend in the summer, but it is not (from what I have seen in the accounts and explanations of the accounts) the Ronaldo money nor is it money that is 'surplus' or similar.

    What annoys me about this entire situation is that United are making more money now than they ever have before - the club itself is making a great amount of money but it is getting swollowed hole by the interest repayments to the banks/PIKs/Bonds, "consultancy fees" to the Glazers and interest fee loans to the Glazers. They are sucking every penny they can from the club.

    Sure United only managed to make an overall profit of something like 30million in the last financial year despite selling Ronaldo for 80million and getting 40million of the AON deal payed to the accounts up front.


  • #8
    Mitch Connor
    Registered Users, Registered Users 2 Posts: 48,194 ✭✭✭✭Mitch Connor


    MagicMarker wrote: »
    *unsubscribes*

    Why did you subscribe in the first place?


  • #9
    ShoulderChip
    Registered Users, Registered Users 2 Posts: 3,875 ✭✭✭ShoulderChip


    Mitch Connor wrote: »
    Why did you subscribe in the first place?

    probably like me uses the automatic subscribe feature


  • #10
    Pro. F
    Registered Users, Registered Users 2 Posts: 12,219 ✭✭✭✭Pro. F


    It's pretty much the same for me as what Mitch has said above.

    I don't know if Ferguson is lying or telling a half truth or has been misled when he talks about having money available for transfers. However, I do know that the financial statement shows that there is no cash available, only an over-draft facility (ie even more debt). So if/when we do buy players we will be adding to the already massive debts on the club.


    For anybody who is interested, here is a post with links to analysis of the situation in articles from the Financial Times' news blog.
    Pro. F wrote: »
    Information on the bond issue, the financial structures and the credit facility
    here

    And
    more analysis of the structures which transfer money from the club to the Glazers' holding company(where the PIKs are)

    And some additional information on the PIKs and the urgency of repaying them.


  • #11
    timetogetfit
    Closed Accounts Posts: 1,177 ✭✭✭timetogetfit


    Ferguson saying that there is no value in the transfer market really is annoying,the prices are set by the clubs willing to pay the prices so if Real Madrid ,Man City and Chelsea are willing to pay the current market prices then thats where the prices will stay and the others can either try and accept that or get left behind.

    Besides it makes little sense in paying a little less for inferior players when for a little bit extra for top top players and thats where the real value lies

    Paying 35 to 40 million for David Villa who is a world class player probably would be a bad move now that he is 29 but it would have proved more valuable to pay the extra 10m for him after the euros instead of going for berbatov


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  • #12
    Mr Alan
    Registered Users, Registered Users 2 Posts: 29,372 ✭✭✭✭Mr Alan


    Mitch and Pro. F own this thread by the way.


  • #13
    Boskowski
    Closed Accounts Posts: 5,361 ✭✭✭Boskowski


    As I'm taking abut of an interst in utd I'd like to say it's total rubbish that so much is made of the fact that utd are not interested to buy villa for fourty million. They would be off their heads to spend that money on him. I don't like the man one bit but he's a great manager and he knows exactly what he's talking about. Only for the fvcked up ownership situation I'd say trust the man and let there be no worries. But I think there us a situation at utd that even the great man I don't like may not be able to overcome. I hope it's not going to kill off this club in the long run. They've been too great a rival over the years.


  • #14
    Vanbis
    Closed Accounts Posts: 3,724 ✭✭✭Vanbis


    The Red knights know that Glazers wont sell the club unless they get a offer they just can't refuse. I'm no financial expert but why don't the Red knights offer to invest in the club helping to reduce the current debt and also provide SAF with a war chest to invest in 4/5 top players this summer. Long term the Red knights will eventually buy the club from the Glazers in the next five to ten years and with the investment it will leave the club in a sound financial state when they did complete a takeover and get the fans back on side.

    I know its easier said then done but surley a good idea?


  • #15
    Spud83
    Closed Accounts Posts: 9,608 ✭✭✭Spud83


    Because that would help the Glaziers too much. If they invested in the club let's say 40% and helped clear some of the debt then the remaining 60% would be much more expensive. Therefore making the the glaziers more money, and costing the red knights much more.

