Manchester United Season 2009/2010

[RoosterMarty]

Ah yeah mate, laugh it up?

Not sure why you felt the need to laugh at both Arsenal and Man Utd this morning, typical Tottenham antics I guess.

We managed to beat brum mate.
COYS!!!

Yes and we beat you...

Also COYS? You are in the wrong thread I think mate.

Bulldog and I will share a laugh at the end of the season when you choke a top 4 spot again though.

[smithy]

See Sir Rudolph is in trouble again for having a go at refs.
Seriously the guy is losing it big time.
Bow out whilst you still have some respect left.

[Bully]

Ah yeah mate, laugh it up?

Not sure why you felt the need to laugh at both Arsenal and Man Utd this morning, typical Tottenham antics I guess.

We managed to beat brum mate.
COYS!!!

Yes and we beat you...

Also COYS? You are in the wrong thread I think mate.

Bulldog and I will share a laugh at the end of the season when you choke a top 4 spot again though.

we beat everton 6-1 at goodison, im sure the spuds only drew. I will be laughing when the spuds dont beat us again when we play them at the lane and it will stretch our run over them in the premier league to 10 years

[devilsadvocate]

Back on topic

Utd have posted their financial results for the year:

http://www.skysports.com/story/0,19528,11661_5852894,00.html

Manchester United have reported pre-tax profits of £48.2million for the year to June 30th 2009 and have also announced plans to raise £500million.

The sale of Cristiano Ronaldo to Real Madrid for £80million in the summer was included in the profits as was the £41.9million paid out in interest on the huge loan of £509.5million used to help fund the Glazers' takeover of the club in 2005.



Some of the debt is incurring 14% interest. .

I'm not sure what school of finance the Glaziers studied at, but if you need to stoop to 14% debt financing to purchase a business, you have to question whether it's a good move.

Unbelievable.

[johntheclaret]

just to simplify the loan structure.

Glaziers borrowed more than £500m to buy Man U. Since they took over they have spent more the £155m on transfer although they have recovered £147m in selling players (including the £80m they received for Ronaldo), a deficit of £8m

Interest on the loans currently runs at £42,000 ($75,000) pre hour.

Inerest is split into two kinds. Straight forward repayments and Payment in Kind. The straight forward repayment interst is exactly that, they pay it out to the banks each year. The 14% interst that DA refers to is the Payment in Kind interest, which is simply added to the overall debt each year as it isn't repaid.

This is the worrying apsect for Man U. Without the £80m income from the sale of Ronaldo, they would have posted a loss of nearly £40m. The debt is just going t get bigger and bigger and thier ex-finance director has come out this week and said that due to the structure of the loan and the Payment in Kind interest, there is only one thing going to happen to Man U and it that they will go bust within 5 years.

This will obviously make them a target for the arabs at a knock down price.

Just try to get your heads round this........Man U are paying $75,000 per hour in interest.

[johntheclaret]

Just a footnote, Man U are trying to organise a £500m bond issue to reduce the debt.

Here's the story:

Look out Manchester City and Chelsea - Manchester United launch bond scheme to raise £500m

Manchester United have responded to Chelsea and Manchester City seeing their debts written off by launching a bid to raise £500million.
The Barclays Premier League champions intend to sell bonds worth half a billion pounds in the hope of restructuring their near-£700m debts.
United are under pressure from the likes of UEFA to tackle their financial burden, particularly after City owner Sheik Mansour followed Chelsea chief Roman Abramovich in wiping out what the clubs owe.

[devilsadvocate]

It would be brilliant to see Leeds v Utd at Elland Road in League 1.

Maybe not brilliant to see....I'd prefer to just hear about it....from all the plastic Utd fans.

[johntheclaret]

Just to put the United debt into more perspective.

The Payment in Kind (PIK) interest that is rolling up will reach £600m withing 7 years, and that is to be added to the £509m debt they already have.
Effectively, within 7 years United will be more than £1.1bn in debt and have interest payments of £100m a year. You just can't see how this can be sustained when this year they made £42m profit including the £80m they received for Ronaldo.

I guess they could sell off some of thier other assets to plug the holes short term

Rooney £50m - £70m
Berbatov £500k
Rio £10m (comes with a free set of crutches)
Giggs £3m and an oap bus pass
Vidic £6m

That'll cover the interet for one year.

[devilsadvocate]

Just to put the United debt into more perspective.

The Payment in Kind (PIK) interest that is rolling up will reach £600m withing 7 years, and that is to be added to the £509m debt they already have.
Effectively, within 7 years United will be more than £1.1bn in debt and have interest payments of £100m a year. You just can't see how this can be sustained when this year they made £42m profit including the £80m they received for Ronaldo.

I guess they could sell off some of thier other assets to plug the holes short term

Rooney £50m - £70m
Berbatov £500k
Rio £10m (comes with a free set of crutches)
Giggs £3m and an oap bus pass
Vidic £6m

That'll cover the interet for one year.

