City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[SilverFox2]

Re: City & FFP (continued)

I don't know where you two got the idea from that Manchester United is making money? As I pointed out, over the last 5 years, they have lost £40m before tax and only made a profit last year because of a tax rebate.

The Glazers took their cash out years ago and since then all the operating profit is swallowed up on debt repayment.

It would seem that the US Stock Exchange feels OK about their financial position so perhaps there is enough potential profit in other places?
However I agree that they are more likely to use FFP as an excuse to NOT invest than invest in a way that delays their asset stripping if it gets or has got to that stage.

Obviously I am speculating without financial knowledge but the point is our owners are about to reap the rewards of massive investment whereas the Glazers may not have enough financial muscle to convince the Banks that their similar spending will be appropriate.

 

[Chippy_boy]

Re: City & FFP (continued)

Don't get me wrong, I am not suggesting they are teetering on the point of bankruptcy. The problem is their huge debt interest burden, and ultimately they may have to restructure it again again (again?) to reduce their outgoings.

 

[Prestwich_Blue]

Re: City & FFP (continued)

Don't get me wrong, I am not suggesting they are teetering on the point of bankruptcy. The problem is their huge debt interest burden, and ultimately they may have to restructure it again again (again?) to reduce their outgoings.

They have to repay or re-finance the outstanding bonds (c£360m) in the next 3 years.

 

[Henkeman]

Re: City & FFP (continued)

Don't get me wrong, I am not suggesting they are teetering on the point of bankruptcy. The problem is their huge debt interest burden, and ultimately they may have to restructure it again again (again?) to reduce their outgoings.

They have to repay or re-finance the outstanding bonds (c£360m) in the next 3 years.

Presumably repaying has been put in abeyance by this mad splurge?

 

[BringBackSwales]

Re: City & FFP (continued)

Don't get me wrong, I am not suggesting they are teetering on the point of bankruptcy. The problem is their huge debt interest burden, and ultimately they may have to restructure it again again (again?) to reduce their outgoings.

They have to repay or re-finance the outstanding bonds (c£360m) in the next 3 years.

PB any idea why City have renewed so many contracts this summer - does this in any way suggest we need an amortisation benefit in the current financial year to make a profit, or as far as you know would we be profitable even without the amortisation benefit that these new deals will bring? I appreciate you will not know for sure but you will doubtless have a decent opinion

 

[pardoeofftomexico]

Re: City & FFP (continued)

I hope no-one minds me posting this here, but I wanted the FFP experts to see it and it might not be spotted in the General forum...

But are the scum going to be finding themselves restricted by FFP? I know they are a big and supposedly rich and profitable club, but looking at their accounts, they are making losses after finance costs and only got pushed into credit in 2012 and 13 after tax credits. Over the last 5 years, they have made a total loss before tax of £40m, and in their best year made only a £12m profit.

Thank you for flagging up these losses which I am sure are not realised by most people who just read in the papers of the increased turnover. I normally have better things to do myself than look at their accounts! The finance costs are over £400M for the 5 years so if they had an owner like ours they would be showing very good profits. A concern for them could be that by the time re-financing is due interest rates may have risen increasing costs further. In the normal way, of course, we would expect the amount of the loans and the interest to gradually reduce so that their business becomes more profitable. I do think that since the 2013 accounts they have probably negotiated such large increases in income that the Glazer's will be very relaxed. Clearly they will want to come out at some point and the method by which the club is then bought will then determine the profits they then have available.

 

[JoeMercer'sWay]

Re: City & FFP (continued)

Don't get me wrong, I am not suggesting they are teetering on the point of bankruptcy. The problem is their huge debt interest burden, and ultimately they may have to restructure it again again (again?) to reduce their outgoings.

They have to repay or re-finance the outstanding bonds (c£360m) in the next 3 years.

PB any idea why City have renewed so many contracts this summer - does this in any way suggest we need an amortisation benefit in the current financial year to make a profit, or as far as you know would we be profitable even without the amortisation benefit that these new deals will bring? I appreciate you will not know for sure but you will doubtless have a decent opinion

A number of reasons, but we would be profitable regardless in my estimations. In reality we've reduced our wage bill in terms of FFPR and just in terms of the outlay in basic wages, we've also put ourselves in a much stronger position in terms of negotiations with new signings, who see that their peers are signing deals along these lines and therefore we don't get messed around as much/held to ransom, and it keep the valuations of our key players sky high and away from the prying eyes of the Spanish duo and their media puppets, it's just good business practice in reality.

 

[Chippy_boy]

Re: City & FFP (continued)

I find it interesting to note that United saw it necessary to put the following statement in their 2013 annual report:

Recently approved UEFA restrictions could negatively affect our business.
As the primary governing body of European football, UEFA continually evaluates the dynamics in the football industry and considers changes to the regulatory framework governing European football clubs. As an example, UEFA recently approved certain financial monitoring rules on clubs participating in the Champions League and Europa League competitions, known as the financial fair play initiative. The rules, among other things, may result in withholding of prize money, transfer bans and ultimately disqualification from European competitions for clubs whose costs and capital expenditures on players exceed their revenue over a three year period. These rules are intended to discourage clubs from continually operating at a loss. However, the implementation of the financial fair play rules, and in particular the potential punishment for non-compliance, remains uncertain. There is a risk that application of the financial fair play initiative could have a material adverse effect on the performance of our first team and our business, results of operations, financial condition and cash flow.


It is perfectly normal (a requirement in fact) for SEC reporting that businesses identify to investors potential risks. However, it is up to the business to decide what is a risk and whether to declare it and United decided that there is sufficient risk to the business here that they must put in this statement.

 

[I'm no cynic but...]

Re: City & FFP (continued)

I find it interesting to note that United saw it necessary to put the following statement in their 2013 annual report:

Recently approved UEFA restrictions could negatively affect our business.
As the primary governing body of European football, UEFA continually evaluates the dynamics in the football industry and considers changes to the regulatory framework governing European football clubs. As an example, UEFA recently approved certain financial monitoring rules on clubs participating in the Champions League and Europa League competitions, known as the financial fair play initiative. The rules, among other things, may result in withholding of prize money, transfer bans and ultimately disqualification from European competitions for clubs whose costs and capital expenditures on players exceed their revenue over a three year period. These rules are intended to discourage clubs from continually operating at a loss. However, the implementation of the financial fair play rules, and in particular the potential punishment for non-compliance, remains uncertain. There is a risk that application of the financial fair play initiative could have a material adverse effect on the performance of our first team and our business, results of operations, financial condition and cash flow.


It is perfectly normal (a requirement in fact) for SEC reporting that businesses identify to investors potential risks. However, it is up to the business to decide what is a risk and whether to declare it and United decided that there is sufficient risk to the business here that they must put in this statement.

Well they wanted FFP. Stuff 'em.

 

[Damanino]

Re: City & FFP (continued)

Arsenal, Bayern, Chelsea seem a pretty big week maybe that week is ideal to put the financial report of 13-14 out to the public. Especially if its a positive report with close to break even results and another record income.

Unless we opt to wait as long as we can an publish it in January only.