#GlazersOut

Discussion in 'Manchester United Forum' started by Marcelinho87, Jun 20, 2019.

  1. Jul 17, 2019

    Jezpeza Full Member

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    Net debt is sum of gross debt - cash held. Again your ‘facts’ are wrong, unless the owners pay all of that cash against the debt, then your number would be right for our gross debt. Gross borrowings are very relevant. Sigh.
  2. Jul 17, 2019

    Johan07 Full Member

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    Of course its is. I didnt suggest to pay it off with cash though. That was you. I said equity. United has plenty of current assets that could be realised. There is no point having cash in the bank for its own purpose.
    Now I am watching the United-game and out of this discussion for good.
  3. Jul 17, 2019

    Jezpeza Full Member

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    No you suggested its paid off using equity which is impossible without the Glazers selling shares or some of the clubs assets. You cant pay debt off with equity without converting it to cash by selling assets or shares. Our assets are players, stadium and training ground etc.

    You still dont know what equity means.
  4. Jul 17, 2019

    Johan07 Full Member

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    Why are you repeating what I say like I didnt? Its confusing.
    Equity equals Assets minus Liabilities. In an accounting sense which is what I am talking about.
    When you start involving share value you are talking about equity in another (trading) sense which is irrelevant for this discussion and is just plain weird.
    All I have been trying to say is that the Glazers could easily pay off the clubs debt today by using equity. I never said that you dont have to convert assets to cash before you actually go to the bank. You got hung up on this for no reason.
    And it was not my point to begin with. I was replying to this notion (from you) that the Glazers are bleeding the club through dividends and interest payments when its factually incorrect and that the Glazers have actually been building equity in the club, especially over the last six-seven years.
    So I tried to describe the clubs financial situation in a correct way.
    The Glazers is not going to pay off the debt using (or realising assets if you want) equity. It would be financial malpractice and actually bad for the club if it was financed 100% by equity and no debt. Debt is cheaper for the Glazers, which actually is a good thing for us fans if you try to see the whole picture instead of whatever propaganda you are used to reading.
    Now I am really out of this.
    Great goal by Rashford by the way if you care.
  5. Jul 17, 2019

    Jezpeza Full Member

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    But the club is in debt because they leveraged a deal to buy it because they couldn't afford it and 14 hears later still haven't cleared the loans they secured against the club to buy it? So all the interest paid on those loans since then has been a total waste of revenue. And what the f**k are you talking about? Debt is cheap? What, are we getting interest free loans? Interest is crippling. The clubs cash assets atm are a lot less than its liabilities.

    And How is 100% equity malpractice? And explain how you finance something with debt? You mean borrowing? We dont borrow money. All our borrowing came from one source : the leveraged loan deal by woodward to help the Glazers buy the club, secured back against the club. Basically, people with no money managed to buy one of the worlds biggest clubs. Wonderful bit of business for them.

    Imagine if the club was a house and a rich person with heaps of cash just bought it outright in cash. How would that be malpractice, compared to borrowing a heap of money against the house because you cant afford it and then paying heaps of interest on the debt secured against it out of your income over a sustained period?!?!

    And no, sorry, equity is the clubs total assets plus its share value minus its liabilities. So you are talking garbage. Because our only real accessible assets against the 486 borrowing in the accounts are the players (valued at 770m), the ground training ground etc and then the cash or cash equivalents we hold which is around 248 i think. The rest of our considerable equity is share value.

    In an ideal world, the Glazers would sell the club and things would get better.

    Finally, if you really read the accounts, the glazers recently paid a dividend of 0.09 per share on each of the approx 165m shares we have, which they own 83 percent of apparantly, which totalled a payment of approx 15m.

    Happy to keep going if you like
  6. Jul 17, 2019

    Saffron New Member

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    Great post. Always suspected this Johan guy was full of it. Acting all high and mighty because he read a quarterly report and is a hobby invester.