Hahahahahahaahaha, I initially read that as 500m

Although in his head, I bet that's what he believes he's worth.

LOL at the Giggs OAP call too.
Throw Scholes and Van Der Sar in that category.
Add Owen to Ferdinand with his sicknote.

Then they're left with Nani, Andersen, Carrick, Gibson and Beetroot nose flapping his arms.

[johntheclaret]

What with Man U and Liverpool both debt ridden, does that leave an opening for City to take up the mantle of Lancashire giants?

Unless some serious money comes forward to buy out Man U and Liverpool you can see the structure of the EPL chance dramatically over the next 4 or 5 seasons with Chelsea battling it out with Man City for the title and Spurs and arsenal fighting for 3rd spot (both making up the top 4)

CCC without Man U would have been unthinkable before the news today

[Swooper16]

Anything could happen within a 5 year time frame. Both Chelski and City have been bought as expensive toys – whose to say that their owners might get sick of it and sell them on the cheap and leave those clubs in a precarious position.

To be honest I struggle to get my head round a lot of the financial stuff but I am led to believe that the glazers have been proven to be pretty savvy businessmen. They bought United as a business decision & would have gone into this to make a profit by a certain time. They also own a couple of sporting Franchises in the US of A so maybe they would sell one of those to pay off some debt.

I do know however that United have faced some pretty difficult and dark times in their history and generally came out of it for the better. For all the grief United supporters cop for being plastic fans (I can never understand how an arsenal, Liverpool supporter etc in a foreign country can not be subject to the same criticism…?) they also have an army of supporters who would do anything to keep the club on the right track – although some of whom IMO went too far when they started their own club after the takeover.

[devilsadvocate]

Anything could happen within a 5 year time frame. Both Chelski and City have been bought as expensive toys – whose to say that their owners might get sick of it and sell them on the cheap and leave those clubs in a precarious position.

To be honest I struggle to get my head round a lot of the financial stuff but I am led to believe that the glazers have been proven to be pretty savvy businessmen. They bought United as a business decision & would have gone into this to make a profit by a certain time. They also own a couple of sporting Franchises in the US of A so maybe they would sell one of those to pay off some debt.

I do know however that United have faced some pretty difficult and dark times in their history and generally came out of it for the better. For all the grief United supporters cop for being plastic fans (I can never understand how an arsenal, Liverpool supporter etc in a foreign country can not be subject to the same criticism…?) they also have an army of supporters who would do anything to keep the club on the right track – although some of whom IMO went too far when they started their own club after the takeover.

Sorry mate, but you've been led astray. The Glazers bought Man U for a stupid price and funded it with (at the time - pre financial crisis) cheap debt. There is no such thing as cheap debt nowdays and per JTC's comments above, they're screwed.

It was not a sound business decision as they bought in the hope that prices would just escalate forever and a day.

They own the Tampa Bay Buccaneers, but who knows how they're doing financially.

On the plastic fans, many clubs have plastic fans and trust me, Arsenal and Chelski cop their fair amount of abouse over having pretend fans.

Arsenals are almost worse than Utd (did anyone notice how many fans were left in the ground on Saturday when the Gooners equalised in the 94th minute?) and Chelski - who cares about Chelski!

Liverpool have a lot of foreign fans, but I wouldn't say they have an army of plastic fans like Man U and Arsenal.

[RoosterMarty]

Just to put the United debt into more perspective.

The Payment in Kind (PIK) interest that is rolling up will reach £600m withing 7 years, and that is to be added to the £509m debt they already have.
Effectively, within 7 years United will be more than £1.1bn in debt and have interest payments of £100m a year. You just can't see how this can be sustained when this year they made £42m profit including the £80m they received for Ronaldo.

I guess they could sell off some of thier other assets to plug the holes short term

Rooney £50m - £70m
Berbatov £500k
Rio £10m (comes with a free set of crutches)
Giggs £3m and an oap bus pass
Vidic £6m

That'll cover the interet for one year.

Hahahahahahaahaha, I initially read that as 500m

Although in his head, I bet that's what he believes he's worth.

LOL at the Giggs OAP call too.
Throw Scholes and Van Der Sar in that category.
Add Owen to Ferdinand with his sicknote.

Then they're left with Nani, Andersen, Carrick, Gibson and Beetroot nose flapping his arms.

That team would still easily account for your mob.

[devilsadvocate]

Just to put the United debt into more perspective.

The Payment in Kind (PIK) interest that is rolling up will reach £600m withing 7 years, and that is to be added to the £509m debt they already have.
Effectively, within 7 years United will be more than £1.1bn in debt and have interest payments of £100m a year. You just can't see how this can be sustained when this year they made £42m profit including the £80m they received for Ronaldo.

