Man Utd almost £1bn in debt

amolbhatia50k

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fecking parasites will suck us dry unless we get them out. The club is doomed in their presence
 

rollingstoned1

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PaulScholes99 said:
While it is true what you are writing, it is only a small part of the picture. What most people don't understand: There is a big, big difference between debt of private people like me and you and of companies/states. While me and you will unfortunately die in the future, states/companies will not die (as long as they aren't mismanaged). And there is the big difference: private debt has to be repaid in a lifetime, while companies/states just have to pay the interest. They will just find new debtors.

It will only be a problem if the interest rate is exorbitantly high for a long time, because then the interest rate paid will be very high. Otherwise, big companies or states don't really care about debt. It's part of the game (unless you are right wing and fan of a state not making any new debt)

Btw - somehow the countries with most debt in % of gdp seem to be doing better than those who have smaller debt in %.
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Creditors you mean.
Suggest you educate yourself on basic economics before spouting ignorant and demonstrably false hogwash mate. Big companies have gone under and countries themselves have defaulted on their debt in the past which had pretty real consequences before they got serviced and refinanced. Their size relative to private individuals doesn't immunize them to it's effects. If debt and the rate at which it had to be incurred did not matter, as you say, then the Glazers' would not have urgently tried to pay down the PIKs around 2010 which were pretty high interest relative to the rest of the debt with their own money.
Manchester United's Glazer family to pay off PIK loans - BBC News


It is not yet clear how the Glazer family were able to raise the money to pay off the PIK loans.
They are understood to have given the Citadel, Och Ziff and Perry Capital hedge funds seven days' notice of the repayment.

The PIK loans were significantly reduced as part of a refinancing in 2006 but since then have been accruing interest at extremely punitive rates.
Earlier this year the rate rose to 16.25% and although the Glazers are liable for the debt, supporters have long suspected money from the club would eventually be used to start paying them off.
As part of a £526m bond refinancing in January, the Glazers were given the freedom to take up to £70m from the club's revenues to pay down the PIKs.


By notifying the lenders they intend to pay them off in full next Monday, the Glazers will reduce a lot of the financial pressure on the club.
The club's parent company, Red Football Limited, is due to publish financial results for the first quarter on Tuesday, but those figures are not expected to include details of how the PIKs, which sit on the accounts of Red Football Joint Venture Ltd, have been redeemed.
Despite making a £79.6m pre tax loss for the last financial year, mainly due to one off interest and debt charges, United generated revenues of £278m and have over £100m of cash reserves.

But taking money from the club at a time when many supporters feel there should be more investment in the team will only add to the opposition to the Glazers at Old Trafford.
If the money hasn't been taken out in that way then the Glazers may have borrowed the money from other financial institutions at more affordable rates to refinance the PIKs.
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Alonzo

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Is anyone else like me, and would actually be happy to see the glazers stay for another season or two, if it meant they end up having no option but to sell for maybe £3b as the value of the asset diminishes? Similarly with Elliot, if their minority investment meant they’d eventually just assume control of United at a steal when glazer couldn’t cover debts. Provided couldn’t asset strip, due to legislation/fan revolt etc.
If these was a guaranteed outcome, I’d happily take it, just to see those pieces of shi blow their one final chance to exploit United. Feck em
 

croadyman

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Alonzo said:
Is anyone else like me, and would actually be happy to see the glazers stay for another season or two, if it meant they end up having no option but to sell for maybe £3b as the value of the asset diminishes? Similarly with Elliot, if their minority investment meant they’d eventually just assume control of United at a steal when glazer couldn’t cover debts. Provided couldn’t asset strip, due to legislation/fan revolt etc.
If these was a guaranteed outcome, I’d happily take it, just to see those pieces of shi blow their one final chance to exploit United. Feck em
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Nope I want them gone before the summer
 

Alonzo

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croadyman said:
Nope I want them gone before the summer
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Haha fair. I’d prefer them gone, but if i knew for sure they were shooting themselves in the foot by staying, which i think they’re stupid enough and terrible enough at business to actually do, it would soften the blow dramatically.
 

Rams

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rollingstoned1 said:
Creditors you mean.
Suggest you educate yourself on basic economics before spouting ignorant and demonstrably false hogwash mate. Big companies have gone under and countries themselves have defaulted on their debt in the past which had pretty real consequences before they got serviced and refinanced. Their size relative to private individuals doesn't immunize them to it's effects. If debt and the rate at which it had to be incurred did not matter, as you say, then the Glazers' would not have urgently tried to pay down the PIKs around 2010 which were pretty high interest relative to the rest of the debt with their own money.
Manchester United's Glazer family to pay off PIK loans - BBC News
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Basic economics.. if you have a business worth 5billion and have 1billion debt? It’s not that bad, but it ain’t great either.
 

devilish

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Can we afford even more debt ? (ie INEOS)
 

mitchmouse

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Pretty much why, despite all my concerns, why we have to have owners who will wipe away this debt. Frankly, more and more clubs are going to be available only to the super wealthy (I'm amazed Spurs haven't sold up yet) so we might as well get on with it
 

Adisa

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devilish said:
Can we afford even more debt ? (ie INEOS)
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Theoretically, IENOS will bear the new debt but it's not ideal. I can't imagine some of the club's funds won't be used to pay off that debt. And quite frankly, I do not trust Ratcliffe. He has proven his word doesn't mean shit.
 

Pogue Mahone

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Alonzo said:
Haha fair. I’d prefer them gone, but if i knew for sure they were shooting themselves in the foot by staying, which i think they’re stupid enough and terrible enough at business to actually do, it would soften the blow dramatically.
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If the new owner buys the club for, say, 50% of what the Glazers are asking for now it’s also a benefit to the long term financial health of the club. As there will be several billion quid of the new owner’s money freed up, that would otherwise line the Glazers pockets.
 

