Not really, we technically owe a divident to every shareholder.
And unless they each injected X dollar to every shares they have then they to never invested any penny to the club beyond their innitial purchase of the shares.
Our debt has increased 133% to £474.1 million
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In the latest episode of the United Hour Podcast, Nik and Imran hold a long overdue conversation about United's awful league form with 1 win in 7. They discuss a disappointing draw at Bournemouth, a not so disappointing draw against Liverpool and a crushing defeat at Chelsea - Is time nearly over for Erik Ten Hag?
Then in a special second half of the pod, Nik welcomes Natalie ( https://twitter.com/natalie_17) to discuss the fortunes of Manchester United Women as they booked a place in the FA Cup Final after a historic first ever win vs. Chelsea.
And unless they each injected X dollar to every shares they have then they to never invested any penny to the club beyond their innitial purchase of the shares.
To be fair, you came on with a pretty arrogant attitude yourself. Just because this is a football forum doesn't mean you have to champion ignorance around every other subject.
A utopian World. Ha! Or maybe the poster would just prefer a football club model much more like Germany?
Which we all know he is not capable of so will never happen. The Glazers should hold him to account for the 7 years of failure but they only value the "accounts" and commercial deals.
As long as they pay their staff to the fullest and doesn't cut them because of COVID then I don't give a hoot how much they take, it's their money.
Yes the Glazers essentially slapped the acquisition debt onto the club, and it's the club that basically pays it off. So there's no doubt that it's predatory (albeit common practice in levered buyouts).
For that to make sense you also have to grow the business and increase its profits (which they have done to be fair). Our post Fergie spending has been ridiculous so I don't think we can really say that the business structure is holding us back. More the lack of long term football planning.
Not really. I thought it was brought in so clubs don't get into debt or take the mick.
All big corporations, clubs and countries have debt. Abstract concept.
Depressing.. 
If you buy a car worth 10.000, paid 500 deposits and used the car as bank guarantee to take a 10 years loan and use it for Food truck
Does it means you're a leecher? Does it means that whatever you earn from your business is not your money?
If you make money from your food truck since day #1 would it be fair if people says you don't invest a penny of your own money?
Does it means you're unethical?
Does it means you're a cnut for taking out dividends before your debt is fully paid off?
People forget that before the Glazer bought United, dividents are given. It's not like United doesn't give dividents pre-Glazer.
Does it means you're a leecher? Does it means that whatever you earn from your business is not your money?
If you make money from your food truck since day #1 would it be fair if people says you don't invest a penny of your own money?
Does it means you're unethical?
Does it means you're a cnut for taking out dividends before your debt is fully paid off?
People forget that before the Glazer bought United, dividents are given. It's not like United doesn't give dividents pre-Glazer.
If I go to a food truck and don’t like what I eat, I have no emotional investment so I go somewhere else. Football is different to normal business and to pretend otherwise is silly. I pay £708 pounds a year for a season ticket and am forced to watch the club dither around about improving the quality of the product I watch, every summer to the point it creates a negative atmosphere around the club and no doubt impacts how the season starts. The owners take my £700 and stuff it in their pocket all the same.
So you get in for free during plc?
Anyone know what the Glazers spend the dividends on do they invest it in the Tampa Bay NFL team or is it spent elsewhere in food business isn’t they used to own?
Or, is it just used to polish their fleet of yachts..
Or, is it just used to polish their fleet of yachts..
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Debt is fine. Apparently.
Look at us, Spurs, Barça etc. Absolutely shed loads of debt!
It’s about managing the debt, affordability etc.
There is certain rules I think in terms of expenditure in relation to revenue but no idea what they are.
We are so far from being touched by any FFP regulations, it’s a bit silly really
USA has always been and always will be the most indebted nation in the world and they are fine.
Look at most of the biggest companies in the world, the are nearly all in debt.
Debt isn’t the issue, it’s how to service the debt and ensure that is is manageable.
Look at most of the biggest companies in the world, the are nearly all in debt.
Debt isn’t the issue, it’s how to service the debt and ensure that is is manageable.
What you say isn't true though. Case in point, the famous protests for 'New Coke'. People react with their wallets. That's what makes businesses take notice and do something about it. In the case of Manchester United, you have a way to react: don't buy merch, don't watch games, don't click on articles related to Manchester United. All of that hurts (somewhere along the way) the club's revenues. If enough people are serious about it, it will make a difference.
I, personally, don't have a problem with the dividends and believe that an owner of a private property can do whatever they want with it. They can burn it if they like. Would I enjoy that? No. But that's my problem.
