• Manchester United Message Board

  • jim w jim w Jun 7, 2010 15:46 Flag

    Pre-emptive comment on Panorama

    Before all the ABUs pile-in.
    I wish we had different ownership structure, but we are where we are. This report contains the 'revelation' that US commercial property values have dipped in the recession. Wow! what news. It doesn't say what their value will be when/if the US economy recovers; probably twice what they are now. The report also makes light of the difference between the latest Forbes valuation of their Bucs franchise and their debt on that, somewhere in the order of $1bn. Clearly the Glazers face a revenue problem in the short-term until the commercial rent sector in the US recovers, but ultimately they can easily finance their outgoings by selling one of their sports franchises. Given United's global reach and profile it is the asset they must protect, so if push comes to shove they will sell up in Florida.
    As I said at the beginning its not where I would like United to be, but its not nearly as black as the BBC want to paint it.

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    • I find this a very strange discussion, Jim! All I did was to point out to 7/11 that one mustn't confuse the 2 already stated items. I've not said anything else as to whether any more or less funds were needed/required ... not yet anyway!!

      I do have some other points to make, which I hope to do in due course.

    • Forgive me if I miss your point. you said
      Don't confuse money spent on purchasing club with money put INTO the club. They've put in sweet fanny adams!
      I responded by saying that in order to maximise return on the capital employed on purchasing a business its not necessary to inject more capital unless there is a need , and I made an example of a problem with free cash.
      I think this answered your observation completely. United have absolutely no shortage of free cash I believe they have almost £150m in the bank when last reported.
      I think the problem arises because the media employ people who don't really understand the difference between a balance sheet and a P&L account. Within broad tolerances a P&L can report widely varying 'results' depending on the wishes of the Board agreed with the auditor. Depending on the desired tax position, losses or profits are 'managed' from year to year. However the balance sheet is clear, if there is enough cash for operational purposes with a good margin for 'problems' then generally speaking all is well. Operationally, United are swimming in cash.

    • I hope you appreciate that I'm well aware of what may be expected in general in the course of buying a business even though I'd argue as to whether this type of purchase is normal or not.

      The point is that your observation has nothing much to do with the statement I made that expenditure on the purchase of a business is not to be confused with money put INTO a business.

    • Generally speaking when someone employs capital buying an enterprise they look for a return on that capital, not to dilute their capital by further injections unless there are problems with cashflow etc.

    • "The only money the gnomes have put in is borrowed."

      Don't confuse money spent on purchasing club with money put INTO the club. They've put in sweet fanny adams!

    • ian , or should I say slaphead harris, congrats for Marseille winning ligue 1 title. cuts both ways ol' slaphead

    • seven , or should I say roblaw, congrats for Newcastle winning promotion .

    • Wrong again Ian yes Ronaldhino...What Barca got him for about £2 mil more.

      United could have afforded him then.

      Slapheap Judas that went to chelski...was already tapped up...so didn't want to do the deal.

      The only money the gnomes have put in is borrowed.

    • I thought Panorama was rather incoherent. The gist of it seemed to be "This is a terrible situation. Something must be done. We have no suggestion for what should be done. But do it quickly."

      It isn't clear to me what the objective complaint to the Glazers' ownership of United is. When a football club is bought it has to be either for a business reason (Glazers/United) or for a toy (Abramovich/Chelsea). Plenty of people have complained about the Chelsea model, rightly or wrongly (I think wrongly).

      If clubs are bought for business reasons then the financial justification is that they will produce an income to make a profit on the capital employed. The Glazers bought United with £800m. It doesn't make a great deal of difference whether that money came from United or other Glazer finances. It still needs United to generate a profit to pay the cost of capital. Buying a business with the business's own debt is often seen as a clever thing to do (although it may go wrong) - there is nothing wrong with it in business terms.

      To me, the complaint only appears to be that the Glazers want to run United as a business and take a profit rather than pour large amounts of money in like Abramovich. United fans may be upset about that. I see nothing that needs to be regulated against.


      • 4 Replies to Robert M
      • Robert m, so if you had a buisness you cared about and someone came in and took control by taking out loans and putting those loans on the books of that company, putting that company in massive debt, would you be very happy with that? Would that be a moral buisness deal?

      • I agree to an extent with what you say but I do feel that more of their own unmortgaged capital should have been put into united to buy them i feel their buy out was very highly leveraged
        as it seemed from what i could tell many of the mortgages taken out on US shopping mauls the cash was used as the 260 million deposit paid towards the money needed to buy united

      • As often, Robert, your comments are both sensible and balanced. If there weren't so many economically illiterate football fans, this wouldn't even be an issue worth raising. But because there are, its used by some in the media to continually wind-up supporters. Of course many would like to have someone owning their club with unlimited funds to continue to inflate transfer fees and wages, wouldn't we? Perhaps not.

      • 'When' the US economy picks up again??? You really are gullible and blind to fact and truth. You're finished, accept it and deal with it.

        Now run along and buy those season tickets.


    • Wrong again seven, remember the Ronaldhino debacle ?

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