Utd report £48m profit

Originally Posted by red in cumbria

Which brings up the question I've asked before - why the £#%&! did they take over United in the first place?

What would they actually have to gain from ruining the club??

Thats my thinking, ok so they bought the club with a loan but why would you then try and devalue the club and ruin it?

Iain,

I have a very stupid question

The PIK debt will reach just under £600m by 2017 when it has to be repaid.

The Glazers borrowed 218 mill in PIK notes right ? Plus 500 + mill in a loan averaging 8 or 9% pa.

Now the stupid question. If the Glazers were able to raise 500 + million at a 'reasonable' interest rate, why the £#%&! did they take on that £#%&!ing crazy PIK shit ? Why not simply borrow 700+ million at a reasonable rate ?

Or am I missing something obvious here ?

Originally Posted by red in cumbria

Which brings up the question I've asked before - why the £#%&! did they take over United in the first place?

What would they actually have to gain from ruining the club??

This is easy to answer. They didn't want to ruin the club. They suffered from typical American entrepreneur arrogance. They thought that they could just swan in an make a killing cos us British managers have no idea of business and don't know how to make money from sports.

For them, United was a 'slam dunk'... I've seen it so many times they never £#%&!ing learn !

Originally Posted by red in cumbria

Which brings up the question I've asked before - why the £#%&! did they take over United in the first place?

Beacuse they could see that the club wasnt being run to the best of its abilities. The PLC took far to much for granted, carried staff that didnt need carrying, underperformed in sponsorship deals, prices for exec boxes and utilising the stadium on non-match days.
If the PLC carried out half the business activities that the Glazers undertook, then the club would never have ben in reach of the Glazers and ticket prices wouldnt need to go up to service loans.
The Glazers have imporved the business side of the club ten fold, its just a pity they had to do so through borrowed money that needs financing through increased prices for fans.

United fans have to take some blame, as after the failed Murdoch bid in 1998, it all went far to quiet and fans sat back until 2004 when Coolmore became interested.

Originally Posted by in 76 now this is true

beacuse they could see that the club wasnt being run to the best of its abilities. The plc took far to much for granted, carried staff that didnt need carrying, underperformed in sponsorship deals, prices for exec boxes and utilising the stadium on non-match days.
If the plc carried out half the business activities that the glazers undertook, then the club would never have ben in reach of the glazers and ticket prices wouldnt need to go up to service loans.
The glazers have imporved the business side of the club ten fold, its just a pity they had to do so through borrowed money that needs financing through increased prices for fans.

United fans have to take some blame, as after the failed murdoch bid in 1998, it all went far to quiet and fans sat back until 2004 when coolmore became interested.

Originally Posted by Albert Tatlock

Iain,

I have a very stupid question



The Glazers borrowed 218 mill in PIK notes right ? Plus 500 + mill in a loan averaging 8 or 9% pa.

Now the stupid question. If the Glazers were able to raise 500 + million at a 'reasonable' interest rate, why the £#%&! did they take on that £#%&!ing crazy PIK shit ? Why not simply borrow 700+ million at a reasonable rate ?

Or am I missing something obvious here ?

At the time, United's turnover and profitability wasn't as good as it is now. In addition, I reckon the Glazers thought they'd have the PIK debt paid off in a couple of years with another refinance.

Not many people foresaw the arse fall out of the cheap unlimited credit market they'd used to fund their businesses for years.

I've just realised you've changed your bloody username.

more doom anyone ?

Manchester United owners borrow £20 million from the club
Bond issue will not free Sir Alex's purse strings, says top football broker
12 Jan 2010 11:00:00
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Glazer Brothers - owner of Manchester United (AFP)
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Manchester United
By Matt Monaghan | Manchester United Correspondent

Manchester United's owners were today revealed to have borrowed millions from the club at favourable rates.

The controversial financing arrangement will anger supporters who have already voiced opposition to the Glazer family's ownership.

