[Archived] End Of Manc Dominance?

[thenodrog]

Glazers to take £600m out of Man U in 7 years under the bond structure

Not even Man U can carry parasytes that big.

'Parasites'? What a horrible word (even when it's spelt correctly ). I much prefer the term 'overseas investors'.

Whats wrong with investing money and making a big return on it? Bloody good business I call it. In fact I wish I'd thought of it first! The Glasiers will milk the MU cash cow for all it's worth and then pass it all on to some Ayrab on a 'gain lots of western kudos trip' who possesses more money than sense.

They are all just like us..... they couldn't give a flying flook for the mancs. After all why on earth should they?

[RevidgeBlue]

So you buy a bond for 50k - what do you get back? Is it 9% interest per year, over 7 years?

Not sure - it said 7% p.a. in the Sun so of course that must be right.

Either figure seems very high, it's difficult to see how they could guarantee making the interest payments if say they didn't make the Champions League.

Perhaps the interest payments are dependent on a certain level of profit being made - without reading the small print I can't say and I don't think I'd like to invest even if I had the money.

[philipl]

Now we get the full picture. They made an £80m profit on transfers and even so debts rose by £17m to £716m If there were an icon of a toilet, I would post it here.

What is happening now is there is a road show presenting the Manc bond. The folks selling will be asking how much institutions would take at 7%, 8%, 9% interest and so on. When they get a feel for the apetite or otherwise for this junk (it carries a serious risk of not being repaid on time), the banks selling it will narrow down the pricing range so that at some point they will announce a rate of interest at which they are confident they can get it away at.

[Hughesy]

According to the times they have managed to sell the £500m worth of bonds....

Anouncement expected to the markets when New York opens

50 investors all at 9% interest rate. Interest will be paid quarterly!

Also they now have new shirt & airplane deals

"United have signed a 3½-year sponsorship deal with Turkish Airlines, which will replace Air Asia as the team’s official carrier"

Shirt deal worth £80m to them!

[philipl]

From the BBC- Some interesting reading in the Manchester United programme ahead of their game with Hull, where boss Sir Alex Ferguson has made an impassioned plea for Red Devils fans to try to quell their unhappiness about the club's financial situation after their debts were revealed to have risen to £716m. Ferguson said: "We mustn't allow the situation to be divisive. We could be perceived as being split which I believe would be harmful and inaccurate."

In otherwords, the Glazers are bricking themselves.

It looks like they have only got the bond away at the very top price- 8.75% to 9%. For a seven year bond, that is pretty enormous in this market and prices in about a 50% risk of there being difficulty of the principle being repaid.

Several numbers are being bandied around but it appears the Glazers are planning to take north of £100m out of the club this year to try to staunch the haemoraging by the 14% to 17% PIK loans plus of course the £45m interest cost on the new bond and the interest on the £215m of debt not being refinanced by the bond plus all the hefty fees of perhaps as much as £50m for arranging and selling the bond and settling repayment of existing debts.

The upshot is that the Mancs and Glazers have bought time but the Glazers' ownership means the Mancs have to be successful every year or else the weight of servicing costs will rapidly sink the club. No doubt there will be some money for transfer market dabbling but the odds are that RFW will see as much back from the sale of Rooney as he saw from the sale of Ronaldo.

[Mattyblue]

From Red Cafe

http://www.redcafe.net/f6/green-gold-till-club-sold-283255/index12.html

I like the idea of a joined up effort with Liverpool. They are the only other club in the UK with our heritage, class and history and being our biggest rivalry and enemy also makes them in a sense our greatest ally in this instance. It would be great for the clubs fans to collaborate over this issue IMHO.'

The arrogance of it, lording it over football for years, dominating the media and attracting k***heads the nation over who should be supporting their local teams.

Oh and very ‘classy’ to chant about the Munich and Hillsborough Disasters.

Hope they both go bankrupt, it shouldn’t matter to the glory hunters as there is always Arsenal and Chelsea.

[philipl]

The headline cost of the bond is £54m- £15m in underwriting and £39m in REPAYMENT fees for loans being redeemed.

To put that number in context- it is £4m more than Rovers turn over last season.