    The red knights are business people at the end if the day, there is no point thinking of them as anything else.

    Also there would be no guarantee of the Glaziers selling a remaining percentage to them.

    However all that is important, but possible more important is that the Red Knights want fan support for any takeover. It's why they approached MUST. Getting into bed with the Glaziers so to speak would lose them most if not all fan support.


  • #16
    Vanbis
    Closed Accounts Posts: 3,724 ✭✭✭Vanbis


    Spud83 wrote: »
    Getting into bed with the Glaziers so to speak would lose them most if not all fan support.

    I understand that but at the end of day the club is most important and if it helps with a future take over and help reduce the current debt while offering significant financial backing for SAF then surley its a win win situation for all.

    Red knights may well make a bid in the summer when the Glazers refuse and reject it what will the red knights do after that? If these so called Manutd fans really want to help the club and secure the future and ease the debts surley its an option they and glazers should consider.


  • #17
    gosplan
    Closed Accounts Posts: 9,828 ✭✭✭gosplan


    Spud83 wrote: »
    The red knights are business people at the end if the day, there is no point thinking of them as anything else.

    This.

    If a businessperson comes in they're going to treat it like a business.

    Also, I'd be very suspicious if they decided to call themselves 'the red knights'.


  • #18
    Spud83
    Closed Accounts Posts: 9,608 ✭✭✭Spud83


    Vanbis wrote: »
    I understand that but at the end of day the club is most important and if it helps with a future take over and help reduce the current debt while offering significant financial backing for SAF then surley its a win win situation for all.

    Red knights may well make a bid in the summer when the Glazers refuse and reject it what will the red knights do after that? If these so called Manutd fans really want to help the club and secure the future and ease the debts surley its an option they and glazers should consider.

    Not really as the Glaziers would still have majority control so they would still be the ones calling the shots on finances.

    Also as I said I don't think it would help with a future takeover. If it was on the stock exchange then it might, but helping the Glaziers, which investing in the club would do, will just drive the price up, and may make a takeover unattainable. The size of the debt is the one thing that might make the Glaziers sell. If they can't see themselves getting out of it, they might let someone else bail them out.

    Now calling them fans is very premature. We don't know exactly who they are, who is involved, and what their plan is. What they will do if the Glaziers reject their bid I don't know, I don't know if they are even going to be able to put a workable bid together.

    They will however be business men, and they will know that doing a half way deal with the Glaziers will be bad business.

    Regardless of anything else that may happen, part ownership between the red knights and the glaziers won't.

    BTW the red knights I believe is a media term that they seem to have accepted. Considering there is no official company set up by them, its easier than saying the group of business men interested in buying united.


  • #19
    Paleface
    Registered Users, Registered Users 2 Posts: 1,971 ✭✭✭Paleface


    The thing that puzzles me about the situation is why on earth would the Glazers buy United, the biggest sport franchise in the world, and then run it into the ground??

    It just doesn't make sense.

    Maybe its that football is living in dreamland at the moment. The money clubs spend on players is totally unrealistic. The governing bodies are supposedly trying to correct this and when they do transfer fees should go down.

    The Glazers know this and could be holding out when United would be in prime position to take advantage of such a scenario with their large annual turnover.


  • #20
    The Muppet
    Registered Users, Registered Users 2 Posts: 14,006 ✭✭✭✭The Muppet


    Vanbis wrote: »
    I understand that but at the end of day the club is most important and if it helps with a future take over and help reduce the current debt while offering significant financial backing for SAF then surley its a win win situation for all.

    Red knights may well make a bid in the summer when the Glazers refuse and reject it what will the red knights do after that? If these so called Manutd fans really want to help the club and secure the future and ease the debts surley its an option they and glazers should consider.

    That's fans speak, from the owners point of view profit is most important, maximising their investment, The sceptic in me suspects that some sections of the red knights, (the business men) would have the same agenda, Other sectors MUST formerly Shareholders United being ordinary fans would have the interest of the club at heart.


  • #21
    Spud83
    Closed Accounts Posts: 9,608 ✭✭✭Spud83


    Paleface wrote: »
    The thing that puzzles me about the situation is why on earth would the Glazers buy United, the biggest sport franchise in the world, and then run it into the ground??

