Bayern Munich president criticises Glazers

GCHQ

I'm not getting into yet another in depth discussion about the Ronaldo money and net spend figures. Even I'm bored to death of that. At the end of the day if you can't appreciate how much that £80m fee distorts the net spend calculation under the Glazers ownership then god help you quite frankly. In gross terms the cash expenditure on players under the Glazers is over £250m.

I've already explained how those interest payments and the debt have been of benefit to us. Read my posts.

Commadus

Here is a summary of GCHQ arguments:

1) The Glazers brought a new paradigm in the way United market themselves which raised sales. There is some merit to this - a rising tide lifts all boats but United has risen higher than most.

2) The debt mountain re-focused slack management under the PLC through the knowledge that United must pursue more aggressive sales strategy. BULLSHIT Argument - this would mean every club should load up with debt which will incentivise people to work harder.

3) United are better off paying interest than tax. BULLSHIT. United have control over how much profit they declare and thus how much tax and dividends they want to issue. They have no control over how much interest they pay unless they go through another ound of expensive refinancing.

4) Estimate United costs and sales if they remained a PLC and compare that to United as a private conern loaded with debt. Add loads of conjecture and hypocrisy and GCHQ draws a conclusion than all businesses should load up with debt as its tax efficient and focuses managment.

Rinse and repeat.

Sir A1ex

Spoken like a true [**INSERT DESCRIPTION HERE**]

No, it's the system and the Glazers. You make it sound like the Glazers are the unwitting victims of circumstance. Are they only following orders?

Sir A1ex

I totally agree that there's no point in giong over the same old "Ronaldo money" thing. But I am still waiting to hear you explain your new take on the situation, which puts the whole net spend thing back at the centre of arguments.

As I understand your point, even with the £80m we gained from selling Ronaldo, under the PLC we would have had to either sell more players or buy fewer compared to those we have under the Glazers, right?
Surely even if the PLC were the incompetent muppets you make out, the fortunate windfall of £80m would have meant we could still have brough in the likes of Jones, de Gea etc?
Would we really have been so skint that the £80m wasn't enough to avoid cutting squad investment to pretty much zero? Would Rooney have had to go too?

Sir A1ex

There's a name for that sort of ludicrous argument...

Hey GCHQ, why not give me all your savings and psoessions? The relative poverty you find yourself in would no doubt incentivise you to work harder and earn more money, thus benefiting you financially in the long run.

Neo_Mufc

But that's my point exactly justifying lower net spends than those teams is easy when you have so much success in a short period of time.

What happens when we have a few seasons of only a carling cup trophy ? Will it be time to get the ol green and gold scarf out again? I believe the business plan works but won't ever warm to the fans who in an idealistic scenario would have preferred a buyout without debt.

Everything is ok at the moment, we are competitive domestically and in Europe. I don't personally feel the Glazers will want to stay in charge when Ferguson's gone but I could be hugely wrong.

The thing is if the trophies are there the majority of fans ignore the debt and the glazers win if they're not then it's protest time. We'll probably have a better indication of how the clubs going in a few years because a change of manager will have a huge effect on our club.

Commadus

The absurdity of GCHQ arguments is that he never once mentions the affects of onfield performance on commercial revenue increase as if it was done in absentia.

In fact we should fine Rooney £200k a week and see how he performs -it will focus his mind, body and spirit. In fact why dont we load more debt onto United as that would make us even ore focused. So yes we need more debt not less!

Sir A1ex

Imagine if we went bankrupt - the effect on our finances would be fantastic, we'd surely be the richest club in the world!

Sir A1ex

One other question for GCHQ...

How does all this new information about how the PLC were shit at making money, and not prepared to spend what little they did earn, square with the distinct memory I have of us breaking the British transfer record three times under the PLC?
As of the day of the takeover, were we not responsbile the three most expensive signings in British football in Rio, Veron and Rooney?

I don't get it.

Commadus

I really think GCHQ is onto something. Imagine we are under £1bn in debt. Our fans will be singing their hearts out each game as they may fear its their last at United as we will always be teetering on the brink of bankruptcy. Rooney wont be spening time going our or Rio tweeting. In fact Vidic said he would play in cructhes.

Forget Tom Peters, Drucker, Porter etc we have a new Management Guru called GCHQ his theory so simple yet so powerful- load the fuckers with debt and watch them perform.