    Found out.
  7. Jul 17, 2019

    MackRobinson Full Member

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    Can you explain each of the bolded? I don't follow either.

    EDIT: I somewhat follow the second part, but you are describing a mortgage which is common practice and not bad at all.
    Last edited: Jul 17, 2019
  8. Jul 17, 2019

    Jezpeza Full Member

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    He began by essentially believing equity was cash, then later claimed that we finance the club by borrowing money, we finance it with debt. Thats not the case.

    The glazers bought the club with loans secured against it through leveraged deals. Now the debt is secured against the clubs own revenues and thats what the debt in our accounts is. A silly amount of money goes out in dividends each year and on interest on money borrowed to buy the club.

    An owner who could afford us would just buy it cash or at least have a very large amount of the sale price to deposit. Square the accounts in the acquisition. No debt repayments and interest payments deducted from revenue.

    I used the mortgage but in hindsight its the wrong analogy. Because a house doesn't make money.

    Let me make it as simple as possible.

    Imagine you are buying a business. Because you simply want lots of money. You have not enough capital. Not enough money. Cant afford it. Cant secure the loan against anything you own. Its too big and too expensive for you.

    You hire a man at a bank, a number cruncher (in the glazers case woodward).

    You instruct him to broker a deal whereby you buy it with loans secured against the revenues of what you are buying.

    When the deal is done, you own it without paying for it. You can now use its own finances to pay for it. It costs 60m a year in interest but what do you care? As long as the interest keeps getting rolled over you can keep dipping in for dividends etc as majority shareholder. The value of the club has quadrupled since they took over as well.

    Now this is quite common in business, leveraged acquisitions.

    The problem is in football, people dont care about all of that, they just want to see their team win. And its clear that the manner in which the Glazers purchased us affects our ability to spend because we are still paying back the debts and big interest payments on them each year and at the end of the day they are running it for profit, not for fun. Thats why we try to haggle leicester down on Maguire etc. If you truly care about winning and have the money and you need a player you just buy them.
  9. Jul 17, 2019

    George The Best Full Member

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    I can’t get hung up about the debt, it costs us what - £25m a year to service. If the club was turned back into a Plc we’d probably be paying more in annual dividends to the shareholders, similarly if a private investor were too acquire the club then they’d also want to take out a share of the profit each year - otherwise why buy it.

    My personal view is that there is a ‘morality issue’ for many people with regards to leveraged buyouts, simply because in this case the club is paying the ‘mortgage’ for the benefit of the Glazers, who have not put a penny of their own money into the purchase. That, in hindsight, turned out to be a very shrewd piece of business considering how the value of the business has grown.

    That in itself does not make them bad owners though, just opportunistic speculators. They’ve allowed the club to spend a fortune on player aquisitions, truth is, for the most part, it’s been spent badly. That is the biggest criticism I have, and much of that is down to Woodward. The Glazers biggest failing, as majority owners, has been to not understand that the clubs money has been poorly invested in the market. They should have insisted on building a football structure, alongside the commercial structure and ensure that Ed is removed as far as possible from football related decisions.
  10. Jul 17, 2019

    Johan07 Full Member

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    Because if you can borrow against a good interest rate, you can make more money investing your money elsewhere. Especially since a house does not make profit. Thats why people do take out mortgages, its not just the fact that they cant afford the house.
    Its a real bad example, corporate finance is much more complicated then what you just tried to make it into.

    Why do you think most major companies operate with much larger debt than United? Because its not financially effective to do so?

    What you are doing is what many people in this thread are doing. You are acting like the club and the Glazers are not basically a financial entity, which they kinda are; like it or not. Instead you are acting like the club is ours (the fans) and the profits do not not actually belong to the Glazers somehow.

    What I am discussing is the most effective way for the Glazers to finance United. Because, like it or not, whats best for the Glazers financially is also best for United as long as they dont start to sell off assets and take all the profits out in dividends.