    It just doesn't make sense.

    Maybe its that football is living in dreamland at the moment. The money clubs spend on players is totally unrealistic. The governing bodies are supposedly trying to correct this and when they do transfer fees should go down.

    The Glazers know this and could be holding out when United would be in prime position to take advantage of such a scenario with their large annual turnover.

    Don't be fooled buying United didn't cost the Glaziers much if anything at all, and they have been taking money out of it from day one. The bought United to make a profit, if they sold in the summer they will make a profit, if they wait 5, 10 years the could make a bigger profit. Once the club is breaking even, or making a small profit as the situation is now and has been since they arrived they don't care. Problem is we needed the Ronaldo money and half our shirt deal to make a profit last year, where that money is coming from this year I dunno.


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  • #22
    The Muppet
    Registered Users, Registered Users 2 Posts: 14,006 ✭✭✭✭The Muppet


    Paleface wrote: »
    The thing that puzzles me about the situation is why on earth would the Glazers buy United, the biggest sport franchise in the world, and then run it into the ground??

    It just doesn't make sense.

    Maybe its that football is living in dreamland at the moment. The money clubs spend on players is totally unrealistic. The governing bodies are supposedly trying to correct this and when they do transfer fees should go down.

    The Glazers know this and could be holding out when United would be in prime position to take advantage of such a scenario with their large annual turnover.

    The didn't buy it to run it into the ground and TBH I don't believe they are running it into the groud. They bought it because they saw an opportunity to make a lot of money by being Succesful and building the brand Globally. Like most other people they didn't see the recession on the horizon and that recession must have had some negative impact on their business plan and their ability to increase revenue.

    United is still a viable business and anything I have read on the finance indicates that the clubs debt can be serviced by revenue the club generates. Some see the Piks as a major issue but they are not secured against the Club they are Glazer debt and they just might force/encourage them to sell if they got the right offer.


  • #23
    Paleface
    Registered Users, Registered Users 2 Posts: 1,971 ✭✭✭Paleface


    Spud83 wrote: »
    Don't be fooled buying United didn't cost the Glaziers much if anything at all, and they have been taking money out of it from day one. The bought United to make a profit, if they sold in the summer they will make a profit, if they wait 5, 10 years the could make a bigger profit. Once the club is breaking even, or making a small profit as the situation is now and has been since they arrived they don't care. Problem is we needed the Ronaldo money and half our shirt deal to make a profit last year, where that money is coming from this year I dunno.

    You are contradicting yourself in that reply. If the Glazers bought United to make money but it isn't making a profit then what sort of money making future does it have?


  • #24
    Paleface
    Registered Users, Registered Users 2 Posts: 1,971 ✭✭✭Paleface


    The Muppet wrote: »
    The didn't buy it to run it into the ground and TBH I don't believe they are running it into the groud. They bought it because they saw an opportunity to make a lot of money by being Succesful and building the brand Globally. Like most other people they didn't see the recession on the horizon and that recession must have had some negative impact on their business plan and their ability to increase revenue.

    United is still a viable business and anything I have read on the finance indicates that the clubs debt can be serviced by revenue the club generates. Some see the Piks as a major issue but they are not secured against the Club they are Glazer debt and they just might force/encourage them to sell if they got the right offer.

    I'm not disputing the fact that United is a viable business. I'm also not disputing the fact that the Glazers are shrewd business men with a plan for United to make even more money.

    I'm just curious as to why United fans seem to think that getting rid of the Glazers is going to suddenly make United debt free and have shed loads of cash to splash on new players because lets face it new players are the only reason anyone cares about the money. A lack of new signings in the summer would have everyone up in arms!


  • #25
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    If the Red Knights are seriously out to help the club then why don't they offer the Glazers investment for a % of the club?

    Ok the debt is worrying but United are a huge business and get more sponsorship it seems every couple of months or so. When the Nike contract runs out in 2015 the club may sign another deal for over £250m and take a chunk of the debt with it. I feel the club will be ok.