WTF
We're talking about different things. Before the Glazer take-over the club had no debt. The Glazers did not have enough funds to aquire the club so they took loans against the club's assets. Much of that loan was through PIK loans which are high interest, high risk loans.
Some fans might seem to think that the loans were re-invested in the club which is wrong, they were not. My point is that the Glazer take-over was not in the best interest of the club itself, quite the opposite. To this day around 900M £ of the clubs funds have been spent just to manage the loans.
The initial years of their take-over the loans had insane interest rates which forced us to neglect one of the best teams we've ever had (2008). We had the status to attract any player in the world at that time but the "Glazer debt" caused us not to have the economy. We didn't maintain the team, between 2005-2010 we were outspent by every top team in Europe. Chelsea, City, Real Madrid, Barcelona all outspent us by more than 500M £. Imagine 500£ in a market where players like prime Ronaldo goes for 100M. Hell even Liverpool outspent us by more than 200M during this period.
The Glazers directly caused the slip we saw just 5 years later in 2013. It wasn't bad luck, nor the natural cycle of football. Even though we had managed the high interest loans by 2010 the Glazers chose not to invest in the squad, hell why should they, we're winning right? SAF was given minimal funds, we fans kept hearing the phrase "There's no value in the market" , it was just SAF's way to say I don't have the funds.
Many blame SAF for being sentimental in his later years, for not replacing his ageing players but most likely he couldn't replace them with players of equal quality with the funds he had. We broke transfer records left and right before 2005, so SAF was never reluctant to spend but now he simply couldn't thanks to our owners.
The Glazers decided to hold their wallet until it all had gone to shit, by 2013 we needed a complete overhaul, it was too late to simply throw some money at the problem, there were no easy ways back to the top of football.
The Glazers are greedy cnuts who are directly responsible for our decline.
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I get what you're saying. Ultimately the Glazers are majority shareholders and therefore they have the right to pay themselves whatever they like.
What I would say is that they picked United up in a much better position than the position we find ourselves in now. For the last 15 years, we've seen a slow, gradual decline year after year relative to other clubs under their ownership. Relatively we were much bigger than every other club (apart from Real Madrid) in 2005 in every indicator with zero debt. We were winning trophies on the pitch season after season, Old Trafford was seeing continuous development and expansion, Carrington was ground breaking and still relatively new. There was significant investment in every area of the football club from say 1996 to 2005. I agree that money continues to be invested in the squad, however, we're falling behind off the pitch relative to other clubs (like Liverpool in the early 90's). Pretty much every big club across Europe are (pre-covid) in the process of dramatically improving their stadiums/training grounds (redevelopments/new builds), and it feels like we're standing still especially with regards to Old Trafford. Clubs are growing much faster than ourselves because they're investing a larger chunk of their profits back into the club.
Since 2005 we've paid out an astonishing amount of money for the privilege of being owned by the Glazers in debt repayments and got nothing back. Despite this and the fact that were still £474million in debt (that still needs paying off!), the Glazers continue to show their true colours by taking out significant amounts of money (whether in dividends or consultancy fees), at a time when football is being played behind closed doors which has resulted in the club's debt shooting up due to cash burn. They are seriously wealthy people and the dividend money is a drop in the ocean for them. How about they use that dividend money to subsidize season tickets for when fans return to Old Trafford and make a real difference? Of course they won't because that's not how they treat 'customers'. They expect customers to pay full whack!
They have zero intention of returning United to the club that they took over. They're here to make money at the expense of the club itself. Unfortunately they're here to stay and they will continue to pocket large amounts of money in the future. The Glazers are happy to 'invest' the bare minimum and will instead sit back and watch the value of the football industry skyrocket (through improved tv money, European Super League etc), which in turn will drag up the value of Manchester United. They couldn't care less about our decline relative to other clubs - 'As long as the money and the clubs value shoots up, who cares?'
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Aren't United actually based in the 'cayman Islands' for this entire purpose...
Fantastic post, you're spot on mate.
Not all, you forgot about the current Champions league Winner Bayern Munich. Probably the best running club in world football. In almost all aspects.
As always, without ever being pro-Glazer, I have to add some context here....the £23m dividend is roughly what we used to pay Alexis Sanchez annually for basically nothing. Furthermore, despite the debt, the club are top of the net spend table in European football for the last 3yrs and 3rd overall over the last decade.
I dislike the Glazers. They offer nothing to the club. However, we're not failing to win trophies because of our debts or them taking a £23m dividend
I dislike the Glazers. They offer nothing to the club. However, we're not failing to win trophies because of our debts or them taking a £23m dividend
That's true, but surely that's the result of the Glazers complete incompetence and failure to build any sort of football structure by placing too much trust in Ed Woodward? Hence the shocking footballing decisions, whether it's vastly overpaying for players, giving players too high salaries or renewing the contracts of deadwood. The Glazers have cost the club a fortune, whether directly or indirectly.
