City and debt

[woolleyback blue]

Try reading this

<a class="postlink" href="http://soccerlens.com/manchester-uniteds-debt-analysed/7356/" onclick="window.open(this.href);return false;">http://soccerlens.com/manchester-united ... ysed/7356/</a>

It was written in 2008 so things will have gotten worse since then.

Our owner has also said he wants City self funding so even if he does decide to end the project after 10 years by then City will be big enough to stay at the top of the tree.

 

[law74]

One thing that hasnt been mentioned here as yet is the true value of TV rights.
With setanta going bust, $ky having to offer almost every sort of deal they can think of to keep current subscribers never mind get new ones, then the next deal may not be as lucrative as that currently enjoyed by the clubs, however this saturday sees the first Pay per stream game (I think in history) when England play the Ukraine, while it is very unlikely that all clubs will agree to allowing individual clubs to negotiate their own TV deals, i think that it is possible that clubs may be able to force through a compromise whereby individual clubs could be allowed to "sell" streaming rights

 

[shepboy]

So can anyone skilled in high finance please answer this?

At which point would the financiers of the Glaziers loan normally pull the plug on it? What would be the trigger point? What needs to happen before they would come to such a decision?

On the subject of owning the ground it would seem as a good deal in the short term, but as anyone that has ever rented a property knows, we will always have the (albeit small) threat that we could be asked to leave (although that wouldn't make much financial sense for the council as who would they get to replace us).

There is another positive point to renting - for those living in Manchester that is. Our attendances put money back into the council coffers, some of which will go towards paying for all the services a council provides

 

[Big G]

So can anyone skilled in high finance please answer this?

At which point would the financiers of the Glaziers loan normally pull the plug on it? What would be the trigger point? What needs to happen before they would come to such a decision?

On the subject of owning the ground it would seem as a good deal in the short term, but as anyone that has ever rented a property knows, we will always have the (albeit small) threat that we could be asked to leave (although that wouldn't make much financial sense for the council as who would they get to replace us).

There is another positive point to renting - for those living in Manchester that is. Our attendances put money back into the council coffers, some of which will go towards paying for all the services a council provides

The financiers will only pull the plug if they cannot keep up repayments over a certain percentage, which is a lower percentage than they are paying now.
A couple of years back they needed Champs league group stage football to be able to pay off the required amount for the year, now the Champs league format has changed I am not sure where they need to be to hit the target as such.

If we leave the council would be left with a white elephant and a big hole in their budget, but we are also part of a tenancy agreement, the details I know nothing of.

 

[blue1969]

I read an article last year which said that if the rags fail to reach the knock out stages of the CL two years running that will be enough to push them over the edge.

 

[TopFloorGuy]

not only do we have no debt, the first team contracts have already been paid in full into an interest bearing investment account, so we are not dependant on ESPN coughing up Chumps league etc. If the unlikely eveny HRH Mansour decided to upsticks, we would be left in the black and not having to paid 75% of the first team for the rest of their 4/5 year contracts.
The fact that he is paying new signing salaries and contract renewals irelan/ned etc outright into this investment funds should prove he is around for the medium to long term.

Contrast this to the chelsea and they have a 50m a year shortfall and suddenly 300/400m of debt they need to pay back.

what a load of cr*p

why do people bother coming on here and spouting this rubbish when they clearly have no idea of the real position

and if i am wrong....let's see the evidence supporting the above statement because there isn't any.

 

[Prestwich_Blue]

United's debt is split between conventional debt (i.e loans) and something called PIK notes. These carry a very high rate of interest (14.25%) but they roll it up into the capital instead of paying it. The loans are secured on just about anything they can be secured on - the swamp, Carrington, season ticket income, players, etc.

They also defer some other interest so their annual bill is over £80m but they only actually pay about £45m IIRC. So the debt on the PIK notes is soing up about £25m a year but the bank debt is also going up because they're not paying all the interest. I suspect the interest they are't paying is their transfer fund (although they deny this bit they would wouldn't they).

In a few years they have to start paying all this money back, which wil cost them over £100m a year extra. There's no way I can see that they can do that at the moment without hurting themselves very badly.

As someone said, their business plan supposedly allows them to miss out on CL for a year but no more than that. As long as they can pay the interest then the banks will let them be but if they get in a position where they are struggling then the banks will have ot decide whether continuing to prop them up offers them a chance of getting their money back or whether they are better off taking their security and settling for that. However, their cashfow without the burden of debt, which would be wiped off if they went into administration, would probably allow them to come back very much stronger.

 

[fbloke]

Administration would mean the end of Uniteds' reputation and if M Platini gets involved could mean they are barred from European competition.

It would be nice to think that the club could only enjoy the pleasure of Europa/Champs league if all debts were honoured.

Oh what dreams are made of eh!

 

[Dubai Blue]

DB

Interesting comments. I am aware of the position with Palm Jebel Ali as we have unbuilt property there, now 5 years behind schedule. Interestingly, the value doubled and has now stabilised and so, yes, no vast leap in value is now likely although completion has been promised by Taqeel. We have something smaller on Jumeirah which has been rented out for a couple of years so I don't see any vast issue with that,although I know that some of the villas are nto complete. As I see it, work goes on but is just taking longer due to the technical difficulties, unless you are seriously advising me to pull out of Jebel Ali?

That is exactly what I am advising, yes. Promises from Taqeel(?????)/Nakheel are worth fuck all. If you are still seriously holding out for anything from Jebel Ali, you're fooked. Proper fooked. And that's hoping you're not tucked up in Palm Deira or The World.

 

[Project]

I don't like United but wouldn't want to see them mess up financially because of the leveraged takeover. It would be much more satisfying to be winning titles just ahead of them, rather than them being no competition at all. I've 25 years of hurt to pay back.