Tom Cato

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dove said:
Debt is fine, nothing to worry about lads. Or so we are constantly being told here.
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The transfer debt, and debt from rolling credit which I assume was dipped into partially during covid, are both fine. Fine in the sense that its an investment that all big clubs make. The value of the investment into players like Pogba have been very bad in hindsight however.

The debt from the takeover that the Glazer family leveraged against the club is the cancer that just wont end. That and the continious dividend payouts to a set of owners who have invested excactly: feckall - into the club themselves.
 

devilish

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Rams said:
Basic economics.. if you have a business worth 5billion and have 1billion debt? It’s not that bad, but it ain’t great either.
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Are we truly worth 5b though? Cause that's the very inflated price some qatari dude/the INEOS guy would be willing to match for sportwashing/greenwashing purpose. If the bid is refused then these people would probably move for other clubs.
 

thegregster

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devilish said:
Can we afford even more debt ? (ie INEOS)
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A 5bn loan would have interest rates of 15%? Im just guessing it would be around that fig.

So interest payments alone would be 750m a year. A levered buyout is out of the question IMO.
 

Stacks

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Please note, we as fans are demanding we spend record amounts on transfers "akin to City" and other oil clubs, because some seem to think we have unlimited funding. Truth is we were never as rich as claimed and still massively in debt. Of course the blame is on their mismanagement but hopefully its a bit clearer as to why we don't spend £300 million every summer because we are the "richest in the world".....we are not
 

romufc

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Stacks said:
Please note, we as fans are demanding we spend record amounts on transfers "akin to City" and other oil clubs, because some seem to think we have unlimited funding. Truth is we were never as rich as claimed and still massively in debt. Of course the blame is on their mismanagement but hopefully its a bit clearer as to why we don't spend £300 million every summer because we are the "richest in the world".....we are not
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I mean the proof is there, we are the "richest in the world". The oil clubs have rich owners but does not mean the club is rich.

Manchester United have spent more than City and other oil clubs in the last 10 years with 0 owner investment. We have paid £1bn in dividends to our owners.

We have 1bn debt of which 550m is the Glazers debt which they took out to buy the club and put it on the club.

So if you actually look at it, we are a very rich club all things considering.
 

Stacks

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romufc said:
I mean the proof is there, we are the "richest in the world". The oil clubs have rich owners but does not mean the club is rich.

Manchester United have spent more than City and other oil clubs in the last 10 years with 0 owner investment. We have paid £1bn in dividends to our owners.

We have 1bn debt of which 550m is the Glazers debt which they took out to buy the club and put it on the club.

So if you actually look at it, we are a very rich club all things considering.
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Well we aren't cash rich which is the main thing. We could never have a £300 million annual transfer budget plus our £230 odd million wage bill
 

romufc

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Stacks said:
Well we aren't cash rich which is the main thing. We could never have a £300 million annual transfer budget plus our £230 odd million wage bill
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No club is cash rich, cash does not make the club the richest or not. No club has an annual 300m transfer budget, including the oil rich ones.

When you look at our spending on wages and transfer fees, we compete with the richest owners, which clearly shows we are a rich club.

Add to that the interest payments of £20-40m a year on loans.

Clear all the debt, we are probably the richest club.
 

Jeffthered

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Well, as well as having a lash out at the Glazers, consider the management who over last decade have spent £1.3bn on players (recouped £390m). That's some return on investment right?

Course we're skint, many massive clubs are and these financial models are causing problems.. note Juve, Barca, investigations in Newcastle ownership.. it's nuts and out of control. Leeds took nearly 15 years to recover from having wacky owners.. It's horrible.

Until we can all, as fans (expectancy), players, agents, managers, owners be a little more humble and stop this crazy 'more, more, more, more...' mentality, and consider more of a collaborative ownership model with fans, then this is the result.
 

Scandi Red

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"... so that's 200 million for Osimhen and a good central midfielder."
"Can the treasury bear such expense?"
"I'll have to borrow it. The Lannisters Glazers will accommodate, I expect. We already owe Lord Joel 500 million in gold. What's another 200 million?"
"Are you telling me the crown club is 500 million in debt?!"
"I'm telling you the club is 1 billion in debt."
"How could you let this happen?!"
 

sifi36

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All clubs have transfer debt, as most deals are structured to be paid over a period rather than all up front.

Amortisation of transfer fees over the length of a player’s contract splits the fee equally over each year on the balance sheet and this isn’t the same thing.

The cash payments made to the selling club are not structured this way. An example is the Maguire purchase. We paid Leicester the full amount up front. For this example, the cashflow statement would show the whole amount for the year the purchase was made, but the balance sheet would show ~£13m (£80m over 6 years) for each year for the length of his contract. This would then not register as transfer debt as the amount has been paid, but would show as an ongoing amortisation charge on the balance sheet for each year of the contract. The cash itself, for the whole amount, left the account on the day the invoice was paid.

Amortisation and payment terms are unrelated.

Transfer debt is a problem, in the sense that we have made very little from sales over the last few years to balance it out. I don’t know what the projected cash flow looks like but from a transfer fees stand point, it’s almost certainly the case that this will be a drag on the cash balance over the next few years unless we make some significant sales and do so starting with the next window.

The cash balance is now very low (hence the usage of the revolving credit facility) and will be hit further over the coming years because of the large amount of net transfer fees owed becoming due.

It is the cash position that has boxed the Glazers in. Combined with high levels of existing debt making it challenging to borrow more to fix the problem.
 
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astracrazy

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I think we are now seeing why the Glazers are picking now as a time to sell. They have drained the pond dry.
 
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