Our debt has increased 133% to £474.1 million

MDFC Manager

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Net debt 101
Net Debt as of 30 June 2020 was £474.1m, an increase of £270.5m over the year, due to a decrease of £256.1m in cash and cash equivalents and adverse movements in the GBP:USD exchange rate. The gross USD debt principal remains unchanged

Nothing to do with Glazers directly. Simply we had to dip into our huge cash reserves (300m) on a rainy (COVID) day to pay the bills when our sugar daddy (broadcasting $$) was slashed in half overnight.

This should be in the OP.
Thanks for the explanation.

It's still a shitty situation, but not as bad as a layman would infer from the thread title.
 

ChaddyP

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One thing im confident in is Woodwards ability to deal with the financials. Not sure im arsed either way with this. What pisses me off is Galzers taking more dividents.
 

7even

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In short. All numbers as expected.

Key points fiscal year 2020 (2019)

Commercial revenue 279 (275) = up 4m
Broadcasting revenue 140 (241) = down 101m
Match day revenue 90 (111) = down 21m

Total revenue 509 (627) = down 118m
Operating profit/(loss) 5 (50) = down 45m

Cash and cash equivalents 51 (307) = down 256m

In this period we;
bought
Maguire (87m)
AWB (55m)
Bruno (55m)
Dan J (18m)

sold
Lukaku (74m)
Darmian (2,5m)
Young (1,7)

loan (2019/20) Smalling (3m)

Total transfer costs out = 215m
Total transfer income = 105m
Transfer Net = 110 (roughly)


Cash end of June 2019 = 307

Player transfers net in the period = 110m
Decrease in revenue in the period = 118m
Acquisition of treasury shares in the period = 21m

Cash end of June 2020 = 51

The pandemic hit us as expected but apart from that it was business as usual.
 

WR10

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Thanks for the explanation.

It's still a shitty situation, but not as bad as a layman would infer from the thread title.
You're welcome. I hope it makes its way on the OP so people can vent their emotions but be fully informed of what this means. I see a lot of misunderstanding in this thread.
 

WR10

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In short. All numbers as expected.

Key points fiscal year 2020 (2019)

Commercial revenue 279 (275) = up 4m
Broadcasting revenue 140 (241) = down 101m
Match day revenue 90 (111) = down 21m

Total revenue 509 (627) = down 118m
Operating profit/(loss) 5 (50) = down 45m

Cash and cash equivalents 51 (307) = down 256m

In this period we;
bought
Maguire (87m)
AWB (55m)
Bruno (55m)
Dan J (18m)

sold
Lukaku (74m)
Darmian (2,5m)
Young (1,7)

loan (2019/20) Smalling (3m)

Total transfer costs out = 215m
Total transfer income = 105m
Transfer Net = 110 (roughly)


Cash end of June 2019 = 307

Player transfers net in the period = 110m
Decrease in revenue in the period = 118m
Acquisition of treasury shares in the period = 21m

Cash end of June 2020 = 51

The pandemic hit us as expected but apart from that it was business as usual.
This is why United's share price is soaring back up today. Ed and the board took sensible decisions in the hardest of times. Fans are not shareholders, unfortunately - remember that.
 

tjb

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This was obviously coming, I hope its a bit of a wake-up call for all those people who were having toddler-like hissy fits that we wouldn't break the British transfer record in the summer for Sancho in the middle of a pandemic.

Looking at this its looks like the spending we did do was pretty reckless but then the same goes for most premier league clubs. the spending by the Preimer league this summer was nothing short of stupid and many clubs are going struggle before all this is said and done.
This.

It' s almost like our fans were willing to cripple the club just to be able to buy as much as Chelsea. We will see the financial records of other teams and see the hit the also took. We clearly weren't in a position to spunk that type of money on Sancho at this point, while the media and fans were basically bullying us to make that move. Leeds fans probably did the same in 2002. I know we are nowhere near that bad, and in reality, we are still in really good shape, but to maintain that shape, we need to be as smart as we were in this window.
 

Esquire

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This.

