• Manchester United Message Board

  • jim w jim w Jan 12, 2010 20:47 Flag

    Levy, you were right!

    I have had some interesting discussions on here with 'Levy' and in the main I have tried to argue that the Glazer model of financing United was not out of the ordinary and would not lead to 'crisis'.
    After reading the last set of the Holding Company's accounts I revise that position. The Operational Company ie United itself is still in splendid shape, with good cost control and loads of free cash as reflected in the Operational Profit which is easily the best in the football world.
    However the financing structure of the owners and their prediliction to pay themselves administration fees and take interest free loans etc has become too onerous. The bond will allow them more wriggle room to use some of its proceeds and more of the free cash to repay their personal liabilities of up to £200m but will still leave the operating unit with the bond dividend to pay and indeed the bond repayment within 7 years. Its clear that the only way this 'circle can be squared' is for the asset to be sold within that timescale.
    In the meantime United have a revolving credit facility of £75m to fund new transfers etc. Its not clear to me how this number is ever exceeded in the timeframe we are talking about, so yes Ferie has almost all the 'Ronaldo' fee to play with, the caveat that is now clear is that that is all he has for the next 7 years or until the Glazers sell out. No wonder he is cautious about spending it. Of course no one has directly 'lied' thay just haven't told all the truth.
    Levy , you were right all along, I apologise if my previous arguments were ever a little overly robust.

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    • Strange because I've never been on the West Ham board.

      Obrigado, corno.

    • Fact is manure are in the sh*te , and the bond issue will only prolong all your agony,s .Long live the GLAZERS.

    • Is that your escape, then, Slayer? Pretend I'm using another id, which you know I've never done, and use that as a poor excuse so you don't have to answer anything? Pathetic.

      Next thing you'll be telling me Fletcher tried to maim someone, LOL.

    • You can't engage in a serious debate slayer, unless you can find one on Google.

      You know nothing about anything, you're a copy and paste merchant, your opinions belong to other people.

    • Current rate of interest is over the 9% rate, which is what they are believed to be seeking on the bond issue. The rate on the PIK loans (currently £200m) is 14.5%. Those on this board who've argued that debt is commonplace & Ok (nothing to worry about) might be forced to rethink. Interest payments on the 2 loans total c.£80m annually. Add to this the fact that the G's paid c.25% over the odds for Utd - total market of c.£660m compared to the £880m paid on the shares acquistion.

      The statement that a further £75m is sought from banks to provide funds for SAF is close to proof that his 'no value' statement is fiddlesticks. The G's are not seeking funds to repay the PIK loans, at least not reported to be. This is the most expensive debt. So why not? Has the Ronaldo money already gone to knock a big chunk of that off last June, by way of a massive loan to the G's perhaps.

      My take at the moment is that the G's are in deep poo, and hence perhaps Utd too unless a muggins is found to buy at a silly price. Having done as well as anyone could ask last year with crowds of 75k for home gates, the net result is a £32m loss after adjusting for the extraordinary profit on Ronaldo!

      Jim, I drafted this earlier before I saw your post. Have you seen accounts with a bit more info than just the headline figures? I've been unable to reconcile the performance from results 2008 to results 2009 & the reasons as to why they are unexpectedly poor inspite of 8-10% increases in all types of revenue. Please post a link if poss - cheers.

    • Current rate of interest is over the 9% rate, which is what they are believed to be seeking on the bond issue. The rate on the PIK loans (currently £200m) is 14.5%. Those on this board who've argued that debt is commonplace & Ok (nothing to worry about) might be forced to rethink. Interest payments on the 2 loans total c.£80m annually. Add to this the fact that the G's paid c.25% over the odds for Utd - total market of c.£660m compared to the £880m paid on the shares acquistion.

      The statement that a further £75m is sought from banks to provide funds for SAF is close to proof that his 'no value' statement is fiddlesticks. The G's are not seeking funds to repay the PIK loans, at least not reported to be. This is the most expensive debt. So why not? Has the Ronaldo money already gone to knock a big chunk of that off last June, by way of a massive loan to the G's perhaps.

      My take at the moment is that the G's are in deep poo, and hence perhaps Utd too unless a muggins is found to buy at a silly price. Having done as well as anyone could ask last year with crowds of 75k for home gates, the net result is a £32m loss after adjusting for the extraordinary profit on Ronaldo!

      Jim, I drafted this earlier before I saw your post. Have you seen accounts with a bit more info than just the headline figures? I've been unable to reconcile the performance from results 2008 to results 2009 & the reasons as to why they are unexpectedly poor inspite of 8-10% increases in all types of revenue. Please post a link if poss - cheers.

      • 2 Replies to teeesspee
      • Levy is often proved right and I am truly sorry he is right again on this one. I think teeesspee gives us a good analysis of the Glazer millstone around the club's neck. I have tried to defend the situation in the past as long as the club can service the debt and fund the investments needed in players and infrastructure. These latest figures do not pass even the first tension of a stress test. We need owners with sufficient cash to bring down the debt and it is difficult to see where they might come from.

      • I the shit, now the Gs are about to borrow a further £75mil, for slur alex to buy even more sh*te! it just gets WORSE.

    • "so yes Ferie has almost all the 'Ronaldo' fee to play with, the caveat that is now clear is that that is all he has for the next 7 years or until the Glazers" ????

      jim, your conclusion is flawed and incorrect according to the latest financial statements. All proceeds from Ronny's transfer used up in the accounts.

      "Figures posted yesterday show United would have lost over £30m last year had it not been for the sale of Ronaldo - making a nonsense of Alex Ferguson's claim that the proceeds all went into a largely untouched transfer kitty."

      Full details in below link.

      http://uk.eurosport.yahoo.com/football/early-doors/article/222681/