    And that is just not what is happening. They are pretty much investing every penny we make, this is clearly evident from our wage bill. We could be on Spurs or Arsenals level, a couple of 100m lower per year and the Glazers could take that out in dividends instead. Again: its not what is happening.

    You are discussing how the Glazers run United financially now and comparing it to a fantasy unicorn, where United was not bought in an LBO and/or run by owners that are not looking for any return of their investment. Without this comparison your arguments mean nothing.

    And I am sorry, thats a fantasy. It was a fantasy in 2005 and its a fantasy now and always will be if the Saudis dont buy us. This is the main reason why you and posters similar to you dont get it. Because you think that there is a happy place somewhere where owners buy and own billion dollar companies not to make money off them.

    And please try to understand the difference between shareholder´s equity and accounting equity. Read the consolidated balance sheet, thats it. Easy.
  11. Jul 17, 2019

    Johan07 Full Member

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    Yeah, no shit they do. Dont you think FSG does that? Levy? Kroenke?
    You just made my point in my last post. Because you have this idea that we could actually have owners that would buy a 4,1bn company and run it for fun.
  12. Jul 17, 2019

    Saffron New Member

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    You don’t have to take out dividends to make money. FSG hasn’t taken a penny out of Liverpool. Yet they have increased the value of the club by over a billion, so if they were to sell today they would make a massive profit.
  13. Jul 17, 2019

    Shakesey Full Member

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    I like your take on matters!
  14. Jul 17, 2019

    MackRobinson Full Member

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    I still don't understand the distinction you are trying to make about the club not being financed with debt. The sale of the club was absolutely financed with debt, which is synonymous with borrowing. Unless you are talking about operating costs, which still can be financed with debt.

    - A house can make money (I assume you mean tap into it's liquidity) if the value increases. It's called refinancing (and it happened in the case of United)

    - The Glazers actually secured a portion of the debt against their own assets. It's just largely ignored for some reason

    - The high interest payments and dividend payments didn't happen in tandem. While the interest payments were 60m there wasn't a dividend taken out (which is reasonable). That only happened in the last 4 years when the financial position of the club was secure. There is nothing wrong with the dividend payments.

    - The interest payments only affect the clubs ability to spend if very little of the debt was used for operating expenses, which is highly, highly doubtful. Given the previous owners were actively looking for additional investors AND recommended minority shareholders allow the Glazers to take over the club I seriously doubt there would have been a delta of 60m between the Glazers and the old owners. This is theoretical and weird thing to beat them over this head with.

    LBOs are very risky in the early stages, and there is no doubt about that but if that asset (United) appreciates at rate much faster than the compounding interest AND there are refinancing activities (which happened) AND liquidity events (which happened) there is generally nothing to worry about.
  15. Jul 17, 2019

    George The Best Full Member

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    And the value of Man Utd has increased by what, despite the Glazers taking a relatively paltry dividend. Growing the value of the club alone is all well and good - providing you can then sell it at the new valuation. I suspect you can count the number of potential buyers of Man Utd on the fingers of one hand. Nothing wrong in taking an annual dividend to tie you over.
  16. Jul 17, 2019

    Saffron New Member

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    Why would you, as a fan, welcome it though? We’re the only top 6 club that does it as far as I’m aware. So if your only answer is ”it’s unavoidable”, it obviously isn’t.

    I thought Kroenke did but apparently he does not. He just doesn’t inject anything.
  17. Jul 17, 2019

    George The Best Full Member

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    Because, unless you want us to be bought by the likes of Saudi Arabia, the only way the Glazers are likely to be able to realise their asset gain is by means of a public flotation of their majority share. Then you will see tons more money going out of the club in shareholder dividends.