It' s almost like our fans were willing to cripple the club just to be able to buy as much as Chelsea. We will see the financial records of other teams and see the hit the also took. We clearly weren't in a position to spunk that type of money on Sancho at this point, while the media and fans were basically bullying us to make that move. Leeds fans probably did the same in 2002. I know we are nowhere near that bad, and in reality, we are still in really good shape, but to maintain that shape, we need to be as smart as we were in this window.
This is not an unreasonable view. But in the midst of this climate, us needing to dip into cash reserves to keep the business operating, service debts etc., what needs to be noted is that the Glazers still took dividends of 23m. Whilst you can say as majority they have the right to do it, but if they are spewing spin about suffering loss per covid and needing to be financially prudent. There is no good argument at least optically to take a chunk out and pocket as dividend. You are saying that 23m wouldn’t have made a difference in the Sancho chase where by a lot of reports we made a bid of 90m + add-ons? When the asking price was about 120m?
 

KennyBurner

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At the end of he day we made the right decision not to buy Sancho for an overpriced fee. Its very hard for the club right now given no matchday revenue. The clubs well being should always come first.

Dont forget we also strengthened by bringing in new players. We have been affected by the coronavirus like everybody else. Chelsea missed the last 2 transfer windows so hey are the exception.
 

Odin

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Can we please have a thread title change so that we restore sanity. Yes, I understand it engages and generates traffick, but I'm (almost) sure the Caf doesn't want to give economically illiterate fans their final, decisive heart attack...?
 

Nytram Shakes

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This is not an unreasonable view. But in the midst of this climate, us needing to dip into cash reserves to keep the business operating, service debts etc., what needs to be noted is that the Glazers still took dividends of 23m. Whilst you can say as majority they have the right to do it, but if they are spewing spin about suffering loss per covid and needing to be financially prudent. There is no good argument at least optically to take a chunk out and pocket as dividend. You are saying that 23m wouldn’t have made a difference in the Sancho chase where by a lot of reports we made a bid of 90m + add-ons? When the asking price was about 120m?
Realistically I don't think the glazers should have taken the size of dividend they did, but even if they didn't that doesn't mean we should have gone out and broke transfer records.

We are only a few months into this pandemic, and we have already lost 10's of million and there is no sign of it easing, it's looking very doubtful any fans will be in stadiums at any point this season, and there is no guarantee that there will be next season. Plus it's not just the fans, all income streams are likely to take a hit. merch sales, sponsorship deals are all likely to be down as the would economy feels the hit of the pandemic. It's hard to even speculate how much money premier league clubs are going to lose, but likely to be in the 100's of millions.

The insanity that some elements of fans and media are basically losing their minds that united didn't agree to spend more money then any premier league club has ever spent on a player, is just mind-boggling. Personly think what we did spend may have been over the top, 40 million for VDB to sit on the bench, 10 million in agent fees for 1 season of an ageing Cavani Utterly reckless.

Many premier league clubs are going to look back on this summer and go what the F were we doing spending that amount, and there is a good chance we could be one of them.
 
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tjb

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This is not an unreasonable view. But in the midst of this climate, us needing to dip into cash reserves to keep the business operating, service debts etc., what needs to be noted is that the Glazers still took dividends of 23m. Whilst you can say as majority they have the right to do it, but if they are spewing spin about suffering loss per covid and needing to be financially prudent. There is no good argument at least optically to take a chunk out and pocket as dividend. You are saying that 23m wouldn’t have made a difference in the Sancho chase where by a lot of reports we made a bid of 90m + add-ons? When the asking price was about 120m?
In the same way other club's owners would in a PLC. I don't like how the Glazers took over, but you have to admit, they are not the reason we have been poor on the pitch over the last 6 years. Maybe you could blame for us post ronaldo, but since our initial summer of waste in 2014, our managers have had the finances to spend. We have also been fortunate in that the Glazers are pretty inactive owners and therefore have not had any attachment aside from ownership of the club. Most things operationally have been the fault of Woodward and the managers that we have had...and even at that, since Ole has come in, the side that we can see has improved immeasurably, which suggests the managers prior were more at fault for our demise than simply the club.

On the dividend, that's part of the benefit and cost of dealing with inactive owners. They don't care about the club, we all know that; but at the same time, they also don't care enough to push any agenda through. They simply like the idea of owning the largest football club in the world and have not restricted the club from splashing the cash it earns since 2011. The downside is that they will not make the type of sacrifices an owner like Mark Cuban of the Dallas mavericks would make in situations like this. Like most teams, we have owners who may not be fans. Chelsea and City are rare cases, where the owners of the club see the team as a project. Like any other owners, when the club no longer gives them what they need, they find it boring or they are cash strapped financially, they will sell the club. For now though, I don't feel our fans should be as worried about ownership as they currently are. In 2010, we thought the Glazers would be far worse owners than they turned out to be.
 

