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Manchester United Boosts Revenues And Cuts Its Debt..£439Million

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Whose debt? Was that the debt loaded onto the club to buy it in the first place and to save some Yank shopping malls?

Pity the fans. B)

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[quote name='Zanu Bob' timestamp='1329834634' post='3267249']
http://www.bbc.co.uk/news/business-17116060[b]

'Manchester United says its revenues for the last six months of 2011 increased to £175m[/b], as it released its latest financial figures.

It is an increase of £18.5m on the Old Trafford club's revenues for the same period last year.

[b]The Premier League club said debt was £439m at the end of 2011, less than the £508m reported 12 months previously.
[/b]
Last year, United said it would partially float on the Singapore Stock Exchange, but that has yet to happen.

The team, currently second to rivals Manchester City in the Premier League, are also competing in the Europa League.

Match day revenues (up from £52.4m to £54.5m), media revenue (up from £53.7m to £60.9m) and commercial revenue (up from £50.4m to £58.6m) were all ahead.

United were taken over by the Glazer family in 2005 and have had a rocky relationship with many of the fans since then over the level of debt at the club.

A buyback of bonds, sold as part of a £500m refinancing operation two years ago, helped bring down the latest debt figures.

[b]However, total operating costs - up from £96.9m to £110.8m - and net player capital expenditure - up from £11.7m to £47.9m - both rose.
[/b]
The latter's rise was due to a summer outlay on players David de Gea, Ashley Young and Phil Jones, as manager Sir Alex Ferguson set about freshening up his team.

Other figures show a bank balance of £50.9m and a £10.4m rise in general capital expenditure, mainly due to upgrading hospitality areas.

[b]Without the lucrative revenue streams garnered from competing in the Champions League, the club is expected to see a decline in income over the next half-year.[/b]'




tick tock tick tock.if they go pop it will be funny.

quite how they're proposing to clear that debt I don't know?
[/quote]

They do seem to be paying it down, so far, though.

However they are constantly balancing on the edge and a decline in revenue (e.g. by them dropping out of the Champions League early on as pointed out in the article) could have repercussions in the not too distant future. A bit like overindebted householders managing to make ends meet only because of incredibly low base rates.


Big clubs are not immune from the consequences of taking on too much debt as evidenced by the Glasgow Rangers situation North of the border.

Dare I say that a dose of 'austerity' is needed in terms of managing their budgets, though I'm sure we'll get scaremongering talk of the 'talent' leaving for higher pay elsewhere as with those other overpaid buffoons, the banksters.

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[quote name='!EURO!' timestamp='1329837060' post='3267291']
Whose debt? Was that the debt loaded onto the club to buy it in the first place and to save some Yank shopping malls?

Pity the fans. B)
[/quote]

Very frustrating to see the debt interest exiting the club of course, but it's still a very strong looking business.
Has AVB been sacked yet? B) Wenger looks safe as he steers Arsenal into mid-table mediocrity.

What they appear to have done is used part of the 'Ronaldo' money to cover around 20% of the bonds which save just under 10%p.a. in interest payments. I guess on balance they figure that's the best use of the cash for now.

Given the Glazer history they'll have refinanced any remaining debt by 2017 and probably on more favourable terms.

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They have nearly done it. Pare the debt down for a couple of years, and the reduction compounds quickly until it ceases to become a burden.

Good deal for the Glazers.

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[quote name='Zanu Bob' timestamp='1329845489' post='3267390']
that was the moment beyond parody when the glazers iirc,bought the club with borrowed moeny and used the club as collateral.....RK will nkow
[/quote]

I heard on the radio this evening...but it's just come out that that is exactly what that tw@t at Rangers did as well. He had previously denied it.

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[quote name='leicestersq' timestamp='1329845997' post='3267396']
They have nearly done it. Pare the debt down for a couple of years, and the reduction compounds quickly until it ceases to become a burden.

Good deal for the Glazers.
[/quote]

This is my view. I was incredibly pessimistic when the Glazers first took over but it's seriously starting to look like they might just pull this off.

A debt about 3*revenue and I would guess an asset to debt ratio of about 1. They're actually starting to look like a reasonably well run business. Not out of the woods yet, but if they can carry on like this for the next 5 years they'll be home and dry.

