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Financial Times summary of Red Football accounts (with link)
http://www.ft.com/cms/s/0b2053ee-ea2...b5df10621.html
Man Utd goes £137m into the red By Roger Blitz Published: April 14 2007 03:00 | Last updated: April 14 2007 03:00 The Glazer family's takeover of Manchester United resulted in a pre-tax loss of £137.7m in the club's holding company, figures filed at Companies House reveal, writesRoger Blitz. The accounts for Red Football, set up by Malcolm Glazer for the deal, also show for the first time that the actual amount paid by the Glazers was £809.1m. The figures were disclosed as the club extended the contract of Cristiano Ronaldo, one of its prized assets, by five years, in one of the biggest deals in British football. According to the accounts, after a net asset valuation of £286.8m, the goodwill generated from the deal comes to £522.4m, depreciating by £39.2m a year over 15 years. Interest payments on debt of £598m totalled about £85.2m in the 14 months between May 1 2005 and June 30 2006, divided between £27.2m from cash flow and £57.9m in high-yielding payment-in-kind notes. The accounts are the first declaration by the Glazer family, owner of the Tampa Bay Buccaneers NFL team, of the scale of the club's indebtedness needed to secure the takeover. The family waged a protracted battle with the board before securing the takeover. However, the club's success on the pitch - it leads the Premier League and is in the semi-finals of the Champions League and the FA Cup - has eased pressure. The Glazers refinanced the debt last August, raising the total debt to £660m but reducing the debt servicing to about [SIZE="5"]£60m. A spokesman for the Glazer family said the accounting losses had "absolutely no bearing on the strong underlying financial performance of Manchester United, which is presently enjoying record revenues. "The Glazer family is committed to continuing to invest in the club's future . . . " Manchester United reported in January that the club had made a £31m profit in the 12 months to June 30, with earnings at £46.3m. Red Football's earnings were £10m lower, the result of costs borne in the last two months of the accounting period. People connected to the Glazer family said the accounting losses were expected and reflected the cost of financing the old capital structure of the club, the depre- ciation of goodwill and excep- tional one-off takeover costs. Copyright The Financial Times Limited 2007 2 months @ £10m= £5m a month = £60m a year |
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I still don't understand how using debt to finance the take over of United can be viable as a business proposition.
If they do pay it off it'll make me even angrier to think that hundreds of millions of pounds that could have gone in to the ground and team has been used to service the debt. If they can't pay it off then I think United as we know it will cease to exist unless a Murdoch appears on the scene and i'm ashamed to admit that i'd welcome him with open arms. |
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I was strongly opposed in '98 so i'm not blind to corporate cancer but nor am I blind to our present predicament and the realistic possible solutions to it. |
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This news just goes to show the stupidity of those claiming that the Glazers have not done anything bad by the football club and that we are all good as we are in the FA cup final and a champs league semi. Leeds made it in to a champs league semi with Risdale at the helm and look what happened to them.
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if you actually add up
all the separate bits of interest, it comes to more like £70mio (without counting any paid to commerzbank for funding the initial stake... which all the reports seem to forget about entirely as it is higher up in the glazer holding chain).
and anyone who says that revenues being up indicates a strong underlying performance must either be an idiot or take us for suckers. profits are what matter, not revenues. that said, profits could be increased significantly over the next few years. if they have any idea what they're doing. |
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Next year's figures will be far more interesting than this year's (although they could end up being a bit distorted if the rest of this season goes as most United fans hope).
Profits will be up over the next few years even if the Glazers don't know what they're doing - I assume that they do, for now. Why people carry on comparing United with Leeds is beyond me. It's an example of a football club £#%&!ing up its finances, but other than that it has not the slightest relevance. They are not in United's league in any way shape or form off the pitch and never have been. |
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...and neither was their debt. Leeds. Value - £150 million Debt- £100 million Turnover- £50 million. United Value- £800 million Debt- £660 million Turnover- £160 million. Why does the fact they acquired their debt in a different way to us negate the comparison? ( As least they actually got something for their debt!) |
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The quadrents worry me though as the money that was saved up by the plc to pay for them, is more or less exactly the amount 'loaned' by MUFC to Red Football. So if part of the MUFC debt increase this year was thus to pay for them, at say 7% ( ), that more or less wipes out ALL the profit from them for 10 years. Well until they put the prices up, anyway. Factor in wage increases of say say 70kpw extra for Ronnie, £50kpw Hargreaves etc, and all of a sudden your £15m doesn't go all that far. And as all merchandising, TV rights and sponsorship are pre-sold for at least 3 years from now, ticket increases will be the only real way of increasing profit 2 - 3 years from now. Well apart from winning the trebble every year, anyway. |
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Yeah but they are not in United's league on the pitch, either, and but for a short spell over 30yrs ago they never have been in the club's existence.
You may as well compare United with Bradford Park Avenue or Aldershot. It's a totally different animal to anything else. For a start off the chances of United failing to qualify for the CL any time ever are slim to none. The chances of them failing to progress to the KO phase are almost as slim (once in 11 years). The chances of United slipping away from being amongst the biggest TV pulls in world football any time soon are zero. |
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When these things happen we have never made more than £ 30 million in profit yet the loan payments are £62 million. Preserving the status quo won't save the Glazers. |
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But that's the point Rossi !
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And, I don't know if you're a regular or not, but as sure as eggs is eggs, they're going to squeeze every last drop out of their "customers".. |
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