AlexUTD

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What pisses me off the most is that they pay out £23m dividends to themselves while there is an pandemic and the club is in debt. Fecking greedy parasites!

Use those £23m on paying debt ffs!
 

limerickcitykid

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What pisses me off the most is that they pay out £23m dividends to themselves while there is an pandemic and the club is in debt. Fecking greedy parasites!

Use those £23m on paying debt ffs!
What pisses me off is countless posters not having a clue what they’re talking about.

The dividends were declared before the pandemic started.

Learn some basic finance and accounting knowledge or stop banging on about it!
 

FreakyJim

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What pisses me off is countless posters not having a clue what they’re talking about.

The dividends were declared before the pandemic started.

Learn some basic finance and accounting knowledge or stop banging on about it!
Whichever way you want to spin it, the amount of debt interest the club has payed over the years is disgusting, never mind the dividends.
 

ReallyUSA

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I rather have an evil Saudi Prince that uses the team to show off to other rich people. This shit is fecking diabolical, and I am still confused how they were allowed to even buy it in the first place.
 

AlexUTD

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What pisses me off is countless posters not having a clue what they’re talking about.

The dividends were declared before the pandemic started.

Learn some basic finance and accounting knowledge or stop banging on about it!
Actually the Glazers took out £11,9m in dividends in the 4th quarter meaning between april - june, so they actually did take out money aftet the pandemic started.

Almost every single public company in the world that pays dividends has debt...
This is a football club, not a company. The timing also is fecked up.
 

Revan

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What pisses me off the most is that they pay out £23m dividends to themselves while there is an pandemic and the club is in debt. Fecking greedy parasites!

Use those £23m on paying debt ffs!
Has been said already a few times, but that happened in February, before people really understood that there is gonna be a pandemic. It was also half the money you are saying.

Let’s see if they will take dividend in November (when they typically do).
 

limerickcitykid

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Actually the Glazers took out £11,9m in dividends in the 4th quarter meaning between april - june, so they actually did take out money aftet the pandemic started.



This is a football club, not a company. The timing also is fecked up.
Actually dividends were declared in February before the pandemic started. So they actually didn’t.

Another complete lack of understanding of how dividends even work.

And the club is most certainly a company. The timing also isn’t fecked up as they were declared before the pandemic outbreak.

More complete lack of any accounting knowledge.
 

Redjazz

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In short. All numbers as expected.

Key points fiscal year 2020 (2019)

Commercial revenue 279 (275) = up 4m
Broadcasting revenue 140 (241) = down 101m
Match day revenue 90 (111) = down 21m

Total revenue 509 (627) = down 118m
Operating profit/(loss) 5 (50) = down 45m

Cash and cash equivalents 51 (307) = down 256m

In this period we;
bought
Maguire (87m)
AWB (55m)
Bruno (55m)
Dan J (18m)

sold
Lukaku (74m)
Darmian (2,5m)
Young (1,7)

loan (2019/20) Smalling (3m)

Total transfer costs out = 215m
Total transfer income = 105m
Transfer Net = 110 (roughly)


Cash end of June 2019 = 307

Player transfers net in the period = 110m
Decrease in revenue in the period = 118m
Acquisition of treasury shares in the period = 21m

Cash end of June 2020 = 51

The pandemic hit us as expected but apart from that it was business as usual.
A few points:

Net spend for the year was around 190m.
The impact of covid on revenue (especially broadcasting) is overstated somewhat- financially, end of season games fell in to Q1 of 2021.
The big takeaway from the accounts is how cash flow was gutted by covid; normally the club generates cash flows in excess of Ebitda (132m for the account year), but for 2020 it came in at 18m. "Deferred sponsorship payments" (around 80m) and loss of preseason ticket renewals (about 50m) were the principal culprits. Presumably the former is a reversible one-off....we'll have to wait on the latter.
Anyhows, cash in hand had to carry the cost of net spend, dividends, debt interest, etc.....hence the big drop in cash from 307 to 51 (and hike in net debt).

