[Archived] Glazer Set For Utd

[Rovermatt]

Truly brilliant.

Nothing less than they deserve.

[Yorick]

Superb. I'm sending it to my scouse mate now.

[philipl]

Also mildly amusing.

[Rovermatt]

Don't agree with this bit:

3) Man Utd are no longer the most hated team in the country (they are no longer worth hating) and, Sir Alex, that surely must be a considerable source of comfort.

I still absolutely despise the @#/?s. To stop now would play into the hands of those United followers who claim other fans are simply jealous. I've never once been jealous of United. I couldn't give a toss about Chelsea or Arsenal winning the league.

ABU.

Edited December 9, 2005 by Rovermatt

[SouthAussieRover]

Oh my I'm like that scene in Mary Poppins where every joke takes them to the ceiling.

Classic AS

Thankyou.

[den]

[SuperStella]

Due to Manchester United's tragic exit from all European competitions this season, there is to be a minutes laughing at all Premiership games this weekend.

[Anti Euro Smiths Fan]

A Premier League spokesman said that he's sure the minutes laughing will be keenly observed by all supporters.....

At least Ronaldo was there to comfort Rooney a little:

I thought Wayne usually goes for the older ladies in PVC leather.....

[Florida Rover]

more bad tidings for glazer?

Philip,thought you and others might be interested in the local rag and its business headline today.Details some suspicious activity between his Zapata shares and the timing of his purchase of mufc.Where there is smoke there is fire (or is it "where the trawler is there the seagulls fly" or some such nonsense from cantona back in the day ).

Florida Rover

[Blue blood]

Watching the game I was delighted to see how clueless United looked. Their few attacks down the wings that got to the byline caused absolute havoc amongst the Benfica defence - indeed one got a very good goal. So United decide to ignore the byline altogether for most of the game, lumping the ball into the penalty area from the edge of the box, leaving a somewhat melodramatic portugese team with a fairly comfrotable victory. When Ferguson did have two fresh attacking players on the wing in Park and Rooney he played them on the wrong sides, with Park on the right and Rooney on the left. The result was both continued to cut inside and the bylines remained a manure free zone. A two year old could have seen that the benfica defence was uncomfortable with crosses, especially their rather shocking keeper, but Ferguson apparently did not.

Secondly I was delighted to see how weak the squad looked. Other than Heinze who was injured that was their strongest team. Now the first 11 was pretty amazing (save Smith who isn't top draw as a defensive mid) but after the first 11 the quality began to peater out after player number fifteen. Saha isn't a top class striker, look at any other big team - big as in competitors in champs league on a regular basis rather than deluded like Brum - and who there third striker is. Nearly all are a lot better than Saha. Equally the likes of Fletcher, Richardson etc whilst useful hardly inspire terror into the opposition. United's once superstrong squad is looking a tad threadbare.

Added to Vodafone jumping ship, a lack of European action - which really will hurt their chances of getting top players in January and chelsea's dominance the future does not look bright for United

[cletus]

***FOR HIRE***

67000 seat stadium in Manchester area,

available on Tuesday/Wednesday nights

after christmas. Ideal for events such as

pop concerts.

Interested parties should call

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& ask for Malcolm

[philipl]

Reading between the lines at the Buccaneers.

[philipl]

For those interested, Man United supporters have done the following analysis of one very sick-looking football club. Makes my look at Rovers easy in comparison.

One point the MUST don't raise is that the purchases of Evra and Vidic very nearly bring the Mancs' spending to the £12m annual limit the hedge fund allows for net transfer out-goings. No wonder they offered £2m + Saha for Defoe last night- it was all they were allowed without breaking their covenant.

From UWS:

United's Debts

By Andy

Date: 1/2/2006

MUST looks closely at David Gill's public statements on the debt hanging over our club. "Much of the press reporting of the recent MU results for the financial year 2004/5 has quoted the figure of £46m of profit for the club.

This spin is misleading - the £46m quoted is actually the EBITDA number, the cash

operating profit before taking into account interest, tax, depreciation and amortisation costs. (A Rovers comparison- our EBITDA number was over £9m profit).