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[quote name='Zanu Bob' timestamp='1329834634' post='3267249']
http://www.bbc.co.uk/news/business-17116060[b]

'Manchester United says its revenues for the last six months of 2011 increased to £175m[/b], as it released its latest financial figures.

It is an increase of £18.5m on the Old Trafford club's revenues for the same period last year.

[b]The Premier League club said debt was £439m at the end of 2011, less than the £508m reported 12 months previously.
[/b]
Last year, United said it would partially float on the Singapore Stock Exchange, but that has yet to happen.

The team, currently second to rivals Manchester City in the Premier League, are also competing in the Europa League.

Match day revenues (up from £52.4m to £54.5m), media revenue (up from £53.7m to £60.9m) and commercial revenue (up from £50.4m to £58.6m) were all ahead.

United were taken over by the Glazer family in 2005 and have had a rocky relationship with many of the fans since then over the level of debt at the club.

A buyback of bonds, sold as part of a £500m refinancing operation two years ago, helped bring down the latest debt figures.

[b]However, total operating costs - up from £96.9m to £110.8m - and net player capital expenditure - up from £11.7m to £47.9m - both rose.
[/b]
The latter's rise was due to a summer outlay on players David de Gea, Ashley Young and Phil Jones, as manager Sir Alex Ferguson set about freshening up his team.

Other figures show a bank balance of £50.9m and a £10.4m rise in general capital expenditure, mainly due to upgrading hospitality areas.

[b]Without the lucrative revenue streams garnered from competing in the Champions League, the club is expected to see a decline in income over the next half-year.[/b]'




tick tock tick tock.if they go pop it will be funny.

quite how they're proposing to clear that debt I don't know?
[/quote]

By selling the club at a massive profit would be my guess, didn't they turn down an offer last year that would have enabled them to walk away with over £500m.

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Of course it will work for the glazers. Those of us who surrendered our season tickets (I held my first one as a kid on Salford in the early 80's) and helped to form FCUM were never in any doubt it would.

The problem is that the Glazers knew and were aware they had an inelastic product on their hands.

For years united, despite their fame, glamour, and latterly success were one of the cheapest clubs to watch in the country and not just the premiership.

They also had a waiting list of tens of thousands and enough one off numpties who wanted to sample the atmosphere such that the tripling of prices would have no effect on the attendance.

They are well on the way to achieving this, season tickets now cost nearly three times what they did seven years ago.

Those pricks who turn up to games with green and yellow scarves are more than willing to buy the club for glazer. Have no sympathy for them at all.

Please save sympathy for those Salford and other local men who now find themselves unable to watch their team their dads and dads dads had built and passed onto them.

Biggest collaborator of all was Sir Alex ' big socialist' ferguson. Obviously the only driver in his life was success ( and to be fair noone can ever deny his unique ability to achieve this) but I wish he'd spare us his 'primciples' on his various autobiographies.

Fine if you call them 'man ewe' and only care about winning trophies. A good number of us were there before Fergie started winning trophies and will no doubt be back when he's long gone.

As the guy in Wall Street said, "I don't go to bed with no whore and I don't wake up with no whore, that's how I live with myself" Edited by Sir Harold m

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[quote name='Zanu Bob' timestamp='1329867747' post='3267678']
wonder which bank is on the hook for that loss?
[/quote]

'Ticketus' lent the money that apparently went 'missing'.


[url="http://news.stv.tv/scotland/west-central/297894-craig-whyte-sold-rangers-season-tickets-to-ticketus-in-24m-deal/"]http://news.stv.tv/scotland/west-central/297894-craig-whyte-sold-rangers-season-tickets-to-ticketus-in-24m-deal/[/url]


Effectively he securitised future ticket sales to buy the club....just like the Glazers.

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[quote name='Zanu Bob' timestamp='1329907831' post='3267855']
thanks for the detail didn't realsie that was how it was achieved.
[/quote]
It wasnt, and they didnt. There have been no securitisations. They used various forms of financing including Pik loans and pledged the assets of the club in totality.

This is different from securitising ticket sales. Quite different in fact.

The glazer model is. We borrrow shed loads against the club in order to raise enough financing to buy the equity.