The club's financial results revealed yesterday that more than £20 million had gone in to the personal coffers of the Americans since they took over in 2005. This included £10 million in "management and administration fees," plus a further £10 million borrowed by six family members which does not have to be repaid for five years.

Concern has swelled about the effect the American’s management has had on Manchester United's purchasing power. Little relief was given by the manager's plea last week that he had money available, but no targets to spend it on.

United’s controversial owners announced yesterday their intention to raise £600 million pounds through a bond issue. The scheme is designed to cut the current rates of interest being paid out on the club's £699 million debt and put back the repayment date from 2013 to 2017.

At the same time, the Premier League champions announced pre-tax profits for the year to June 30th 2009 of £48.2 million. The report also announced that turnover for this period was £91.3 million, up from £80.4 million the previous year.

Included in these figures was the crippling £41.9 million paid out in interest on the £509.5 million loan used by the Glazers to buy the club in 2005 and the £80 million recouped from Cristiano Ronaldo’s sale to Real Madrid.

The failure to re-invest more than a quarter of Ronaldo’s fee has led to accusations that the Scot’s hands are being tied in the market.

Reports today further hinted in a nightmare scenario for all United supporters that star man Wayne Rooney could be sold in the summer to balance the books again.




Glazer grief | Takeover has burdened United with debt


David Bick has more than a decade's worth of experience in corporate finance in football. He played a key advisory role in massive Premier League deals ranging from Randy Lerner's takeover of Aston Villa to Thaksin Shinawatra's successful bid to buy Manchester City.

The leading football broker expressed scepticism that the revised terms would grant Ferguson the freedom to match the economic might of big spending rivals Manchester City and Chelsea.

“I doubt that [Sir Alex] Ferguson will see the benefit of this deal as the figure is so low. It will not have a material impact [in regards to future player sales and acquisitions] and doesn’t alter the fundamental cash generation of the business,” he said.

“I would be surprised if it [bond issue] was worth more than about £10 million [a year]. It is unlikely to make any difference to the net funds available to the manager.

“When you look at the interest charge implied, [Manchester] United are currently paying an overall [interest] rate of about eight per cent. I would not expect this to move too far in re-negotiations.

“To be honest, the purse strings have been tight since the Glazer’s took over. In effect, he has been able to make only one significant purchase [of a player] worth £25-30 million a year and that’s it.

“He doesn’t have the same freedom as Chelsea and Manchester City have. This will not change with the bond issue.”

Liverpool owner Tom Hicks took a swipe at rival Manchester United in an email to a supporter yesterday.

"Our debt is very manageable (see Man U)," he wrote.

"We never use player sales for debt service. Our interest on £200 million is about £16 million."

Originally Posted by Puebla

Ahh when he says we bid for Benzema when we didnt, Aulas confirmed that lie by saying we asked about him but never bid. Ferguson and Phelan can't even tell the same lie over Ljajic, Ferguson tells us the Glazers are great owners and Gill says he's COMFORTABLE with the debt.

They know because they have two £#%&!ing ears and a brain and believe it or not, not every @#%&! is a Glazer stooge who believes everything the Wizard says so other people do exist

what a load of shit

Originally Posted by Ginners

ill have a michael owen plz

he's in the skip round the back. the tramps took everything of value and left the useless scouse @#%&!.

Originally Posted by red in cumbria

Which brings up the question I've asked before - why the £#%&! did they take over United in the first place?

What would they actually have to gain from ruining the club??

Their end goal has to be to make a profit.

The only way I envisage that happening is through the sale of individual tv rights or someone buying the club off them (which doesn't look like happening in the current climate).

Barry Glendennings Fiver:

BORROWING FROM MANCHESTER UNITED TO PAY MALCOLM

There are two ways of analysing Manchester United's current financial situation. You can go down the arduous route favoured by masochists like proper journalism's David Conn [http://guardian.chtah.com/a/tBLTKw7A...yhA7lK0/fvr21: walking into old buildings and asking the nice old lady behind the counter to climb a very tall ladder, run her finger along the spine of several nondescript ledgers and bring you the particularly thick one full of very large numbers printed in red ink. Then studying it so hard you need to wear goggles and a crash helmet.