The net profit, after deducting those costs, was actually £12m, down £15m from £27m the year before. After tax and dividends, this number comes down to £4.4m of post-tax profit.

Gill has followed up the results announcement by making certain statements about the debt which in our view do not stack up. These are his statements, followed by our comment.

"There are two elements to the debt, the hedge funds and the senior debt," explained Gill. "The hedge funds have no security over the club and no influence over it either. Yes, they have to be repaid but that is something the Glazers will do from their own resources or refinancing plans in time."

This is true up to a point but misleading in what is leaves out - the hedge funds do have rights over the club and its assets and operations, according to the finance documents that Glazer had to make public during the takeover:

§ If MU's EBITDA (cash operating profits) for FY 2006 and 2007 do not hit

£48.5m and £75.7m respectively, the funds have the right to appoint 25% of Red Football and MU's boards of directors. And if the £275m hedge fund debt (PiK) is not completely repaid by May 2010, the funds have rights of veto over all commercial and financial aspects of the club including player transfers. Plus they can force the club to be put up for sale in those circumstances.

§ Of course it is inconceivable that Glazer would allow this to occur,

especially since interest is rolling up on the PiK at an average rate of 18%

per year (first year's interest alone is £51m to May 2006). The PiK must be

repaid or refinanced quickly, or Glazer risks losing his equity and possibly

the club itself to the hedge funds. It is difficult to see where Glazer

gets the cash to repay >£325m of PiK from his own resources this year - rumours still abound that his £272m 'equity investment' in MU was part (if not all) borrowed. So a debt refinancing is undoubtedly on the cards.

This, we predict, will come in the form of either (i) a sale & leaseback of

Old Trafford or (ii) using all available cash from United (and perhaps Glazer's own funds from the sale of his US businesses which are currently on the market) to repay part of the JP Morgan senior debt, perhaps taking the outstandings down to around £200m or less. Then he would extend the borrowings against club assets to (say) £500m and use the sale & leaseback proceeds or new £300m loans to repay the hedge funds. By this time next year, we believe, the total senior debt secured on United's assets will be between £450-£500m, which is the amount Glazer intended the club to borrow in his original business plan that was so roundly dismissed by the pre-takeover board (including David Gill himself) as 'damaging' to the club.

[Why damaging? Because the annual debt service payments on this level of debt would be in the region of £80m!].

The ruinously expensive hedge fund debt was introduced by Glazer after this

rejection in order to address the board's legitimate concerns (to avoid a

Leeds-type meltdown), by appearing to take some of the debt into his own company. This was always a temporary solution and we are now heading back to Glazer's Plan A - load it all onto United. This requires saving money - for evidence of where the club's cash is going, look at the cost-cutting which has been going on (staff made redundant, players sold or loaned out, axing one reserve team etc); look at the transfer budget (two defenders yes, but no cash for a midfielder in January, despite desperate need). The hedge fund debt is undoubtedly occupying a huge amount of the Glazers time working out how to get rid of it and onsequently the hedge funds' "influence" over the club and its finances is enormous.

The question has to be asked - would the Glazers sanction spending £5m or so on a midfielder in January, over and above the £12m already spent, if this could result in United failing to hit the £48.5m EBITDA target this year?

We think not - it could lead to the hedge funds exercising their right to appoint directors to the board. So no midfielder, unless perhaps on loan. A clear example of hedge funds "influence" over the club?

"Manchester United is supporting the senior debt, which is around £265million-£275million."

Gill does not mention the separate £109m loan facilities from JP Morgan taken out by the club and highlighted in Glazer's offer document, in addition to the £265m senior debt - total JPM facilities of £374m. £18.9m of this was a bridge loan for buying out small shareholders. There was also a £50m revolving loan facility (speculation being that this was to pay Glazer's advisers fees for the takeover at around £40m or more) and a £40m capex facility to pay for the stadium expansion - the previous board had set aside cash from the club's own resources for this. Glazer's PR spinners claim that the bridge loan (£18.9m) has already been repaid and the other facilities (£90m) have not been drawn down. No evidence of this has been produced and we are entitled to assume that at least the revolver and capex debts were drawn down and are still outstanding.