Redjazz

Oh what a tangled web we weave...

Yet you decided to use your projected pre exceptional EBITDA for 2011 in your calculation. A prediction you made in May 2011.

So when you say (in June 2011): "I think in reality revenue and profit under the PLC would have currently been c. £20m lower than it is under the Glazers"you were really referring to the previous trading year (which ended 11 months before the date of your statement). I guess that's an easy mistake to make.

Presumably the same error is at play when you allude to the £20m negative impact in the "current year". Right?

And when you refer, in the same post, to the negative impact of the Glazer ownership "over the last 6 years", you were mistaken- you meant to say "the last 5 years" as you couldn't possibly know the 2011 YE results (though you had predicted the key results a month earlier).

Hmmm!

Capisco.

GCHQ

Jazz,

£20m extra revenue thanks to the Glazers in 2009/10 (leading to no overall financial affect when compared to the PLC)

£35m in 10/11 (overall slight benefit when compared to the PLC)

£50m in 11/12 (overall substantial benefit when compared to the PLC)

I think those estimates are extremely reasonable by the way. I could really be much more aggressive (I've stated earlier in this thread that a £50m estimate for 10/11 can be justified).

That is my position. I don't have to justify some vague remarks made over six months ago in what was undoubtedly a lengthy discussion. I think I went for the £20m figure as an example of how the Glazer model was costing the club nothing compared to the PLC. In the same way I used an estimate of £50m of additional revenue earlier in this thread to demonstrate how the Glazers are now providing a substantial financial benefit to the club.

As the Glazer-inspired commercial revenue increases, so too does the Glazers net contribution to the club compared to the old PLC. It's a very simple relationship to comprehend but I'll make you a little graph if it would help.

GCHQ

Go and read a book on leveraged buy-outs. As much as I'd love to take the credit for this theory, in reality it's been around for decades.

UnofficialDevil

In 2 days the transfer window will close. For a team that has had such terrible luck with injuries, a defense and midfield in need of help,the only addition to our squad has been the retired for 6 months Paul Scholes.Plus the club’s wage bill has now been further reduced by the sale of Gibson and the loaning of Macheda and Joshua King.

Nice one Glasers.

Jimy_Hills_Chin

Having these wonderful commercial revenues whilst having these massive interest payments is like having a nine inch cock but being impotent.

Sir A1ex

Hmm, long enough for you to have tried to understand it, you'd have thought.

I'm a bit worried now though... I believe you've said the debt will be pretty much cleared off in a few years,right? Presumably at that point the Glazers will slip into a de-motivated malaise and our commercial revenue will plummet?

Sir A1ex

Cold_Boy

Perfect analogy.

Wan

De Gea, Lindegaard
Rafael, Fabio, Evra
Rio, Vida, Evans, Smalling, Jones

Nani, Valencia, Young, Park
Carrick, Ando, Cleverley, Giggs, Fletcher (+Scholes this season), Pogba

Rooney, Welbeck, Hernandez, Berbatov, Owen

How many more players do we need? We can only register 25 players over the age of 21..

Commadus

Is that your best response. You really have caught yourself out with your defence of the Glazers which discredits your so called impartial position.

The Glazers have indicated their desire to relist and clear the debt but using your tortured logic it would mean they would lose all motivation to develop the business.

Commadus

[QUOTE=Sir A1ex;11097801]Hmm, long enough for you to have tried to understand it, you'd have thought.

I'm a bit worried now though... I believe you've said the debt will be pretty much cleared off in a few years,right? Presumably at that point the Glazers will slip into a de-motivated malaise and our commercial revenue will plummet?[/QUOTE]

Twigginater

We don't need anyone else though. In a few weeks when everyone is fit again, we'll be talking about how good our bench is. The worst of the injuries is almost over now hopefully.

devilish

That's the reason why we're demolishing every side we're playing against. If we don't take the treble this year.....

On a serious note we have a good side but its about time that we take the red tinted glasses once and for all and acknowledge our weaknesses. CM is weak, the Da Silva twins AND Rio are injury prone, our wage structure is acting as a bit of straight jacket for us, Cleverley is yet to young to judge, our most promising youth prospects may be cunts of the highest order, Bebe, Owen and Diouf should pay their entrance at OT (as paying fans), Berba may soon be leaving and Anderson has more of a chance of becoming the next OShea (ie decent player whose good to have around) then the next Paul Scholes.