Or you can go down the less arduous route favoured by many Manchester United fans: walking to the nearest beach, finding a place where the ground underneath seems particularly soft, then bending over and submerging your head in the sand to the point where you can no longer see or hear anything that might disabuse you of the foolhardy notion that everything at your club is great.

That way you'll never find out that, despite winning Big Cup and Premier League x 3, selling Him to Them for £££££s and generating more than ££££££££s per annum in match-day revenue, one of the best-known football teams in the world only managed to turn a pre-tax profit of just £££££s last year and is saddled with more than £££££££££££££££££££s worth of debt, compared to the £ debt it had four years ago, shortly before a fat man from Florida decided that it might be a swell wheeze to buy a big English soccerball franchise with a big pile of £££££££££££££££s he didn't have.

Since then, the fat man from Florida and assorted members of his fat family have added insult to injury by helping themselves to ££££s in personal loans from the big pile of £££££££££££££££s they don't have; a pile of £££££££££££££££s that has grown considerably due to the prohibitive £££££££££s of vig that must be paid to the Shylock that loaned it. This is not to mention another £££££s in "management and administration fees", which optimists will argue would have been a lot higher if any of the management and administration it went towards paying for was in any way competent.

But all is not doom and gloom at Old Trafford. The fat man from Florida has announced his intention to help pay back ££££££££££££ of the £££££££££££££££s they don't have but owe to a Shylock, by borrowing another ££££££££££££ they don't have and will then owe to some other Shylock. If you're still a bit confused about how it works, here's renowned financial expert Dale Winton [http://guardian.chtah.com/a/tBLTKw7A...yhA7lK0/fvr22] to explain all.

Good piece by David Conn
http://www.guardian.co.uk/football/b...d-glazers-debt

Originally Posted by Smurf

Barry Glendennings Fiver:

Shylock? Isn't that anti-semitic?

Originally Posted by Liu Jian

Shylock? Isn't that anti-semitic?

probably not, given that the same column refers to Rangers as "The Pope's O' Rangers" and Celtic, "The Queen's Celtic".

Originally Posted by Smurf

probably not, given that the same column refers to Rangers as "The Pope's O' Rangers" and Celtic, "The Queen's Celtic".

Originally Posted by RedMenace

Can't see those PIKs being allowed to run to maturity one way or another. They'll have either refinanced them or sold up by then I would think. They don't seem to be planning for the long term, just deferring things long enough for the economic situation to pick up. Aren't the most punitive PIKs secured on the Glazers' personal assets rather than United?. Another reason why they'll be looking to do something about it before 2017.

the reason they took money from funds on such a suicidal basis is because they could not get enough money any other way. nothing is secured on their personal assets outside united.

Originally Posted by El Chalten

it makes you wonder why the £#%&! they bought the club in the first place?

and more importantly/worringly, who is going to buy a club with so much debt?

nft.

they didn't put a penny in, so they never had any downside.

Originally Posted by redloner

As things have evolved today, the picture is becoming clearer.

The bond issue of £500m will be added with £30m cash, to repay the existing senior debt, the fees for the bond and a contribution towards a little interest rate gamble that didn't quite pay off.

The bond coupon will be 8.5% pa, so where the interest paid is £41.9m pa at present, it will be £42.5m pa in future.

The bonds have to be repaid in 2017, so unless someone comes up with some big cash before then, we'll be looking at another refinance at some stage.

There's £146m in cash in the business. £30m is going out as mentioned, with a further £70m being used to reduce the nasty PIK roll-up debt down to £148m. By paying off the senior debt, the Glazers remove a covenant preventing them paying a dividend. These can be used to reduce the PIK debt further in the next few years.