"People need to recognise the cost of servicing the interest on that debt is not in excess of what we were previously paying in dividends and corporation tax as a publicly quoted company".

This is completely untrue and inaccurate. These are the figures for dividend and tax costs for the last two financial years, taken from United's own published accounts:

2004 - Corporation Tax = 8.6m, Dividends = 7.0m Total = £15.6m

2005 - Corporation Tax = 4.2m, Dividends = 3.4m Total = £7.6m

Interest payments on the JP Morgan £265m senior debt and £90m revolver/capex facilities for the first full year (2005/6) are £30.3m, four times the dividend/tax cost for last year:

£55m term loan 1 over 7 years @ LIBOR + 2.75% pa (7.35%) First year interest = £4.0m

£62.5m term loan 2 over 7.5/8 years @LIBOR + 3.25% pa (7.85%)

£5.0m

£62.5m term loan 3 over 8.5/9 years @ LIBOR + 3.75% pa (8.35%)

£5.3m

£85m term loan 4 over 10 years @ LIBOR + 6.5% pa (11.10%)

£9.5m

£50m revolving credit over 7 years @ LIBOR + 2.75% pa (7.35%)

£3.6m

£40m capex facility over 7 years @ LIBOR + 2.75% pa (7.35%)

£2.9m

£355m total debt

Total Interest £30.3m

LIBOR currently stands at 4.60%.

Gill will also say they no longer have to bear the cost of being a listed company - regulatory and admin. fees would have added a further approx. £2m per year, not material to Gill's argument.

The debt itself is serviceable because our cash generation will improve through the expansion of the stadium and other things."

Current levels of debt, maybe. But what if the refinancing increases the club's debt load to £500m? Requiring annual servicing to the tune of £80m? Where will this extra revenue come from?

§ New shirt sponsor - speculation is rife that united will announce a deal

with UAE-based Ettihad Airways worth around £12-15m per year, an increase from Vodafone's £9m p.a. Ettihad is a company and a name that no-one has heard of, but this will not worry the Glazers who desperately need the cash and a deal which exceeds or matches the market best. The previous board rightly wanted to associate the Manchester United brand with a reputable global brand name, but it looks like the rumoured big name sponsors are not willing to pay what the Glazers are demanding. So cash needs must where the devil of £600m debt drives.

§ Increased TV and media revenues? Unlikely - these are expected to remain

static, and could even reduce given United's early exit from the Champions' League this year and if they fail to finish higher in the Premier League (PL) than last year.

§ Cup runs do not produce a large amount of cash for United - gates and TV

money are shared (home and away) and home gates have not been good (see below).

§ Expansion of the stadium will not come fully into play until next the financial year 2006/7. An additional 7,500 seats in theory gives a large revenue boost. But there are disturbing signs that the stadium expansion has come at a time when gate attendances, ticket demand and fans' ability or willingness to pay any price to watch their team have peaked at United (and throughout the PL). Attendances at United's PL games this season have been sold out as usual, but gates for cup games have drastically declined - no full houses and gates ranging from a 17-year low of 43,000 to see Barnet in the Carling Cup and culminating in a 61,000 gate for the Carling Cup semi-final against Blackburn. Even non-league Exeter in the FA Cup got a full house last season. Glazer's planned ticket price rises (trailed in the leaked business plan in the Times last June) will surely have to be reviewed, given that for all cup and some PL games, the club has had to resort to selling on the gate (unheard of for 20 years), offering half-price executive packages and emailing local schools with offers of cheap tickets for schoolkids. The mythical '40-year waiting list' for season tickets has evaporated - the club is currently offering new season tickets for the new quadrants to non-One United members - having only just managed to sell all of the 2,500 extra season tickets before this season.

Fans willingness to pay higher prices and go to all games cannot be taken for granted any more.

"This is a new era," said Gill. "We didn't have any debt before and now we do but I am quite comfortable about that situation."