In order to finance the loans we get enough willing numpties to pay triple or quadruple what used to be paid for tickets and we use this to pay off the loans.

The fans are willingly and happily buyng the club for him.

From an objective point of view he spotted an undervalued asset, and saw an easy way to get someone else to pay for it for him, at no personal risk to himself. It was simple.

The takeover of Manchester United by Malcom Glazer has been voluntarily financed and paid for by the 60,000 season ticket holders who look resplendent in their green and gold protest colours.

The only way his mission would have failed was a fan boycott. Only 5,000 or so of us cared enough to do it. Simple really, he won, we lost.

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[quote name='Zanu Bob' timestamp='1329909192' post='3267885']
thats what I thought they did.

took a compliant banking sector too.
[/quote]

Banks make money by lending, accepting the risk that goes with it. They have all been repaid so far and it has been a good deal for them.

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[quote name='Sir Harold m' timestamp='1329909061' post='3267880']
It wasnt, and they didnt. There have been no securitisations. They used various forms of financing including Pik loans and pledged the assets of the club in totality.

This is different from securitising ticket sales. Quite different in fact.

The glazer model is. We borrrow shed loads against the club in order to raise enough financing to buy the equity.

[b]In order to finance the loans we get enough willing numpties to pay triple or quadruple what used to be paid for tickets and we use this to pay off the loans.[/b]

The fans are willingly and happily buyng the club for him.

From an objective point of view he spotted an undervalued asset, and saw an easy way to get someone else to pay for it for him, at no personal risk to himself. It was simple.

The takeover of Manchester United by Malcom Glazer has been voluntarily financed and paid for by the 60,000 season ticket holders who look resplendent in their green and gold protest colours.

[b]The only way his mission would have failed was a fan boycott. Only 5,000 or so of us cared enough to do it. Simple really, he won, we lost.[/b]
[/quote]

Agree completely re boycott. That was [i]always[/i] going to be the only way they'd have been forced sellers.

Raising ticket prices has contributed of course but it's the expansion of commercial revenues that's done it for them. That and keeping Ferguson onside. He's done what Wenger and no-one at Chelsea or Lpool have done.

Unless there's some sort of shock behind the Nevada holding co. refinancing then they're clearly home and dry. Worst case they'll float off part or refinance the bonds.*or sell Rooney and repeat the Ronaldo/bond repo trick. Edited by Red Knight

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[quote name='Zanu Bob' timestamp='1329909828' post='3267905']
qualified.
[/quote]

No need to qualify it. The risk for the bankers has now melted away, the asset looks to be much larger than the debt outstanding. That is a good place for a banker to be.

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[quote name='Sir Harold m' timestamp='1329865996' post='3267655']
Of course it will work for the glazers. Those of us who surrendered our season tickets (I held my first one as a kid on Salford in the early 80's) and helped to form FCUM were never in any doubt it would.

The problem is that the Glazers knew and were aware they had an inelastic product on their hands.

For years united, despite their fame, glamour, and latterly success were one of the cheapest clubs to watch in the country and not just the premiership.

They also had a waiting list of tens of thousands and enough one off numpties who wanted to sample the atmosphere such that the tripling of prices would have no effect on the attendance.

They are well on the way to achieving this, season tickets now cost nearly three times what they did seven years ago.

Those pricks who turn up to games with green and yellow scarves are more than willing to buy the club for glazer. Have no sympathy for them at all.

Please save sympathy for those Salford and other local men who now find themselves unable to watch their team their dads and dads dads had built and passed onto them.

Biggest collaborator of all was Sir Alex ' big socialist' ferguson. Obviously the only driver in his life was success ( and to be fair noone can ever deny his unique ability to achieve this) but I wish he'd spare us his 'primciples' on his various autobiographies.

Fine if you call them 'man ewe' and only care about winning trophies. A good number of us were there before Fergie started winning trophies and will no doubt be back when he's long gone.

As the guy in Wall Street said, "I don't go to bed with no whore and I don't wake up with no whore, that's how I live with myself"
[/quote]


Oh dear, presumably your dad didn't pass on his shares in the "club that he built". How much did he invest in shares in the club?