The revolving overdraft facility with J P Morgan has been replaced with a new one for £75m and Carrington is no longer part of the security, so look for a sale and leaseback at some stage to assist PIK paydown.

So, in cash terms, we end up paying no more than at present and will still have around £70m lying around the bank. Capital repayments have been put back to 2017 at the earliest.

Only downside, Red Football, despite turnover increased to £278m only managed a profit when the Ronaldo money was taken into account. The announced profit would have been a £32m loss without his sale.

if they can get the bond issue away, they are merely swapping debt for debt. the banks shift risk to whoever buys the bonds. but you hope they will use any cash they have to pay down the pik notes?

Originally Posted by RedMenace

The most dangerous PIKs are secured on the Glazers assets so I would think they'll be wanting to do something about that, and this is where the dividends would come in I guess. I hate to be simplistic but is there any chance of more money being freed up for the team in order to keep its on field performance levels high?

the glazers' assets utlimately being united. nothing else.

Originally Posted by Mr Kaboom

In all the welter of information,one thing stands out.The Glazers are taking £70 million out of the club to pay down the one debt that could have any personal implications on themselves.

none of it has any personal implications for them.

Originally Posted by redloner

They've taken very little out for themselves. Their debt interest is more than enough, to be honest.

Once this £48m profit has had the PIK treatment (been through the Red Football Joint Venture books) it will fall to £23m. Although the interest isn't paid on the roll-up debt it still impacts, so the £25m interest for last year has to be taken into account.

Once all the toing and froing is over there's £70m in the bank, plus this new £75m overdraft facility. In addition, there will be fewer restrictions on management and the Glazers will be able to take dividends and pay down the PIK debt further.

What might be used to buy players? God knows.

aside from the factually incorrect opener, the rest is insanely optimistic.

Originally Posted by Tumescent Throb

I'm interested to know what exactly the £15m cost of fees is for, and more particularly, for who? How much does your average refinancing on this scale rake in for your average finance industry spiv?

I'm also interested to learn what is known about MU Finance, which is to say I'd like someone to post it up on here

For example, how much business do they have and what in, how many users of their credit do they have, how much debt have they got to trade with, how much interest - and indeed how much interest - is there in it and so on?

ah, arranging fees. that's what pays my mortgage.

Originally Posted by Albert Tatlock

Iain,

I have a very stupid question



The Glazers borrowed 218 mill in PIK notes right ? Plus 500 + mill in a loan averaging 8 or 9% pa.

Now the stupid question. If the Glazers were able to raise 500 + million at a 'reasonable' interest rate, why the £#%&! did they take on that £#%&!ing crazy PIK shit ? Why not simply borrow 700+ million at a reasonable rate ?

Or am I missing something obvious here ?

they couldn't raise any more at reasonable rates. that is why they went to sharks.

Originally Posted by In 76 now this is true

Beacuse they could see that the club wasnt being run to the best of its abilities. The PLC took far to much for granted, carried staff that didnt need carrying, underperformed in sponsorship deals, prices for exec boxes and utilising the stadium on non-match days.
If the PLC carried out half the business activities that the Glazers undertook, then the club would never have ben in reach of the Glazers and ticket prices wouldnt need to go up to service loans.
The Glazers have imporved the business side of the club ten fold, its just a pity they had to do so through borrowed money that needs financing through increased prices for fans.

United fans have to take some blame, as after the failed Murdoch bid in 1998, it all went far to quiet and fans sat back until 2004 when Coolmore became interested.

there is nothing they've done that couldn't have been done without a takeover. and united fans could have killed it stone dead if they hadn't been focused on the wrong things. the glazers bought something they couldn't afford without risking anything - except the finances and future of the club. they've added nothing but danger. they should never have been allowed to get away with it by the fans or by the authorities. why anyone would be surprised about anything that has happened is beyond belief. especially anyone who used to read the 4wum.

the reason the financing is so shit is because they couldn't have bought united on a sensible basis. their "good business practices" have mainly involved screwing other people and overburdening a company with debt is the number one bad practice I can think of.

they are leeching scum.