Total dividend payments to the Glazers stand at £99million and will continue to rise, at least Sanchez is now a thing of the past!
Posters really shouldn't have to still be posting explanations such as these. There are dozens of posts like these each year and they just get lost. One or two very young or curious caftards who needed it explained get a slightly better understanding and that's it. I very much doubt it's just those few people who need it explained each year.
There should be a thread or better yet an ultra-simplified stickied resource along the lines of How the Glazers Took Over the Club, for Dummies.
Heavy heavy heaaavy emphasis on the 'ultra-simplified'. Even simpler than an animated Tifo football video. We're talking Woodward-in-the-corner-store-negotiating-for-crisps level simplification. Then maybe a Tifo-type video, and then perhaps some in-depth explanations of what the bond issue did, what exactly the IPO did, etc. detailed explanations from caf finance experts on certain aspects so that visitors to that thread/resource can proceed as far as they feel comfortable and then ask questions based on those resources and get tailored answers.
Sheer complexities of the structure of the deal aside, I think most will agree that the two main reasons for the persistent and broad ignorance are:
1. the basic premise of the leveraged buyout is so essentially ridiculous that a huge amount of people don't understand how it works and how it worked in our case. Buy the club with its own money? What?
2. a fair chunk of the general fanbase has a vague notion of the suit-wearing Glazer children as independently successful and intelligent sophisticated self-made mega-moguls with deep pockets. What? They rely almost entirely on Woodward and are basically flying by the seat of their pants? No way, they're millionaires; they're much smarter than me.
Also, someone should think up a creative punishment for every time someone posts that 'debt is good'.
Again this is very subjective at best, the Glazers has given SAF free reign (within reasonable limit) and even Moyes/LVG/Jose/Ole are given free reign. Just because SAF chose not to spent Ronaldo money 10 years ago, that one year it's like Hillary's email all over again. All the good shits glazer did (like spending close to 1bn in 7 years) seems to pale in comparison because they don't spend that Ronaldo money.
We have spend like crazy every year, dwarf what we spend under PLC even if you account inflation. Solksjaer alone spents like 250M so far.
(now go ahead, bring me the "but Ronaldo's Money")
The Glazer aren't greedier than the next chairman, I dont see them taking anymore than what everyone take. 20M divident for the whole Owner of a 3 billion worth of assets? Hell that's a stupid return, they can get more just putting it in the bank.
Both statements are more or less correct.
"More or less" being the operative term, though.
They're ultimately responsible - period. But the evidence that their "greed" has actually hampered United undeniably in the post-SAF era is flimsy at best.
The pre-Glazer board denied SAF certain high profile transfers too - based on nothing but purely financial grounds. Just mentioning that - because it tends to be overlooked/ignored (as if the pre-Glazer model was ideal and we could just pick up any Sancho we wanted back then).
And, not least, the Glazers have spent an absolute shitload on transfers and wages since SAF retired. We can't just ignore this because it doesn't jibe very well with the idea that they're penny pinching in the extreme.
As I keep saying, if their idea is to "do an Arsenal", they're going about it in a very strange manner.
Debt is good. For two reasons:
1. Debt is a MUCH cheaper financing option than equity.
2. You can deduct the interest on the debt from corporate taxes
Debt is bad for one reason:
1. Debt is risk. Investors first and foremost look at a companys debt when gauging ROI. Anything above a ratio of 0.6 might spell problems.
Sorry, I couldn't help myself. Punish me creatively
Yes, I agree we're in decline.
But I don't blame their intention at all, they're clueless but they did opened up the chest and spent, spent, spent like mad to try to get us back to winning. I give them credit for it. If they don't spend 1bn chasing top 4 they could have paid their debt and got away with 600M more, but they didn't. They probably didn't care in the traditional sense, but they cared enough to sanction hundreds of millions to every manager (bar dithering moyes) to get us back. Even SAF said money isn't a problem, and we did broke a couple of Record (Pogba/Maguire).
Buts and ifs at the end of the day it's 1bn spent.
And for all that they took , what? 20M / year? That's peanuts, even Sanchez earns more than that. I think they're taking a very discounted token dividend which is rightfully earnt considering their whole investment is worth 3bn easilly.
I get this but... It's still not as much as we could have spent now is it?
