[Archived] End Of Manc Dominance?

[PAFELL]

KD has just chucked his hat into the ring to manage Liverpool. He has been running their Academy long enough to know what there is out there.

Back to Man U and their Chief Executive is being challenged by supporters to state that no money from the club will be used to repay the Glazers' own £220m loans which are racking up interest at 16.25%. The Glazers are tough cookies but they are finding now they can run but they cannot hide.

Saw the panaroma program about man u last night. Interesting stuff - that really is a sticking time bomb moneywise. I didn't realise that Fulham were 200mil in debt until last night. Ironically, every club mentioned on that program had more debt than pompey have now.

[philipl]

Two turn-ups in Manc land.

Vidic has taken £90k a week and decided against the transfer to Real which had been arranged although I suspect the Glazers' friends could have squeezed the Spanish where it hurts to stop their interest.

On the flip side, for the first time in 20 odd years, Man U season tickets are on open sale. Renewals down dramatically, waiting list evaporated and 4,000 STs now available to anyone with more cash than taste.

[Blue blood]

On the flip side, for the first time in 20 odd years, Man U season tickets are on open sale. Renewals down dramatically, waiting list evaporated and 4,000 STs now available to anyone with more cash than taste.

Great news this.

[67splitscreen]

Even better if they from within our catchment area and still want to watch Prem football on the cheap.

Wishful thinking.

[den]

On the flip side, for the first time in 20 odd years, Man U season tickets are on open sale. Renewals down dramatically, waiting list evaporated and 4,000 STs now available to anyone with more cash than taste.

Get what you're saying Philip, but Utd will sell those pretty damn quick. 50000 st's sold to date doesn't sound too bad?

[philipl]

Get what you're saying Philip, but Utd will sell those pretty damn quick. 50000 st's sold to date doesn't sound too bad?

But it does mean the Glazers have more than halved demand- at one point they could have sold 120,000 STs.

[philipl]

Beautiful game, ugly investment

[Hughesy]

They not gone bust yet?

No money for transfers people say - yet they sign 2 young strikers for over £14m & Smalling for a further £9m!

[philipl]

They not gone bust yet?

No money for transfers people say - yet they sign 2 young strikers for over £14m & Smalling for a further £9m!

The points I am making are:

Now some £300m has gone on interest payments, not transfers or anything else useful.

Nobody has a clue as to how the debt will actually get paid off as opposed to rolled over.

The PIK loans over and above the £500m in bonds are still there and are now seriously acceleratng in cost.

Anyway Hughesy, you have got a load of ideas about how Syed can make money at Rovers- why haven't the Glazers done them already?

[Hughesy]

Anyway Hughesy, you have got a load of ideas about how Syed can make money at Rovers- why haven't the Glazers done them already?

Pre season tours in Far East/ Asia/ India - they already do

Set up academies in other countries - they already do

Hotel yes they havent done that one - possibly because thier is ALOT more competition in manchester

Rail link - they have already done....NEXT?!

[American]

As an example to what Hughsey said, they have already made a profit on Park by tours/shirt sales in Korea.

Plus they have themselves a good player.

[Exiled in Toronto]

But it does mean the Glazers have more than halved demand- at one point they could have sold 120,000 STs.

Not much use when they have a 77,000 seat stadium that would need to be completely rebuilt to fit in 120,000. They have used pricing to balance demand with supply, which is good business practice.

[ben_the_beast]

Man U already do make an absolute fortune. It just so happens all this money vanishs due to having to pay interest on their debt.

[jodrell]

Regarding the Mancs and their money making tools they are probably in the top three in the world at it, Barca and Real Madrid the others. The problem is that the Manc consumer is refusing to buy into it as long as the Glazers are in charge.

If I remember rightly that was one of the reasons why Vodaphone pulled out of the contract with them as fans were threatening to cancel their phone contracts. On the fact of reduction of S/T sales, having to pay for cup games even if you cant / don’t want to go to the games isn’t helping their cause. Plus the continual increase of ticket prices, at one time they were one of the cheapest in the P/L.

Long may it continue?

[thenodrog]

Beautiful game, ugly investment

Saed must not have read that..... or he's not as good an investor as we are being led to believe.

Anyway Hughesy, you have got a load of ideas about how Syed can make money at Rovers- why haven't the Glazers done them already?

Cos they don't own the Rovers perhaps?

[JAL]

You begin to think that these guys who are running up such huge debts in football whilst taking out the real cash, are they playing roulette with the English game as a whole in that if they collapse they will take every other football club with them if the debts continue to mount.Just a thought.