Originally Posted by believe

i have done quite a lot on the protest front tbf

Examples please.

Originally Posted by jem

if they can get the bond issue away, they are merely swapping debt for debt. the banks shift risk to whoever buys the bonds. but you hope they will use any cash they have to pay down the pik notes?

aside from the factually incorrect opener, the rest is insanely optimistic.

This is a refinance that will end up costing United more than the debt does now. The interest bill will increase and in seven years time another one will be needed to refinance THIS £500m.

All it does is remove covenants preventing the Glazers from finding ways of siphoning cash out. The bond prospectus tells they intend to use £30m to repay the rest of the senior debt and they intend to take another £70m to paydown the PIKs. That's another £100m on top of all the interest!

The "Carrington Transaction" as it is described will be the Glazers transferring the training ground into another company, mortgaging it, using the cash to pay down the PIKs again then renting the place back to United.

Every year they'll be back for more money for the PIKs.

They've only managed to amass as much money as they have by getting almost half the Aon money upfront.

If I've given the impression that I'm optimistic of this working, then I'll have to rethink my approach. All this does is guarantee another seven years running like a bloody hamster on a wheel to stand still while these idiots try to keep the lenders and bondholders happy. Even then, seven years is just another roundabout in the road, not an end.

I wrote this earlier, when I was angrier. It was an MEN comment;-

United's cash pot currently stands at £146m. When the Glazers have plundered that for the £100m they plan to use to reduce their debt there will be £46m left over. So ALL the Ronaldo money is sitting waiting to be spent is it?

Or is it once again a question of United fans supplying the cash and players once again being bought with debt, or on instalments?

Don't forget they've managed to get Aon to pay £36m upfront for a deal that doesn't start until next season and plan to give Carrington to another Glazer business so it can charge United rent to use it.

In the future, the interest on the bonds will cost United MORE than the interest on the current debt and the Glazers will be along every year for more cash withdrawals to fund their 14.25% roll-up debt.

Another refinance will be needed in a few years to pay back the £500m from this bond issue.

This is not a disaster now, but it is a disaster waiting to happen. United has to continue to succeed and has to continue to bring in the pots of cash the Glazers need. I can see Fergie having to stay until 75 because the uncertainty of a new manager might just kill the Glazers future financial plans stone-dead.

the glazers couldn't give a £#%&! about protests now.

Originally Posted by redloner

This is a refinance that will end up costing United more than the debt does now. The interest bill will increase and in seven years time another one will be needed to refinance THIS £500m.

All it does is remove covenants preventing the Glazers from finding ways of siphoning cash out. The bond prospectus tells they intend to use £30m to repay the rest of the senior debt and they intend to take another £70m to paydown the PIKs. That's another £100m on top of all the interest!

The "Carrington Transaction" as it is described will be the Glazers transferring the training ground into another company, mortgaging it, using the cash to pay down the PIKs again then renting the place back to United.

Every year they'll be back for more money for the PIKs.

They've only managed to amass as much money as they have by getting almost half the Aon money upfront.

If I've given the impression that I'm optimistic of this working, then I'll have to rethink my approach. All this does is guarantee another seven years running like a bloody hamster on a wheel to stand still while these idiots try to keep the lenders and bondholders happy. Even then, seven years is just another roundabout in the road, not an end.

I wrote this earlier, when I was angrier. It was an MEN comment;-

I thought it was optimistic to say they would use dividends to repay pik notes and (even consider) cash to buy players. the pik notes are a piano falling, but they can do whatever they like with the dividends. when the piano hits, it will give the hedge fund shares in united, not allow them to throw mr glazer out of his ridiculous trousers. I'd like to know how far up the line the dividend restrictions run. in any case, as we have seen, they don't need to pay themselves dividends to suck money out of the club.