MUFC is a business, not a social project. Good luck building your new club and hopefully you'll make a fortune too.

:)

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[quote name='Warwick-Watcher' timestamp='1329910423' post='3267919']
Oh dear, presumably your dad didn't pass on his shares in the "club that he built". How much did he invest in shares in the club?

MUFC is a business, not a social project. Good luck building your new club and hopefully you'll make a fortune too.

:)
[/quote]
Of course he didnt pass on shares. Of course its technically business. But only in the sense that a house is an investment not a place to live.

The club will survive and no doubt the business will prosper. The sad situation is all those wjo gather collectively to delegate their self-esteem to the 'team' they support and get enjoyment from the highs and lows are now deluding themselves. Theyeve accepted the fact that its purely a business and pretend they are part of something that wonce was but is no longer. They will sing collectively about history, romance, the drama etc but they are worshipping at a house of cards. Its purely a business.

It wasnt always the case, if the 'customers' had acted as the communion they so claim to be, then they can stop the owner from treating it purely as a business, look at Barcelona, a true football club.

I have absolutely no problem with Glazer, the banks etc they did what was rationale and had no duty of care to MUFC. The 'fans' on the other hand, did, and they showed they werent up to it. I've lost something I love dearly, something I spent a fortune on (in the high tens of thousands over the years if you include travel) something I had thought was a certainty in life, a love I could pass on to my sons. I can still look at myself i the mirror in the morning and know I didnt let it happen. That's all Ive got but its enough, I can enjoy the memories of Rotterdam, Barcelona, the countless trips back home each week after I'd moved away etc all the more.


As for the comment somoene made abou increasing commercial revenue. Discretionary commercial revenue is a very very small part of the club's streams.
The bulk of reveue comes from tickets and TV. Commerical revenu includes sponsoship (the glazers have increased Uniteds no more no less than in line with all other clubs and in fact nearly blew it all with AIG), as for shirt sale and merchandise etc, the clubs makes not much more than the square root of jack all.

The largest overseas markets are in places like Thailand where virtually every short sold is a snide and gains the club nothing.

The very big cash cow for certain clubs, sorry franchises will be when a very small number break away and retain their own tv rights. This will make a few clubs very very rich (for example Uniteds £20m pa domestic TV share could easily reach £100m pa or so if they sold individually), it will also completely kill most of the clubs now in the premiership as they wont even have access to the crumbs off the table.

Ironically, if that happens, it will be debt free clubs like FC United of Manchester who will survive and most likely abosrb an awful lot of disenfranchised and angry fans so the monster will be feeding its own biggest enemy (still, thats the plan :))

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[quote name='Sir Harold m' timestamp='1329917372' post='3268060']

[b]The very big cash cow for certain clubs, sorry franchises will be when a very small number break away and retain their own tv rights. [/b]This will make a few clubs very very rich (for example Uniteds £20m pa domestic TV share could easily reach £100m pa or so if they sold individually), it will also completely kill most of the clubs now in the premiership as they wont even have access to the crumbs off the table.

Ironically, if that happens, it will be debt free clubs like FC United of Manchester who will survive and most likely abosrb an awful lot of disenfranchised and angry fans so the monster will be feeding its own biggest enemy (still, thats the plan :))
[/quote]

I am not sure that they can do that.

There was a case in Rugby Union a few years back, when England wanted to keep the money for TV rights at home, as it would have meant they took the lions share of the TV money. The other nations said no, the money should be equally shared amongst all the clubs in the competition. They argued it was the competition that was worth the money, not the team. England refused.

So the other teams in the six nations decided to play without England. England had to back down.

It would be interesting to see what would happen if the top clubs tried to pull the same stunt in football. They got away with it when the formed the premier league, garnering all the wealth for a few to the detriment of competition in football generally. Not sure that they will get away with it again. They would need to take enough teams into such a breakaway to make the competition worth following, but I cant see how they could do that. If Man Utd wanted all the money for the TV rights for their home games, would Sky or anyone else be willing to pay for those rights? Would the other clubs stand for it if Man Utd set up their own internet subscription channel? Would you want to be in a league with Man Utd if they took all the money and could buy your players if you got a team up together that could challenge them? Would it be worth watching?