And it doesn't include arrangement fees, sales commission, marketing costs or legal and accounting fees. I will revise my estimate cost of the bond to more than £70m.

In fact, the Ronaldo fee has probably all gone on the cost of rescheduling the Glazer debts- not repaying them or even paying any interest. The net effect of the bond will not enable the interest costs to go down (they were forced to repay the low interest charging senior bank debt) but simply to enable the Glazers to remain in control and give them the freedom to take £130m out of the Mancs next year to finance their private debts taken on when they bought the Mancs.

Take Rooney out and they drew 0-0 with Hull yesterday.

[S15]

Take Rooney out and they drew 0-0 with Hull yesterday.

There's the belting one liner, cheers Phil.

[PAFELL]

The headline cost of the bond is £54m- £15m in underwriting and £39m in REPAYMENT fees for loans being redeemed.

To put that number in context- it is £4m more than Rovers turn over last season.

And it doesn't include arrangement fees, sales commission, marketing costs or legal and accounting fees. I will revise my estimate cost of the bond to more than £70m.

In fact, the Ronaldo fee has probably all gone on the cost of rescheduling the Glazer debts- not repaying them or even paying any interest. The net effect of the bond will not enable the interest costs to go down (they were forced to repay the low interest charging senior bank debt) but simply to enable the Glazers to remain in control and give them the freedom to take £130m out of the Mancs next year to finance their private debts taken on when they bought the Mancs.

Take Rooney out and they drew 0-0 with Hull yesterday.

So basically they are still up the creek without a paddle. Also the debt is so huge nobody would want to take them over.

[Hughesy]

So basically they are still up the creek without a paddle. Also the debt is so huge nobody would want to take them over.

Are you nuts?!

Many a wealthy business man would want them...especially the arabs.

£1bn wouldnt put many of them off!

[thenodrog]

Are you nuts?!

Many a wealthy business man would want them...especially the arabs.

£1bn wouldnt put many of them off!

Have you heard of anybody bidding to buy MU off the Glasers? If not something must be putting all those 'many' arabs.

No one needs a club to actually put the 'For Sale' signs up to make an offer to buy do they?

[philipl]

Are you nuts?!

Many a wealthy business man would want them...especially the arabs.

£1bn wouldnt put many of them off!

You are nuts.

Do you know how much £100,000, or £1,000,000 or £10,000,000 or £100,000,000 or £1,000,000,000 buys you or how many people there are with each of those differing wealth levels?

[Hughesy]

You are nuts.

Do you know how much £100,000, or £1,000,000 or £10,000,000 or £100,000,000 or £1,000,000,000 buys you or how many people there are with each of those differing wealth levels?

Yes I know that, I can see all the Zero's now thanks to you

Go on then Anorak...how many people have £1bn?

[PAFELL]

Are you nuts?!

Many a wealthy business man would want them...especially the arabs.

£1bn wouldnt put many of them off!

Well I find it very strange that there has been interest in Liverpool, who also have a lot of debt but not man u. Neither club is up for sale - yet not one oerson has expresse an interest in taking man u over. I suggest that is because the Glaziers - because of the debt / interest on the same - have made it more or less impossible for anybody to consider taking them over. This bond issue is only like putting a bit of blue tac on a cracked wall. That debt has paid eventually - even if it means that every single asset that the club has is sold to do so. At anytime, I suppose the banks could say to man u 'we will not lend you a penny until you pay back the debt'. Then comes the sale and everything is up for grabs.

[ABBEY]

Yes I know that, I can see all the Zero's now thanks to you

Go on then Anorak...how many people have £1bn?

bloody hell is something you dont know...1203 25 jan 2010 ,for the first time in brfcs history ,theres actually something hughesy isnt the expert at.

[Hughesy]

bloody hell is something you dont know...1203 25 jan 2010 ,for the first time in brfcs history ,theres actually something hughesy isnt the expert at.

At 13:18 on Jan the 25th 2010 we are still waiting for something ABBEY isnt the expert at!! Zzzzzzzam!

[philipl]

Yes I know that, I can see all the Zero's now thanks to you

Go on then Anorak...how many people have £1bn?

I will say this again, you are probably talking about 100 people in the world who have a £1bn they can wazz up the wall. And most are not the sorts to be remotely interested in having the publicity that owning the Mancs gets you.