    Look, I don’t like the Glazers any more than most, but right now the debt is a minuscule problem in the grand scheme of things. Main reason I don’t like them is because they don’t understand the asset they have and how to run a football club, and have allowed good money to be wasted through poor football mis-management. The debt is inconsequential as it is the most efficient means of building a business compared to equity or cash. Do you think that when Ryan Air decided to buy their next 100 plus aircraft that Michael O’Leary just dipped into his back pocket and plucked £5bn out?
  18. Jul 17, 2019

    George The Best Full Member

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    Also ‘welcoming it’ is not what I said. What I am saying is that for a private investor the dividend taken since their ownership, plus the annual debt repayment is likely much lower than any other form of financing, by any other form of ownership.
  19. Jul 17, 2019

    InspiRED Full Member

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    It is not just the morality of it, though I do find the morality of it abhorrent.

    The question is, is the long term debt going down? The below doesn't look like it.

    [​IMG]

    The pro-Glazers posters argument is basically this: long term debt doesn't matter because we can keep refinancing it... potentially forever(!) By refinancing we keep the short term interest payments manageable in ratio to turnover, there is still money for player transfers and to invest in the team and infrastructure. This however makes the assumption that Man Utd's brand power and ability to generate revenue stays the same or improves over time, which will affect the rates at which the club is able to borrow. At the moment the brand power is underpinned by a few factors like:

    1) Past success, particularly under SAF era
    2) The commercial marketability of the Premier League worldwide and sale of broadcasting rights.
    3) A growing fanbase in the US

    Some posters here, seem to think that you can continue creating or refinancing debt forever and it doesn't matter, because as long as you can comfortably meet your obligations and operating costs, its sustainable, and because "that's the way the system works". But it doesn't work like that. The market isn't infinite, it has a ceiling. The revenues underpin everything. If you can't guarantee the same - or improved - revenues anymore because something happens to your market, you won't get the same attractive terms when you refinance this long term debt.

    So what happens in the future if something does happen to the market like:

    1) Other European leagues start to creep in on the premier league's market share reducing revenues for all PL clubs
    2) The Glazer's and Woody's bad management of the club from a sporting standpoint continues and we face continual finishes outside of the champions league places, leading to less exposure, less popularity and then noodle sponsorship deals in Asia
    3) Other clubs start to take some of our market share because they have more successful and marketable teams, like say Liverpool, who are well on their way to doing exactly that

    In this situation, servicing the long term debt gradually becomes a noose which gets a little bit tighter round the club's neck with every passing season. Transfer budget will be squeezed, ticket prices will rise, more resources will be sold off and leased back to the club.

    Pro Glazer posters have repeatedly told us "hey, you just don't understand finance. Don't worry, debt is really a GOOD thing, all large companies carry debt". But was this "good" debt, held by other companies, acquired as the result of an LBO to finance the takeover in the first place? Or was it debt that was taken out as an investment in the business, maybe to fund R+D costs, or to launch a new product. Something that is going to generate further revenue in the long term.

    There aren't rewards for the debt Man Utd accrued in the Glazer takeover. I don't doubt some of it was for operating costs, but arguing the vast mass of it wasn't incurred by the LBO is at best, inaccurate, at worst, an outright lie.

    So no it's not just morality or an "angry, fuming, stupid mob mentality" behind the anti glazer movement, but rather an interest in the long term future and sustainability of the club.

    I'm sure I heard it somewhere before that "leverage and debt is not a problem and it's just the way the world works". Ah that's right, it was just before that financial meltdown in 2008 that brought the world economy to its knees.

    Despite all this though, the Glazers management would possibly be tolerable if they had any clue how to deliver a successful sports team, which they have failed to do, despite having one of the most profitable clubs in the world. They have also historically failed to do during their ownership of the Tampa Bay Buccaneers and I think it was one of the Pro Glazers posters who pointed out that "history doesn't lie".

    I'm no financial expert, I've said as much. But I'm also not a geophysicist and don't think I need to be to point out that the world isn't flat.