Twigginater

Errrm, we have been demolishing most teams we play, hence us having one of the best Prem Seasons ever so far.

People like you only focus on the negatives, instead of looking at how well the club have done this season,dealing with incredibly unlucky injuries, and some poor decisions against us, yet still doing well in the prem, and knocking out some big teams in cups.

marchi-91

Whoever said our club needed investment in defense is extremely foolish. We have 4 of the best center backs in england, one that seems to be able to play all over the park and 3 very solid wingers. One who if can stay injury free, will be one of the best in the world in his position.

devilish

If u read my posts well ull notice ive always said that we got a good side and we made some shrewd signings in the summer. However im also the first person that this side is overrated by many of the fans. we got weaknesses that had been neglected 4 to long and cant be addressed by calling players out of retirement or insist on players who struggle to play 3 games at a row without getting injured. I noticed that u avoided in acknowledging a large part of my previous post. I guess those arguments may put top reds in dofficulty

devilish

On paper i agree with u but football is not done on paper but on the pitch. We got 8 defenders 3 of whom are injury prone. No wonder we end up with wingers and midfielders covering the defensive roles

KingMinger22

It's hilarious that GChQ is trying to remove the Ronaldo money from our transfer spending and receipts. How on earth can that figure 'distort' our net spend? Gross spend is absolutely useless when judging how much we have reinvested from our revenues from fans into the development of the first team.

marchi-91

He's not trying to get rid of it, he's trying to imply the context of the deal and the fact that it happens very very rarely that you have a player going for that amount of money.

robertsoncrusoe

I suppose you are figuring that when they make the float and pull in the 600million that the remaining debt will be paid off?

Rams

This thread makes me laugh. GCHQ is about the only one who giving well considered factually based arguments about yet he's the one who's being ridiculed. If you want to have a debate with GCHQ about the Glazers then at least have the decency to the same rather than just spouting emotional bullshit such as "it saddens me when a United supporter is backing the Glazers" because at the moment GCHQ is making you all look like fools.

Rams

devlish, with all due respect but you have been spouting this bullshit every season since you have been posting in this forum.

devilish

Wow i've got guys keeping track of what I say. That's an honor, I mean, Ill probably struggle to remember what I've written last week let alone keeping track of 8-9yrs of posting. You do take this forum seriously don't you?

Anyway if we want to stick to decency and the spirit of discussion, you can discuss what that post. If not.....is it really worth answering you back? Your say.

Rams

Mate, I've been reading your posts for the last 10 years or what ever it is, I know what you are like on here. I still even remember your Maltese Fergie hairdryer treatment posts.

Rood

The best decision the Glazers ever took was to give full control of the football side of the club to Fergie, he has alot more influence than he ever had under the PLC - its no coincidence that the past 5 years have been the most successful in the history of the club

I dont agree with your assesment of the level of risk - our revenue streams we far more established even 5 years ago than Liverpool are now! That is why we have been able to manage our debt whereas they failed.


the glazers have already shown that they are willing to cash in some of their shares by preparing the floatation, will they exit completely before Fergie retires? It is a definite possibility
Change of manager will of course have a huge effect on the club, as it would regardless of who was in charge.

Rams

Some how I don't see them leaving the club anytime soon. It just wouldn't make sense all the effort being spent at the club commercially. The one thing they surely have done right is leaving the business with the business people and the football to the football people.
I'm certainly not happy with the way they put the debt in the club but you cannot deny they have always had a long term financial plan well worked out. As far as I am aware at the moment they may have the debt, but the club is worth approx 2x the amount of debt and the club is making a healthy profit every year. Not bad in this day & age eh?!

finneh

Unfortunately turning around and using random made-up figures based on nothing more than a hunch to back up a "factually based argument" is actually not a factual based argument at all.

A far more objective commentator would post the increases of our financial rivals' commercial revenues (Barcelona, Madrid, Liverpool, Bayern) and use this as a gauge as to how successful the Glazer's have been. It is common knowledge that the commercial sector boom has occurred in the last 6-7 years. The Glazer's did what any competent owner would do, increase revenues within their control (firstly raising ticket prices until supply met demand, then looking at other football clubs and increasing Commercial income).

It's hardly the rocket science it is being made out to be by some. The US and Asian markets have boomed and only a truly incompetent party would fail to capitalise on this.