Quite right David, it is a new era - the game has changed and fans across the country are refusing to be taken for mugs anymore. And we rightly don't like debt in the huge amounts our club is now saddled with. But having received £2m from Glazer for his shares and share options, and on remuneration of £1m a year, perhaps Gill has new priorities and does not feel the need to take fans legitimate views and concerns into account.

And he has done a complete about-turn himself on the matter of debt.

Gill was a member of the previous board of directors which labelled Glazer's

business plans 'aggressive' and 'potentially damaging' for the club. Gill was vociferous in his belief before the takeover that it would not be right for United to take on any debt at all - he made that very clear to SU/MUST members in an open meeting in August 2004. To go from that position to one where he is "comfortable" with over £600m of debt hanging over the club, beggars belief. He was either very wrong before, or playing footsie with the truth now.

United fans tend to agree with his previous position - we don't want to be another Leeds, but at least that club took on debt to buy players. United's debt is actually Glazer's debt to buy our club. It serves absolutely no useful purpose in building the team, quite the opposite in fact. It imposes an obstacle to that critical objective. Sir Alex Ferguson has already admitted that we can now have a squad of no more than 19 or 20 well-paid players and can't afford to compete with Chelsea financially. The debt is seriously affecting our club on the pitch as well as off it.

We strongly believe that this would never be the case under a supporter-owned club - 100% of all net profits would go to the team and the facilities, like Barcelona and Real Madrid, rather than in repaying acquisition debt. For sure, a supporter-owned United would make sure the manager could buy a player when he really needed it.

MUST Board

31 January 2006

Edited February 1, 2006 by philipl

[dave birch]

To be honest, I couldn't give a stuff about Manure, just as they didn't give a stuff when they swanned off to South America for the World Club Champs.

It's their problem, let them sort it.

[jim mk2]

In a desperate bid to raise cash for their failing investment, it would appear the Glazers are prepared to sell the Old Trafford name to Middle East sponsors in the same way that Arsenal's new ground is to be called Emirates Stadium.

A sponsorship deal worth £56 million over four years is being lined up and to appease irate United supporters, the ground would be called "Old Trafford supported by Qatar Airways", or something similar.

Now, I would not like to see Ewood Park renamed for historical and sentimental reasons but in the cut-throat Premiership all avenues for additional revenue should be explored. So how about it for Ewood.... the Tommy Ball Stadium ?

[Hughesy]

I think the Glazers will make a great success at United no matter how much debt they have taken on.

The stadium is set to increase by 7,000 from next season.

They are expected to announce a huge shirt sponsorship deal soon with the likes of 02, Sony, Google & other huge companies interested.

And now talking of taking on another £50 million + for the naming rights to thier stadium.

Also the Glaziers have their other company in the Tampa Bay which im sure will make them money and if necessary they could sell off.

[RevidgeBlue]

Have to disagree.

Don't want to give them the Midas touch by predicting "they're buggered" but they certainly appear to be buggered from the figures quoted above.

There seems to be no way they can meet their liabilities unless they can manage to tap into previously undiscovered levels of income.

Glazer must surely be depending on the break up of collective Premiership bargaining of media rights.

Which might happen I suppose. But it's up to the fifteen or so clubs who would be severely disadvantaged to vehemently oppose that.

[philipl]

I agree with Revidge- the Glazers are either playing junior partner to Berlusconi in cobbling some @#/?ised version of the NFL (which will become public after the Italian General Elections) or they are stuffed.

Evidence that they are stuffed is that all the big brand names Hughesy mentioned are reported to be giving the Glazers the cold shoulder, the Etihad deal is worth half the deal Arsenal have done with Emirates if it is only £56m and the gaps are beginning to appear in the red plastic seats BEFORE the prices start rising.

It is one thing to pay up for the good of your club but being asked to cough up double or triple the rate of inflation (if they are lucky) to pay for somebody you didn't want in the first place to take over your club is another matter altogether.

We have often commented about the fickleness of the glory seekers who came to Ewood.

Well what are 10, 20, 50% of the Manc supporters other than glory seekers?

Come on Wigan!!!

Putting emotion to one side, the politics of a Euro Soccer NFL (lets call it the EFL) are tricky to say the least.