    I know i'm preaching to the choir to virtually everyone in this thread, but thought i'd make an effort to help some of the few who are still struggling with these concepts.
  20. Jul 17, 2019

    George The Best Full Member

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    It really doesn’t matter if the debt is going down or not. The servicing cost is minute compared to the growth of the club. What really, really matters is are they capable of running a football club. We’ve spent tons of money in the transfer market and contract extensions, much, much more than the debt servicing cost over the years. Much of that has been wasted. I repeat, that’s my criticism of the Glazers, not the level of debt.
  21. Jul 17, 2019

    InspiRED Full Member

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    Doesn't seem to be a facepalm emoji.
  22. Jul 17, 2019

    Wheato Full Member

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    [​IMG]
  23. Jul 17, 2019

    Bastian Full Member

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    Truth patrollers - I thought you were accusing scores of posters of peddling fake news. I suggested you'd summarise the inaccuracies, especially with regards to the finances since the takeover, and correct them.

    Are you not interested in restoring your truth? I'm waiting..
  24. Jul 17, 2019

    Luke1995 Full Member

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    I don't have hope of them ever getting out. It's been 14 years since they bought the club and there were never any serious links about other buyers.

    I wouldn't really want the club to be owned by ''oil money'' either and if the club was fan-owned or public it would be a mess...

    In a perfect world, a honest man with honest money would buy the club from the glazers but it's hard to find those in the footballing world.
  25. Jul 18, 2019

    sunama Baghdad Bob

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    Blimey.
    This thread has turned into an accountancy lesson.
  26. Jul 23, 2019

    Denis79 Full Member

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    They'll peddle the same two lines over and over, how the worth of the club has grown and how much we spent since Moyes left, that's the extent of their knowledge regarding club finances.
  27. Jul 24, 2019

    MAGARed New Member

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    My beloved Tampa Bay Bucs are now expected to place last in their division again according to the oddsmakers.

    1st place 1x, last place 9x since Glazer sons took over 13 years ago.

    Boycott Glazers
  28. Jul 25, 2019

    Water Melon before it dries out, eh

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    If there is no significant investment in the team this summer, boycotting the owners openly at OT during matchdays should become the norm. Singing our lungs out supporting United during a match can go along with anti-Glazers chants shortly before kick-off or at half time.
  29. Jul 26, 2019

    Raw Full Member

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    That's insane.
  30. Jul 26, 2019

    Denis79 Full Member

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  31. Jul 26, 2019

    Patrick08 New Member

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    The club will pay her debt's and interests.
  32. Jul 26, 2019

    Denis79 Full Member

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    That's what thus club is to the Glazers, a money cow.
  33. Jul 26, 2019

    M Bison Full Member

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  34. Jul 26, 2019

    Fluctuation0161 Full Member

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    Its hardly investing in the asset though is it. All they do is take. No investment in the ground. Too little investment in the squad over the last 4 transfer windows. It paints a picture of owners just bleeding the value out of the club.
  35. Jul 26, 2019

    M Bison Full Member

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    She’s a shareholder in a large multinational company, what do you think she should do?
  36. Jul 26, 2019

    Valar Morghulis Full Member

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    Send Mohammad Bin Salman a friend request.
  37. Jul 26, 2019

    M Bison Full Member

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    :lol:
  38. Jul 26, 2019

    Valar Morghulis Full Member

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    And just to put a few of you Lying Teds in your place a bit, I wish to join as a brother in arms with my man @Keefy18 on #TeamGlazersIn and post this little video proving the Glazers are actually great, children loving folks.



    Darcie thoooo...:drool:
  39. Jul 26, 2019

    Buster15 Full Member

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    In my view it is the complete lack of investment in the ground that I find most concerning.
    While OT remains the biggest in terms of capacity, that is the only thing that it leads on. It is looking pretty tired and in need of a great deal of updating.
    As most people know, you have to maintain the infrastructure to prevent it falling into decay.