I agree with this. But again giving them huge credit for doing something that only an incompetent owner would not do is a bit of a stretch. Hell even Man City's owners have realised that leaving the manager to manage is the right idea.

Our revenue streams were far more established I agree, but the level of debt placed upon us was far, far higher. I still maintain however that their failing to qualify for the Champions League for a season spelt the beginning of the end. Again if Fergie retired as he planned lets not pretend this couldn't have easily happened to us for a few seasons.

I dread to think of the loss in TV money, matchday income and commercial partnerships if this did occur. In my opinion it could well have been terminal.

Rams

Go on then, back your words up instead of coming out with bold statements without actually providing any foundations for your arguments what so ever. I'm all ears mate, I'm trying to keep as an open mind as much as possible either way.

finneh

I'm merely pointing out that GCHQ has not posted anything factual at all in these last few posts. So to say that his factual based argument is making anyone or everyone look foolish is bizarre (you can look at a variety of financial blogs on the internet that are far more knowledgeable in this field than I if you were after an unbiased retort). It is merely a person with a good knowledge of accountancy debating several people with no real knowledge of accountancy (save redjazz), but with common sense.

One could argue that the only difference between the Commercial revenue generated by the Glazers and that which would have been generated by the PLC is that the Glazers took an early payment on the Aon deal to ease potential cash flow problems.

This wouldn't be an outrageous point of view given than Man Utd were at the forefront of clubs in the revenue department and any idiot could see that Commercial revenue was the obvious area to grow. The PLC obviously saw this by embarking on a pre-season tour of America before 04-05 and a pre-season tour of Asia 05-06 (unless it was the highly competitive nature of games against the likes of Hong Kong XI and Beijing Hyundai that drew us to Asia?)

Also, the PLC would have negotiated a better deal with Aon with equal installments and therefore our turnover may have stood at £335m.

How anyone can take total guesswork so seriously, just because it is argued in a deceivingly learned fashion is beyond me.

Redjazz

Indeed they would and have done .

The performance of the commercial depatment has been very good though, and the growth in tier 2 sponsorship has been excellent. Overall growth in commercial is running at c. 14% pa throughout the Glazer period. Barcelona (commercial) run at 19% pa over the 6 year period 2004 to 2010. I have no data yet for 2011. Madrid run at 10% over the same period. Given our standing (then and now) as the premier brand in world sport, the size of our fan base, the relative performance of the clubs on the international stage over the period, I would expect the club, PLC or Glazer owned, to be producing figures in the mid teens.
The Glazer approach started out rather slowly and began to pay real dividends from 2009 onwards. This fits with the creation and expansion of a dedicated commercial department in London. Commercial staff numbers have increased form 23 in 2009 to 53 in 2011.

As for the Glazer blueprint:

Commercial Director, Richard Arnold (in 2010 and 2011):

The Glazers are "willing to explore new things. They give us freedom and investment to try different ways of doing things. That has generated the results we are now seeing."
"In some ways the strategy that has been conceived has been three years in the making,'' Arnold added. "In the last six to nine months we have really seen the results of that."
“Our approach has evolved beyond a traditional sports club’s, to being far more like that of a conventional blue-chip company. To arrive at this position we have spoken to companies with reputations as the world’s leading marketing organizations to see how they approach promotion and sales.”

The LBO model does incentivise this expansion, investment in people, etc.
In 2006, The Glazers drew up a conservative forecast for future profits; you need to show bankers that, going forward, you have the ability to meet interest payments. The target for 2011 was 108m in cash profits. the actual delivered was 110m. Performance (and hence Media income and matchday) since was much better than the conservative plan, but the costs of running a football club were much higher than expected. It required greater than expected performance on the commercial side to bring the profit figure back on track.
Of course, the PLC would have faced its own pressures to amp up its commercial performance. As a business, the club had to return shareholder value, and I am sure that David Gill would have concentrated on the high growth, high margin commercial stream to accomplish that. Internal investment would certainly not be an issue. The second driver would be growth in costs (players' salaries in particular). If the club was to remain competitive, it would need to push commercial performance as Matchday has limited upside and Media is largely determined elsewhere. If the club wanted to keep TP below market price then the need to driver commercial is even greater. It makes no business sense to assume that the plc would persist with a benign ticket pricing without having strong commercial results to compensate.