It's basically like saying I wanted a 4 bedroom house but the bank wouldn't let me spend all of my money so could only afford a 4 bedroom house instead. Your still living in a shitter house than you could have been.
To compare us to others is also somewhat irrelevant otherwise whats the point in being the 'biggest club/brand in world football' if we can't flex that strength to it's fullest and spend the most. It's what we needed to do after losing SAF.
I don't care if we compare favourably to Chelsea and City in spend - why should I? We are Manchester United.
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Dividends are not owed, a company decides if it pays out dividends or not.
The norm is to pay dividend. How many profitable plcs doesnt?
Even under plc the shareholders are in it for profit, it's not charity
Depends on the reasons for having debt. Borrowed money invested wisely can pay off in the long term.
In our case, however, the debt due to the leveraged buyout has to be considered bad debt for Manchester United. We are effectively paying for our own takeover, basically for the pleasure of being owned by the Glazers. In reality we're getting nothing in return from our 'investment' in the Glazers.
Well, that's a discussion which merits its own thread, really - as I've said before (too).
How much could we actually (as a non-state funded, presumably not-entirely-corrupt-as-feck football club) have spent in a non-Glazer hypothetical scenario?
But, end of the day/bottom line/whatever:
For me, the anti-Glazer argument is simple enough and it has nothing to do with how much money they've actually spent (allowed to be spent) on the football side since the takeover:
Uncle Malc made his move. He shouldn't have been allowed to. Acquiring a football club (which means so much to so many people) via a leveraged takeover should be illegal. Feck capitalism and all that. But it did happen and here we are.
He was shrewd. He had Fergie in charge of the football side. We did very well on the pitch.
But then Fergie retired. And Uncle Malc died.
What his kids have allowed to happen is - essentially - this:
An insane amount of money wasted on a football "project" that has yielded shite results for years.
Based on the old (and quite reliable) wages-to-success ratio, United have under-performed badly, nay horribly - (much) more so than any comparable football club in the relevant era. And yet nothing dramatic has been done with regard to "structure". It's Woodward + a "SAF replacement", basically.
That you can blame the owners for - and that is the fundamental problem. Not that the club is in debt (that means nothing - it's par for the course) or that they take out dividends (ditto).
In short, a lack of proper leadership rather than a lack of funding (as such).
I'm looking at the overall picture, we're in decline under the Glazers relative to other clubs.
The Glazers are responsible for this mess one way or another.
Look the the club finances from 2005-2010 before defending the Glazers.
So a few things related to my comment:
1. Companies are not automatically required to pay dividends
2. Companies halt dividends primarily for good reasons.
3. This discussion (and my reply) arises from taking divien payouts during the global pandemic financial climate, not normal operations
General Motors, Harley Davidson, Expedia Group, Royal Dutch Shell, Goodyear, Plantronics, Bed Bath & Beyond, ConocoPhillips, Schlumberger, Las Vegas Sands are just some of the extremely profitable companies that have either suspended or severely reduced dividend payouts to preserve cash in the current climate.
Dividends is not always the primary motivator for investors, it really depends on the company, stage of development, a whole host of things.
Investment is not a charity, that is 100% correct. Nevertheless, the vast increase in debt on top of still taking dividends in full merely showcases that the Glazer family is not interested in investing IN the company, but taking profit. Which is their right, but in the current financial market - seeing that no other football club does this... You can't help but feel that your owners don't actually have a vested interest in the club outside of commercial opportunity.
No other club does what? taking profit?
If they want to maximize their profit they can choose to furlough some staff, reduced wage etc but they didn't. They paid their players/staff full salary, on top of that we spend a good money even for COVID standard 100M this season not counting Bruno last mid season purchase which will bring things up to 140M or therebouts.
They deliver what they're expected, granted we missed on Sancho, but they hardly being skint.
It is their club after all.
and taking a measly 20M for the whole board (probably 2-3M / person) hardly a cardinal sin. CEO / owners needs to get paid at the end of the day even during rainy days. It's fair and hardly outrageous.
You're missing the trees from the forest, you're nitpicking on them taking 20M / year but neglecting the fact that they spent a lot. And those increased debts have something to do with our player purchases, those debt won't be incrued if we don't buy players, not because they took out 20M.
I'm not american, i have no love for American at all, but I just feel the Glazers has been unjustly blamed for everything even if they did everything with the right intention albeit haven't got the result right.
Dividends are paid out as either a way for the owners to extract earnings from the company (usually when the ownership is concentrated in a few people) or as a way to make the stock more attractive so more people would buy it and thus drive the price up.
But many owners are against dividends as a rule so the money can be reinvested into the business. Prime (pun intended) example is Amazon.