Net debt (and talk of its volatility) is pretty meaningless for a going concern; Gross debt is where it's at and for the club that only shifts bigly in the event of a debt repayment or a refinancing (neither of which having occurred recently).
 

choccy77

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What pisses me off is countless posters not having a clue what they’re talking about.

The dividends were declared before the pandemic started.

Learn some basic finance and accounting knowledge or stop banging on about it!
Exactly, also, paying out a dividend actually more often than not pushes the share price up with investors and makes the company stronger......it's not always ideal or can look bad, but it's not necessarily a negative thing overall.
 

AlexUTD

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Actually dividends were declared in February before the pandemic started. So they actually didn’t.

Another complete lack of understanding of how dividends even work.

And the club is most certainly a company. The timing also isn’t fecked up as they were declared before the pandemic outbreak.

More complete lack of any accounting knowledge.
I am a football fan,not an accountant.I read this on the norwegian Manchester United supporter club about numbers.

The glazers has given the club massive debt and they use the money wich fans pay on interest and taking out dividends.That is all what i care about.
 

K Stand Knut

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How can we be in so much debt yet UEFA haven't even laid a finger on us about FFP? Doesn't it seem a bit odd after them going after man city for doing everything right and not being in debt?
Have things finally caught up with us for having a buffoon in charge of matters behind the scenes?
You don’t understand FFP, do you?
 

Mindhunter

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I am a football fan,not an accountant.I read this on the norwegian Manchester United supporter club about numbers.

The glazers has given the club massive debt and they use the money wich fans pay on interest and taking out dividends.That is all what i care about.
Then expand your horizons a bit. The way you are looking at the problem is very simplistic. Real life doesn't work like that. Most of our revenue is not directly through fans but indirectly through endorsements or TV revenue - more so during covid.

Any financial enterprise will have to compensate shareholders and owners in some way or another. If they don't take dividends then they will definitely expect capital appreciation which would mean our spending will only happen in areas that will improve our share price. The only reason why we are able to spend so much on short-term assets (e.g., players) is because owners are getting dividends.

You somehow disagree with the whole concept of "financial ownership" and seem to be living in a utopian world where fans provide money and some AI being spends it for the club without taking any of the risk associated with running the enterprise and without any hope of gaining from it themselves.
 

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I’m no fan of the glazers but aside from the 23m in dividends there’s nothing you can slate them for in these results. We’ve spent a lot of money on transfers and we have been fecked over By Covid. More recruitment of players like Bruno etc and we’ll get back to the top soon.
 

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7even

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I’m no fan of the glazers but aside from the 23m in dividends there’s nothing you can slate them for in these results. We’ve spent a lot of money on transfers and we have been fecked over By Covid. More recruitment of players like Bruno etc and we’ll get back to the top soon.
I agree totally with Prodigal7.

I repeat myself again!

Since we hired Ole the owners and Ed has done nothing wrong, in fact they have invested as much as possible the last two years. You find all the numbers in our two latest annual reports.

I don’t like them as owners but right now is not the time to criticize them. Same with Woodward. He knows nothing about football but as a CEO and a professional accountant he’s doing an excellent job.

If Ed has the balls to take a step back and hire a competent DoF then United’s c-level infra structure is actually quite good.
 

lsd

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They own the club they are going to take money out of it . All the moaning and stupid protests is not going to change that . Until they ever decide to sell which they have never shown any sign of doing they can do what they want
 

AlexUTD

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Then expand your horizons a bit. The way you are looking at the problem is very simplistic. Real life doesn't work like that. Most of our revenue is not directly through fans but indirectly through endorsements or TV revenue - more so during covid.

Any financial enterprise will have to compensate shareholders and owners in some way or another. If they don't take dividends then they will definitely expect capital appreciation which would mean our spending will only happen in areas that will improve our share price. The only reason why we are able to spend so much on short-term assets (e.g., players) is because owners are getting dividends.

You somehow disagree with the whole concept of "financial ownership" and seem to be living in a utopian world where fans provide money and some AI being spends it for the club without taking any of the risk associated with running the enterprise and without any hope of gaining from it themselves.
Why are we getting huge endorsements/sponsorships? Because of our massive fanbase no?

My problem with the Glazers is that they gave the club debt and income from fans etc is used to pay interest.After 15 years there is still alot of debt and Old Trafford stadium is beeing neglected.