Would Real Madrid or Barcelona play in Berlusconi's creation given that their funding/raison d'etre is very much about unfinished Spanish regional politics?

Or Inter Milan or Juventus? No, I don't think they would be junior partners in Berlusconi's creation either so Italian domestic issues could easily screw it.

Would the American brands withstand the sort of consumer boycott supporters organisations across Europe could mount? (only one of Pepsi or Coke could get the rights- the "winner" could easily be the one who under bid if they are smart and do a deal with the supporters)

The G14 is anachronistic in its membership (Leverkusen, the equivalent of West Brom, are members and the Old Firm have not got a prayer of being admitted)

If membership were dictated in terms of economic power, around half the EFL clubs would be English. If that doesn't happen, the likes of Spurs, Villa, Everton, Citeh and the FS 'toon show are going to be in a murderous mood.

You might take one Glasgow franchise into it......

Abramovich has no political interest in wrecking the English League structure and

is not even a G14 member. He is the true giant and he is squeezing one Manc ball on the field and you can be absolutely certain he and Kenyon will very happily squeeze the Manc's other ball in the commercial competition.

FIFA and UEFA would have opinions. Although there is weighted voting, UEFA now

has some 50 Associations and if you look at how the competitions are all being organised- European Nations, Champions League, UEFA, especially the reformed Intertoto- they all are structured to give the little boys a chance. 44 or so National Associations in Europe are not going to vote for permanent exclusion.

If you open the door theoretically for Sliema Wanderers (there is a Maltese who is one of the most senior guys in UEFA), you also open the door for the Mancs to be relegated from the new competition and that is the one risk factor the Glazers DO NOT want in selling their plan to American Investors for whom big guys doing badly is the norm in the NFL.

Not even Blast Sepper is going to be so stupid as to set up a club competition in competition to UEFA in the way the FA screwed the Football League in setting up the Premiership- is he? Fortunately, the club competitions outside Europe are so weak qualitatively (everywhere except South America) or financially (South America for the time being) that an idea of a true World Soccer Franchise seems very very remote and that would have to be the price of FIFA involvement.

The true litmus test could be: would 14 or more Prem chairmen vote for Watford to be members of the Premiership at the expense of expelling the Mancs? Perhaps BRISA should tell JW they would be solidly behaind him voting for the retention of the present structures.

One final hypothesis- the EFL is announced as starting in 2007/8 and will take the top four Premiership clubs in 2006/7. Suppose Rovers come fourth.....

Edited February 8, 2006 by philipl

[AggyBlue]

One final hypothesis- the EFL is announced as starting in 2007/8 and will take the top four Premiership clubs in 2006/7. Suppose Rovers come fourth.....

382569[/snapback]

They'd change the rules to exclude us

[blue phil]

If membership were dictated in terms of economic power, around half the EFL clubs would be English. If that doesn't happen, the likes of Spurs, Villa, Everton, Citeh and the FS 'toon show are going to be in a murderous mood.

382569[/snapback]

If I was a supporter of any of these teams I would be praying NOT to be included in any Euro league . Much better to have a realistic chance of winning something in the English league than play a bit part in a Euro league that could never aspire to the history and traditions that our leagues take for granted .

Let the big clubs go ; they'd be back cap in hand within 3 or 4 years and hold a fraction of the bargaining power they now hold .

[BRFC4EVA]

You live by the sword, you die by the sword. Thats all im gona say on the matter.

[thenodrog]

They'd change the rules to exclude us

382576[/snapback]

No need for extreme measures like that Aggy........they'd just award our last game of the season to Mark Halsey!

[cn174]

The stadium is set to increase by 7,000 from next season.

382549[/snapback]

They might not fill them all though. Not so much in the league, but in the cups - not even the champions league, have they been selling out. And there's a talk of a massive price hike this season too.

[Flopsy]

No need for extreme measures like that Aggy........they'd just award our last game of the season to Mark Halsey!

382724[/snapback]

Harsh.

but made me grin

[BlueMonday]

One things for sure,

the game we love is chaging rapidly.

Hope we survive !