As for the Liverpool point, there is a huge difference between the £1bn+ needed to winkle the Glazers out of OT and the £300m or so which has not yet pushed the Americans out of Liverpool. To all extents and purposes, Liverpool and the Mancs are in effect the same product. The fact that Liverpool hasn't been sold tells you just how difficult it will be to sort out the Glazers.

[Hughesy]

Quick question - taking out the debt payments/ interest, what does Man United make in profit a year?

[grizfoot]

It looks like philipl's oracle about the financial mess at Man Utd might indeed be coming true.

Quick question - taking out the debt payments/ interest, what does Man United make in profit a year?

According to this (Guardian article) in 2009 they paid out £41.9m in interest which would have meant they'd have made a profit of £90.1m if they didn't have to pay the interest payments. Although it's important to remember that £80m of that profit came from the sale of Ronaldo.

[Hughesy]

Taken from that article....

2009: £91.3m.

2008: £80.4m

So whilst the Ronaldo thing had an affect...what would it normally be around Philip, £70-80m a year profit?

[philipl]

There is no normal because the Glazers are hoiking the prices every year.

You could argue that the Man U economy is a microcosm of the global economy- the ordinary fan being shafted to pay the rich bankers.

[Hughesy]

Ok then - as it stands....if no debts & £0 on the transfer difference - what profit do they make?!

[thenodrog]

Will the renewing of Rooneys contract be a pre-cursor to putting an increased price on his head? I seem to think something like this was done with Ronaldo but I could easily be mistaken.

Fact is that never mind the interest payment within the next 12 months their stalwarts are on their way out. MU will need to find the wherewithal to replace Neville, Scholes and Giggs with possibly a slightly longer stay of execution on Van de Sarr, Ferdinand and Hargreaves.

Wont be cheap will it? And if they don't replace with similar or better then a top 4 spot might be as tough for them as it is for Liverpool. And if they should miss that.......

Happy days eh?

Ok then - as it stands....if no debts & £0 on the transfer difference - what profit do they make?!

And how much will the Glasers take? And how do you expect Philip to know that? My guess is that the Glasers are now in serious snatchback mode.

[philipl]

Yes they are in snatch back mode- £130m in the next 12 months according to the prospectus against which the Glazers sold their £500m of debt.

If you look at MUFC on its own, then

Profits £48m

Profit on player trading £80m

Loss without transfers £32m

Interest payment £42m

Profit on £278m turnover without interest and transfers was therefore a miserable £10m which is breathtakingly small.

However, you have to remember that MUFC are a wholly-owned subsidiary of Red Football which is the company the Glazers own. Throughout their ownership, Glazers have been shuffling debts and bits of business between the two companies so that is a reason why it is difficult to say what the true profitability of MUFC is. And they stick prices up 12% every year as well remember.

Add the interest paid by both MUFC and Red Football together and that is when you get to the horrific figures of:

2009: £91.3m.

2008: £80.4m

There is now yet another company involved- MU Finance which issued the bonds secured against the assets of MUFC which in turn lost prized assets like Carrington so the Glazers can do financing deals on them separately.

As 'drog points out, Rooney is getting a new deal just like Ronaldo did before he was sold. MUFC don't have the £100m++ needed to buy CL winning or PL winning replacements for their pensioners. Unless Ferguson's next signings/youngsters turn out as well his 1993-5 kids and his 2005ish signings, the Glazer pack of cards will fall as there simply isn't the cash needed to compete at the highest level. Boy are the Glazers lucky that the Americans at Liverpool have similarly hanstrung that club albeit on a smaller scale but by 2017 when all the Glazer bonds have to be repaid the likely financial muscle of Chelsea, Arsenal, Spurs and City will have left the Mancs trailing in the dust.

[S15]

I'll believe when I see it philip. Basically you're saying if Britains' most successful club over the past two decades stop being successful they're in trouble.

United are the worlds biggest club. Absolutely nobody on this planet would allow that football club to go bankrupt. That's why though I respect your obvious knowledge and dedication to the subject, I cannot take a word you say seriously (with regards to the subject).

Especially words like Tottenham overtaking Manchester United.

Not in a million years.