  • #26
    Son Of A Vidic
    Registered Users, Registered Users 2 Posts: 32,370 ✭✭✭✭Son Of A Vidic


    Why doesn't Fergie go old school again? Get his best young talent on the pitch next season regularly and consistently. Be prepared for a trophyless season or two and build for the future. Even if the money was available, the talent already at the club should not be ignored. We don't want to buy another Berbatov now do we? With Rooney injured and when he was most needed he failed - shock horror. I often think a lot of these big name signings come to United, fulfill a dream or ambition and play out their careers with the pension plan as their only priority.


  • #27
    OPENROAD
    Registered Users, Registered Users 2 Posts: 11,692 ✭✭✭✭OPENROAD


    The Muppet wrote: »
    anything I have read on the finance indicates that the clubs debt can be serviced by revenue the club generates.

    Do you have a link, maybe someone can clarify for me, what is the interest that utd have to pay per year and what is the average profit made by utd.

    Was it not the case that if Utd had not sold Ronaldo they would have made a loss.

    If utd can finance the interest payments how much is left over for possible transfers?


  • #28
    Pro. F
    Registered Users, Registered Users 2 Posts: 12,219 ✭✭✭✭Pro. F


    The Muppet wrote: »
    Some see the Piks as a major issue but they are not secured against the Club they are Glazer debt
    You keep saying this in the United super thread but it is a total avoidance of the obvious issues with the PIKs.

    The PIKs are secured against the Glazers' equity in the club - if the PIKs aren't repaid then the hedge funds that they are owed to will gain control of the club. So yes, in terms of actual effect, the PIKs are secured against the club.

    The recent refinancing during the bond issue was specifically structured in such a way so that the Glazers can use the clubs' revenues to pay off the PIKs.

    In short: The PIKs are held by Red Football Joint Venture Limited. Red Football Joint Venture Limited owns Manchester United. Therefor the PIKs are directly connected to Manchester United.

    All of the above would be obvious to you if you were to take an honest objective interest in the financial issues of club.


  • #29
    Mitch Connor
    Registered Users, Registered Users 2 Posts: 48,194 ✭✭✭✭Mitch Connor


    Pro. F wrote: »
    You keep saying this in the United super thread but it is a total avoidance of the obvious issues with the PIKs.

    The PIKs are secured against the Glazers' equity in the club - if the PIKs aren't repaid then the hedge funds that they are owed to will gain control of the club. So yes, in terms of actual effect, the PIKs are secured against the club.

    The recent refinancing during the bond issue was specifically structured in such a way so that the Glazers can use the clubs' revenues to pay off the PIKs.

    In short: The PIKs are held by Red Football Joint Venture Limited. Red Football Joint Venture Limited owns Manchester United. Therefor the PIKs are directly connected to Manchester United.

    All of the above would be obvious to you if you were to take an honest objective interest in the financial issues of club.

    also, regardless of the ownership issue with the PIKs, it has been clear since day one that the plan is to use United money to pay off the PIKs. United money is, in effect, Glazer money, with which they can do as they like really.


  • #30
    The Muppet
    Registered Users, Registered Users 2 Posts: 14,006 ✭✭✭✭The Muppet


    Pro. F wrote: »
    You keep saying this in the United super thread but it is a total avoidance of the obvious issues with the PIKs.

    The PIKs are secured against the Glazers' equity in the club - if the PIKs aren't repaid then the hedge funds that they are owed to will gain control of the club. So yes, in terms of actual effect, the PIKs are secured against the club.

    The recent refinancing during the bond issue was specifically structured in such a way so that the Glazers can use the clubs' revenues to pay off the PIKs.

    In short: The PIKs are held by Red Football Joint Venture Limited. Red Football Joint Venture Limited owns Manchester United. Therefor the PIKs are directly connected to Manchester United.

    All of the above would be obvious to you if you were to take an honest objective interest in the financial issues of club.

    It's fact, like it or not.

    The rest of your post is theoritical, we don't do that remember?


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  • #31
    Mitch Connor
    Registered Users, Registered Users 2 Posts: 48,194 ✭✭✭✭Mitch Connor


    The Muppet wrote: »
    It's fact, like it or not.

    The rest of your post is theoritical, we don't do that remember?

    It is FACT that if the PIKs aren't paid the hedge funds gain a measure of ownership of the club. If the PIKs are not secured against the club in anyway why would that be the case?


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