I guess they could sell off some of thier other assets to plug the holes short term

Rooney £50m - £70m
Berbatov £500k
Rio £10m (comes with a free set of crutches)
Giggs £3m and an oap bus pass
Vidic £6m

That'll cover the interet for one year.

Hahahahahahaahaha, I initially read that as 500m

Although in his head, I bet that's what he believes he's worth.

LOL at the Giggs OAP call too.
Throw Scholes and Van Der Sar in that category.
Add Owen to Ferdinand with his sicknote.

Then they're left with Nani, Andersen, Carrick, Gibson and Beetroot nose flapping his arms.

That team would still easily account for your mob.

Not if they're playing in the Championship

[Bully]

i would doubt man utd would ever be back there even with their debt. it would make my day if they were in the championship again but i think pigs might fly before that happens. to big of a football club.

[devilsadvocate]

i would doubt man utd would ever be back there even with their debt. it would make my day if they were in the championship again but i think pigs might fly before that happens. to big of a football club.

Leeds?

Newcastle?

[johntheclaret]

The CCC comment was a freudian slip. It was meant to read EPL. I would put it down to a typo but somehow I don't think I'd get away it.

I wasn't suggesting they would end up in the CCC, and swooper is right, a lot of things could happen within 5 years.

The big difference between Chelski & City and Liverpool & Man U is the nature of the debt.

Abramovich and the Arab at City have both converted thier loans into shares, effectively writing off the debts. They both could do this because they are the creditors.

Man U and Liverpool are funded by bank loans and sure as cats are cats, the banks are never going to convert thier loans into shares to write off the debt. This leaves both Pool and Man U burdened with interest payments on the loans with MU in a far worse position than Liverpool (if that's possible)

I think the only way out for both clubs is for a rich benefactor to come in and bail them out. The problem is the longer they leave it, the worse the debt gets and the less attarctive both are in terms of an investment.

At least Man U are still competing for the title and still in the CL, coupled with a ground capacity almost double that of Liverpool, means they are more of an atractive proposition, but where they hell are they going to find another £80m in transfer fees to fund the debt next year without off loading Rooney. No Rooney, no Ronaldo and in two years time they will have to find another £80m, which probably means they will have to sell Rio, Vidic and two or three more to make up the shortfall.

So how competitive will Man U be then, with maybe 5 of thier top stars gone. Hmmm..... and don't forget, the following year they will have to raise £80m again. The bond issue might help keep the wolves from the door but bond holders will want a return for thier investment, albeit at a lower % rate than the club is paying now.

Let's face it, the words "Creek and paddle " come to mind.

Liverpool has a similar problem but thier debt isn't as bad (or at least that's what the current owners want you to believe) and might appear more attractive to an arab sugar daddy, but they are effectively out of the title race and now the lucrative CL. It is estimated that pool will lose up to £25m this year from thier early CL exit and there is no guarantee that they will qualify next year, so they will have to attact a buyer within a year to 18 months to avoid a similar cash crisis to Man U.

Liverpool also only have two key assets in Torres and Gerrard and should they be forced to sell these on to raise revenue, you really can't see them competing for the top honours for the foreseeable future.

Arsenal, City and Spurs must be rubbing thier hands right now

[RoosterMarty]

i would doubt man utd would ever be back there even with their debt. it would make my day if they were in the championship again but i think pigs might fly before that happens. to big of a football club.

Leeds?

Newcastle?

Both are nowhere near the size of Man Utd.

I understand where you are coming from, and those clubs believed they were too big to go down but United are one of the biggest sporting clubs on this planet.

I know you are desperate to see United relegated so Spurs might actually have a chance of getting 4th but it won't happen.

[johntheclaret]

i would doubt man utd would ever be back there even with their debt. it would make my day if they were in the championship again but i think pigs might fly before that happens. to big of a football club.

Leeds?

Newcastle?

Both are nowhere near the size of Man Utd.

I understand where you are coming from, and those clubs believed they were too big to go down but United are one of the biggest sporting clubs on this planet.

I know you are desperate to see United relegated so Spurs might actually have a chance of getting 4th but it won't happen.

Same applies to Nottm forrest to marty, when they went down. Next minute they are in the third tier.

[johntheclaret]

i would doubt man utd would ever be back there even with their debt. it would make my day if they were in the championship again but i think pigs might fly before that happens. to big of a football club.

Leeds?

Newcastle?

Both are nowhere near the size of Man Utd.

I understand where you are coming from, and those clubs believed they were too big to go down but United are one of the biggest sporting clubs on this planet.

I know you are desperate to see United relegated so Spurs might actually have a chance of getting 4th but it won't happen.

Turnover last year of £245m including £80m from the Ronaldo sale. I think they have a long way to go to get as big as some of the US grid iron clubs or even some of the European soccer teams. But it isn't about size it's about debt.