I think it unlikely. There have been attempts to form a European super league in the past. They were scuppered when one team, Liverpool, broke ranks and said they wanted nothing to do with it, in effect saying that they would rather be in a domestic league without the big English clubs than a European league with them. If Man Utd went into such a league, they may find that they have backed the wrong horse and I cant see league rules allowing them back into the football league at anywhere other than right at the bottom. Entering a European super league is just too risky.

So I see plans to appropriate exclusive TV rights as a non-starter for Man Utd. I just cant see how individual clubs can keep all the tv rights and throw two fingers up to their competitors. It is the competition that is important, not the individual club, and anyone putting this to the test risks ruin.

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[quote name='Sir Harold m' timestamp='1329909061' post='3267880']
It wasnt, and they didnt. There have been no securitisations. They used various forms of financing including Pik loans and pledged the assets of the club in totality.

This is different from securitising ticket sales. Quite different in fact.

The glazer model is. We borrrow shed loads against the club in order to raise enough financing to buy the equity.

In order to finance the loans we get enough willing numpties to pay triple or quadruple what used to be paid for tickets and we use this to pay off the loans.

The fans are willingly and happily buyng the club for him.

From an objective point of view he spotted an undervalued asset, and saw an easy way to get someone else to pay for it for him, at no personal risk to himself. It was simple.

The takeover of Manchester United by Malcom Glazer has been voluntarily financed and paid for by the 60,000 season ticket holders who look resplendent in their green and gold protest colours.

The only way his mission would have failed was a fan boycott. Only 5,000 or so of us cared enough to do it. Simple really, he won, we lost.
[/quote]


You're probably right as you're closer to it and care a lot more. ;)

There was lots of coverage about it though....


[url="http://www.guardian.co.uk/football/2007/oct/26/sport.comment"]http://www.guardian....6/sport.comment[/url]


[url="http://www.telegraph.co.uk/finance/2942930/Man-Utd-seeks-500m-loan.html"]http://www.telegraph...-500m-loan.html[/url]

[quote]
It is believed that Royal Bank of Scotland is drawing up a plan that would see the club securitise future match-day revenues over a 25-year period. The Edinburgh-based bank recently undertook a similar deal for Arsenal FC. [/quote]

EDIT:

[url="http://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester_United"]http://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester_United[/url]


pik loans are 'some'. I think future ticket sales could be considered under 'assets'.


[quote]

[b]The majority of the cash used by Glazer to purchase Manchester United came in the form of loans, much of which were secured against the club's assets,[/b] incurring interest payments of over £60 million per annum. The remainder came in the form of [url="http://en.wikipedia.org/wiki/PIK_loan"]PIK loans[/url] (payment in kind loans), which were later sold to [url="http://en.wikipedia.org/wiki/Hedge_fund"]hedge funds[/url]. Manchester United is not liable for the PIKs. The PIKs are held by Red Football Joint Venture Ltd and are secured on that company's shares in Red Football Ltd (and thus the club). If they are not repaid by 2017, the Glazers will almost certainly lose all their shares in Red Football Ltd (and the club) to hedge funds. The interest on these loans rolls up at 14.25% per annum. Despite this, the Glazers did not pay down any of the PIK loans in the first five years they owned the club. In January 2010, the club carried out a successful £500 million bond issue, and as of March 2010, the PIKs stood at around £207 million.[sup][url="http://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester_United#cite_note-haemorrhage-0"][1][/url][/sup][/quote] Edited by !EURO!

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[quote name='Sir Harold m' timestamp='1329917372' post='3268060']
snip........

As for the comment somoene made abou increasing commercial revenue. Discretionary commercial revenue is a very very small part of the club's streams.
The bulk of reveue comes from tickets and TV. Commerical revenu includes sponsoship (the glazers have increased Uniteds no more no less than in line with all other clubs and in fact nearly blew it all with AIG), as for shirt sale and merchandise etc, the clubs makes not much more than the square root of jack all.

[/quote]

Commercial is larger than ticket sales now and fastest growth segment.

Hate to be pedantic and I'm sure you're familiar with Andy Green's analysis

http://andersred.blogspot.com/2012/02/manchester-united-q2-201112-results.html

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