Wonder how many times i have to say this and it is beeing ignored.
 

Prodigal7

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I agree totally with Prodigal7.

I repeat myself again!

Since we hired Ole the owners and Ed has done nothing wrong, in fact they have invested as much as possible the last two years. You find all the numbers in our two latest annual reports.

I don’t like them as owners but right now is not the time to criticize them. Same with Woodward. He knows nothing about football but as a CEO and a professional accountant he’s doing an excellent job.

If Ed has the balls to take a step back and hire a competent DoF then United’s c-level infra structure is actually quite good.
Both here and on twitter shows We have some really unhinged, irrational and often plain infantile supporters I didn’t expect. Some people are turning into a large faction of those Liverpool supporters Before they won the league, it’s getting pretty embarrassing.
 

Rightnr

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They own the club they are going to take money out of it . All the moaning and stupid protests is not going to change that . Until they ever decide to sell which they have never shown any sign of doing they can do what they want
None of that is stupid. If anything, we should be more vocal and apply real pressure. Liverpool's owners are not nicer but their fans have some backbone.
 

Prodigal7

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Why are we getting huge endorsements/sponsorships? Because of our massive fanbase no?

My problem with the Glazers is that they gave the club debt and income from fans etc is used to pay interest.After 15 years there is still alot of debt and Old Trafford stadium is beeing neglected.

Wonder how many times i have to say this and it is beeing ignored.
The debt payments are minuscule compared to the revenue we make. Under FFP we were liable to be able to spend more money than any other club in the world. And as per the statement we have done that. I understand the stadium complaints, I too would like to see more investment in the stadium, but it will take hundreds of millions and you can’t criticise our owners for not being a nation state or oligarchs favourite toy.

Nation state clubs in France and here in England (not difficult to see who) have compromised UEFA and those FFP rules are no longer being enforced properly. Our focus needs to be on getting a rule book that is enforced for FFP, otherwise there is no chance of getting back to the top when you can just be out bid for fun.
 

united for life

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Well..let's follow that logic. The dividend issued in April was $0.09 per share. Manchester United has 164,572,687 shares outstanding. Multiply one to the other and you will get $14.8m (£11.3m). The title of this thread claims debt has increased 133% to £474.1m which implies that debt used to be £203.5m, so those £11.3 for the dividends are in reality 5.6% of the previos debt levels or 2.4% of the new debt levels. Any way you look at it, that's not the reason. But don't let me spoil your moan and complain session.

I realize not everyone understands corporate finance. That's ok. But here we are talking about simple arithmetic and just googling stuff. Don't be stupid, do your research, don't follow trends and narratives just because they sound easy.
still, looks weird shareholders approve dividend distribution in such circumstances. I’m sure in April they knew the club will end up in losses. In situations like this, shareholders think of ways to inject capital not withdraw cash!!!!
 

dal

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Erm isn’t that what shareholders do?

PLCs do the same thing which is what we were before.

No problem with this, let’s keep on progressing!
 

Deery

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Is £23m not a lot to take out, how much would an average owner take out does anyone know?
 

Mindhunter

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Why are we getting huge endorsements/sponsorships? Because of our massive fanbase no?

My problem with the Glazers is that they gave the club debt and income from fans etc is used to pay interest.After 15 years there is still alot of debt and Old Trafford stadium is beeing neglected.

Wonder how many times i have to say this and it is beeing ignored.
So you want owners who are net positive in terms of investments. You expect them to put money into the club instead of taking money out of the club. There are only two situations where owners would do that:
  • When they don't need the money but crave the profile and the legitimacy that comes with owning a club of our stature
  • When it is completely fan owned or run as a completely non-profit enterprise
There are severe issues with both models and I personally won't trade our current model with either of those. Everyone knows what happens when you are a plaything for the uber-rich so I won't get into that.

The second model isn't the utopia we all believe it to be because without corporate governance which comes with the pressure to show profits every year, decision making is convoluted and slow. More often than not, it also descends into politicking and civil wars. Not to mention, fans typically don't have the financial acumen to successfully run a behemoth that we are in terms of revenues.

All of this isn't to say that Glazers are the best owners in the world. They are not and I would most definitely prefer others over them. All I am saying is that you asking for the "utopia" can have other unintended consequences which can be far more detrimental than the status quo.