I dont get it...

[Waddy]

Right, I am by no way an exert on this big business lark so bare with me.

I get told by angry Man utd fans that the Glazers are ******s and all that and how they have plunged the club into 800m of debt and all that jazz. From what I can gather is they have secured the loans on the club, so its a mortgage right? A debt most of us have in life. A debt I have on my business but nobody says "lol you're in loads of debt' So thats the first part that I am not getting why the hate is there.

The second bit is that I read today its worth like over 1billion or something. There is another party are trying to buy the club from the Glazers...now if they pay Glazers the asking price and the Glazers accept, will the club not then be in debt for over a billion? The money will still have to be borrowed right?

Reports indicate that there are funds for the manager to spend on new players, they reckon the Ronaldo money is waiting for SAF to do as he pleases with.

Soooooooooooo whats the problem?

 

[Cena]

What it all boils down to is that it's the volcanic ash's fault.


In all seriousness i think why United fans are annoyed, in it's simpliest form, is that they bought the club with an idea to make a profit out of it - i think

 

[Waddy]

What it all boils down to is that it's the volcanic ash's fault.


In all seriousness i think why United fans are annoyed, in it's simpliest form, is that they bought the club with an idea to make a profit out of it - i think

You mean they are annoyed because they bought a business...and tried to get it to make money? THE LOW DOWN BASTARDS!!!

 

[Matt Damon]

Right, I am by no way an exert on this big business lark so bare with me.

I get told by angry Man utd fans that the Glazers are ******s and all that and how they have plunged the club into 800m of debt and all that jazz. From what I can gather is they have secured the loans on the club, so its a mortgage right? A debt most of us have in life. A debt I have on my business but nobody says "lol you're in loads of debt' So thats the first part that I am not getting why the hate is there.

The second bit is that I read today its worth like over 1billion or something. There is another party are trying to buy the club from the Glazers...now if they pay Glazers the asking price and the Glazers accept, will the club not then be in debt for over a billion? The money will still have to be borrowed right?

Reports indicate that there are funds for the manager to spend on new players, they reckon the Ronaldo money is waiting for SAF to do as he pleases with.

Soooooooooooo whats the problem?

That is correct. They paid 250million of their own money and took out 750million of loans to buy the club. Then they put them all onto the Mancs books.


Last November they had a bond issue as the variable interest rates on 500million of the debt was going up to 21%

the bond issue, (i.e. give away % of future profits to bond owners who by the bonds for a fixed period).......... brings that increasing loan rate down effectively to a more manageable level. In the refinancing, the other £250million was also "prioritised" with the bank lender to ensure they are paid first.


In the second part - about another owner - YES you are right. If another own pays £1billion for the club, that £1billion is effectively a debt unless the owner says that's converted to "equity" and writes it off. - but you've got to have a spare £1billion lying around for that haven't you?

The redknights basically said they'd prioritise profits to debt repayment, and the fans shareholders would effectively not take profits out in order to pay debt off.


IN TERMS OF THE "RONALDO MONEY" - last year they would have made a loss due to the increasing debt interest ... without selling him. Their net profit was only about £10million after selling him.

So the idea that there's all this money floating about is a joke.

They would have any profit made this season + that £10million..........

Anything above that would have to be borrowed (i.e. incur more debt)

Its simple really.

They may have maybe £20million assuming their revenues stay high. And assuming that that £20million isn't diverted to pay down the debts (reduce them).

No more than that before any further spending means they're in a worse position overall.

The bond holders won't like that or the banks who refinanced them.

 

[Waddy]

If the repayments are being met then the bank cant say anything right? And they are being made, they must be.
I suppose we will see this transfer window if they can deliver on promises or not. You say that IF they didnt sell Ronaldo, well they did. IF they sell Rooney this transfer window to Real or whoever its still part and parcel of a business.

If the club is sold I just cant see how it would be any better.

 

[Matt Damon]

If the repayments are being met then the bank cant say anything right? And they are being made, they must be.
I suppose we will see this transfer window if they can deliver on promises or not. You say that IF they didnt sell Ronaldo, well they did. IF they sell Rooney this transfer window to Real or whoever its still part and parcel of a business.

If the club is sold I just cant see how it would be any better.

Previously the loans had a variable interest rate which increased if the loans weren't paid by a certain date.

I may have a loan with a bank. I might currently be making my repayments - but if my outgoings exceed my incomings the bank rightly has the opportunity to comment if they feel that future repayments are going to be jeopardised.