[Hughesy]

You have to love it....last night I watched Liverpool & they were discussing how Liverpool (This great, big club) where in massive debt, with the debt growing by the day! FANTASTIC NEWS!

Then today United PIK loans hit limit & recieve penalty increase...increasing interest by a further £13m a year!!!

[philipl]

Two comments:

The failure of the Glazers to deal with the PIK loans as soon as they had the chance is inexplicable other than by saying their other businesses are in such dire straits they couldn't dare cut an existing line of credit, no matter how bad it was.

I also suspect that there is a 50/50 chance that far from imploding over clashing egos, there were enough smart brains in the red knights to see that it is when and not if the Glazers crash and so why bother paying them a premium.

At some point, Liverpool's gruesome twosome will hit a brick wall at which point the Glazers are going to be all on their ownio with a mode at Liverpool of how to get rid of rubbish American ownership.

[philipl]

This Guardian piece on Glazer troubles has been posted elsewhere but it is might as well go here as well!

My reading of this:

- over half of the Glazers' mall business in the USA is in deep trouble; either already bankrupt or losing cash. Remember you go bust when you have no cash, not when you are making accounting losses. The latest economic news, particularly in America is horrific- the mall business has lots of downsides yet.

- the Glazers only have malls and Man U so essentially neither side of their business empire has any way of repaying its enormous debt in the current economic circumstances

- I think it is now obvious why the Glazers have not yet pulled that £130m cash out of Man U. They are holding that back for when the fires really start burning in their empire as they don't know which crisis hits first.

- The payment in kind debt jumps to £274m this year (remember that started as a bit over £100m!). They don't pay interest on this, just the now 16.5% interest following their breach of terms gets added to the repayment sum.

- United were hit with a penalty clause because their debts have risen to more than five times the basic profit they make.

The timing and authorship of this report is significant. I am pretty certain that the Red Knights have not disbanded and are running a guerilla campaign to hasten the Glazers' demise so that the buying price of Man U is "only" the club debt.

A very sad reflection on the Premier League that for all its wealth, the two biggest clubs are subject to economic wars of attrition to force appalling owners out- owners that the PL nodded through when they were buying the clubs with unfeasible levels of debt.

[Paul]

Philip, please explain what a "payment in kind" debt is? For me the phrase means rather than paying money for goods or services I would repay a debt through providing other goods / services to the same value. If a decorator friend paints my house I might landscape his garden in return.

I don't understand how financial borrowings can be repaid other than with money or equity - in which case "debt for equity" is the correct description?

[philipl]

Philip, please explain what a "payment in kind" debt is? For me the phrase means rather than paying money for goods or services I would repay a debt through providing other goods / services to the same value. If a decorator friend paints my house I might landscape his garden in return.

I don't understand how financial borrowings can be repaid other than with money or equity - in which case "debt for equity" is the correct description?

It is a hedge fund term.

What it means that instead of interest being paid, a credit card rate of interest is charged and added to the principle to be repaid.

The "in kind" means interest is replaced by more debt (compound) which is how the Glazers are well on their way to turning a £130m debt into a £550m debt when this instrument matures and they can no longer avoid paying it back.

Just look at those numbers and tell me is this a sensible business proposition or a desperation play by people in it up to their necks and beyond?

[dave birch]

Philip, it depends upon how much personal wealth you have. This could be one big tax deduction for the Glazer's

[philipl]

Philip, it depends upon how much personal wealth you have. This could be one big tax deduction for the Glazer's

All the available evidence suggests they are not in that sort of wealth league. Mr Ali could kiss the whole clan of them goodbye several times over.

[Paul]

It is a hedge fund term.

What it means that instead of interest being paid, a credit card rate of interest is charged and added to the principle to be repaid.

The "in kind" means interest is replaced by more debt (compound) which is how the Glazers are well on their way to turning a £130m debt into a £550m debt when this instrument matures and they can no longer avoid paying it back.

Just look at those numbers and tell me is this a sensible business proposition or a desperation play by people in it up to their necks and beyond?

Ah thank you. Compound interest I understand - and can still do!!!!! So we are talking fancy words for what I learnt as a 14 year old

Yes, of course the numbers are crazy, you and I have been singing this hymn, in different ways, for years.

[philipl]

Has Graeme Souness been surpassed by Sir Alex Ferguson when it comes to an unseen star?

The whole story behind Bebe defies belief.