MillionMilesAway
Well-Known Member
Firstly, there is NOTHING wrong with a leveraged buy out.
Whenever you use your credit card or take a home or vehicle loan, you are essentially 'leveraging' your ability to generate future cash flows in order to pay for an asset right now.
The bet that the Glazers took were:
1. Premier league would get more cash through TV deals and Sponsorship.
2. SAF would maintain sustained success on relatively lesser funding. Prize money would be greater than cost of playing.
3. Utd would be able to attract sponsorship over and above its rivals due to its success.
All 3 came true and that to me makes them excellent businessmen.
By allowing SAF to run the team as he pleased (spending on wingers at the cost of midfielders, spending 20 mil on a 30 year old striker, etc.) they moved from being good businessmen to being good owners.
Also, Manchester United have the 3rd highest Profit before Tax even after accounting for interest and loans payable.
The loans are all under control. There is a schedule according to which it has to be payed.
The Arabs are betting on the fact that:
1. Oil prices will remain high (oil prices have collapsed by over 50% since January 2014).
2. Their regime won't collapse (There was an unsuccessful Arab spring, people remain dissatisfied).
3. They can use their influence to inflate Sponsorship deals.
4. Even if points 1, 2 and 3 turn out to be wrong bets then by that time City would have been sustainable.
Wow, did you miss the point about different owners.
We all know the Glazers are making out like bandits, milking millions from Utd, and not spending that much of their own money. It's undeniable.
However, and you seem to have missed this tiny point, The Glazers have stripped several hundred million from Utd. The sheikh has put in several hundred million and taken nothing out. I wonder which a fan of the club thinks is doing best for the club.
ADUG are in fact assuming that the oil will run out at some point, and need to diversify their portfolio. To do that, they need to be known, reputable and successful. The oil price is utterly immaterial to their aim, other than minor amendments to timetables.
Abu Dhabi is pretty stable.
Ah, the inflated sponsorship deal thingy again. I think that's standard whine number 6. Those deals have been signed off by auditors as being fair value. Maybe you kow more than qualified accountants.
Point 4 - well, I have no idea what that might be meant to mean.