Lebowski
Full Member
I think $1b is actually a pretty conservative estimate. As far as I can tell it is a simple calculation of the costs directly associated with the Glazer's ownership (debt, debt restructure, interest repayments, director remuneration, dividends). It doesn't include things that most comprehensive costing exercises would though, such as the full cost of finance and, more crucially, the damage/opportunity cost associated with the takeover.In order to reach 1b (dollar), you need to add some of the Glazers money (which they got via selling their A shares to other people) which they used to reduce/restructure the debt. From MUST this is somehow seen as a negative (cause why not, let's go with the agenda), but in fact it was a positive. They sold some of their shares (and now own less than the entire club) and used that money to repay the debt. However, it is portrayed like 'yet another sum of money they drained from the club'.
It also doesn't use any context, like if that money wouldn't have been spent on the debt and interest, some part of it would have been spent on taxes. I briefly touched that topic just a few posts ahead.
Finally, it doesn't measure their (undeniable) contribution in the financial growth of the club. Just check the sheets, out commercial income had stagnated before them, and our advertisement department has 2 employees. Now, it is on the hundreds. Obviously, some other owner might have done the same, but it is unlikely that the previous owners would have managed to do this, considering that a) they were clueless; b) they were clueless; c) they were clueless and d) their strategy was Nike + vodafone and nothing else.
Don't get me wrong, all things considered, there was a gigantic amount of money that was drained from the club. Just that it wasn't 1b; some of that money would have been paid in taxes instead of interest payment; Glazers contributed in growing (financially) the club. Now, it is hard to guesstimate how much money was spent because of Glazers (as in remove interest, debt and divident payment, add taxes) but for sure it has to be in the hundreds of millions. Just that nowhere close to a billion. And the equation becomes impossible, if you also add into account Glazers contribution to the growth of the club and that the PLC also got dividents.
For example you cite the Glazer's expansion of our commercial revenue, and it is true that commercially our turnover greatly exceeds what it was when they took over. That is the sort of contribution that would be included in a full costing exercise, but so would the lost opportunity of having hundreds of millions of pounds that would have been available to spend on players, the stadium, facilities, marketing and so on.
I would like to see a comprehensive costing of the Glazer takeover done however for obvious reasons this will not be something they would allow. I would speculate that the final figure is probably higher than the $1b that has become the most commonly cited figure.