Many even have the opportunity to withdraw the loan early and request immediate payment in full.

The bond holders are different. They are guaranteed a fixed % return which the Mancs will take out of turnover. This will happen to a certain date, and at that date the value of all the bonds + fixed % return will have been paid and then that will be that. It'll be something like 30 years though or something.


Yes you are right, if they sell assets - like Rooney they would make a higher profit and potentially pay off some of the debt too.


And I agree, if the club is sold, I don't think it would be any better either.

If all the shareholders give them an interest free loan effectively for it....

It would still take 10 years to pay off the debt to all the new shareholders - without anyone putting any more money in.

That assumes them winning the league reguarly, being in the CL every year and not spending stupid amounts on players....

And that they don't get someone like Benitez in....................

 

[Waddy]

It just strikes me as a little odd. The Glazer family run many sucessful business all over America and have been in sports a long time too. So they must know what they are doing. Have they failed?

I dont think much has changed in revenue at Man Utd since they took over and currently in second with a chance of winning the 4th title in 4 years, they aint doing that bad. The big problem I see is the fact they wont be able to play CL football unless they start to make more money right?

I dont really care what happens at Man utd, just interesting to see fans so angry at being the most sucessful club in the prem.

 

[ToffeeDan]

Nothing new about borrowing money to finance a business takeover. What irks the supporters (and quite rightly so) even though they are just customers is the notion that the benefit (ultimately) derived from any sale of MUFC to a 3rd party will have been achieved with little or no outlay by the Glazers. The assumption is that the value of the business/football club will have grown over (say) 10 years.

Furthermore the supporters are disenchanted because they see rival businesses (other football clubs) channelling profits into player investment which is perceived to be one significant way to ensure future success. If the profit before interest is much greater then this can be given (in part) to the manager to strengthen the team. Since MU were virtually debt free before the Glazers blew into town then the fans rightly see this as a deception - one which was perpetrated by the Glazers (and Uncle Tom at the RS) - and at their cost (in both increased ticket prices and a potential failure to maintain the supremacy they have enjoyed under previous stewardship).

 

[Neiler]

Basicly they are annoyed because Utd was relatively debt free and churning out profit to be self sustainable at the top - under the old board. Without much tangable change in playing or investmnt on the playing side the Glazers took over and turned Utd from being relatively debt free, to having debts of 800mill +.

Would be like Bill selling tomorow and whoever bought us heaping the price they paid on to Evertons debt meaning we would be 100's of million in debt. This is what Bill talks about when he talks about the right type of investment.

Its the model used most in the Prem League takovers etc - See Villa, Norway, West Ham, Cheksea, Brum, Pompey etc. I think Man Citys books are going to make intresting reading as well.

 

[Bruce Wayne]

Basicly they are annoyed because Utd was relatively debt free and churning out profit to be self sustainable at the top - under the old board. Without much tangable change in playing or investmnt on the playing side the Glazers took over and turned Utd from being relatively debt free, to having debts of 800mill +.

Would be like Bill selling tomorow and whoever bought us heaping the price they paid on to Evertons debt meaning we would be 100's of million in debt. This is what Bill talks about when he talks about the right type of investment.

Its the model used most in the Prem League takovers etc - See Villa, Norway, West Ham, Cheksea, Brum, Pompey etc. I think Man Citys books are going to make intresting reading as well.

Exactly, and in addition to the debt, they have taken an extremely profitable company, arguably the most profitable club in the world, and turned it into a loss making business just because of the interest payments.

 

[neville]

Exactly, and in addition to the debt, they have taken an extremely profitable company, arguably the most profitable club in the world, and turned it into a loss making business just because of the interest payments.

Evening Toffees

Some interesting observations and well informed. However I am not going to get into any deep and meaningful debate about this as I just end up winding myself up

So my view is that the working man is getting ******* over allover in Football and its gonna get worse

The Glazers are ******* end of and I want my club back

Green and Gold till Uniteds sold

PS If that means us being [Poor language removed] for a few years so be it

Finally Vote Labour you know it makes sense

 

[Neiler]

Evening Toffees

Some interesting observations and well informed. However I am not going to get into any deep and meaningful debate about this as I just end up winding myself up

So my view is that the working man is getting ******* over allover in Football and its gonna get worse

The Glazers are ******* end of and I want my club back

Green and Gold till Uniteds sold

PS If that means us being [Poor language removed] for a few years so be it

Finally Vote Labour you know it makes sense

Its the scam of the century mate - any Bond Villian would be proud of what the Glazers did to Utd.