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

[SilverFox2]

Interest payments?

Thanks for that reply, presumably the Glazers feel that the cash is more valuable to them elsewhere rather than repaying debt.
Why would any Company prefer to keep debt when it is such a drain on outgoings ?

 

[jonmcity]

Thanks for that reply, presumably the Glazers feel that the cash is more valuable to them elsewhere rather than repaying debt.
Why would any Company prefer to keep debt when it is such a drain on outgoings ?

Companies should only take on debt, if they believe the investment of that money will bring in a larger return than what has been borrowed and the interest incurred on that dept.

 

[SilverFox2]

Companies should only take on debt, if they believe the investment of that money will bring in a larger return than what has been borrowed and the interest incurred on that dept.

Ah I see so the United profit money is removed then invested for gain elsewhere or used to prop up an otherwise vulnerable part of their Organisation ?

 

[Shaelumstash]

Ah I see so the United profit money is removed then invested for gain elsewhere or used to prop up an otherwise vulnerable part of their Organisation ?

Exactly. The Glazers have a failing real estate business in the US, they invested a lot in mini malls. It was failing anyway, not sure if it's recovered. But the income United generated was being used to prop up that other business I believe. Paying the debt off for United would make no commercial sense for them because borrowing is so cheap and United generate such a huge income.

 

[jonmcity]

Not sure the other shareholders will let them take out cash from the business. They have to sell shares to take money out these days.

 

[aguero93:20]

Not sure the other shareholders will let them take out cash from the business. They have to sell shares to take money out these days.

They take out huge salaries now instead. They also hold 100% of the voting shares so can approve whatever they want for board salaries.

 

[Neville Kneville]

Spot on. It's not anti-City/PSG, more like anti-PL.

How exactly is it anti PL compared to 'anti' any other league ?

 

[aguero93:20]

How exactly is it anti PL compared to 'anti' any other league ?

England doesn't have B teams to get around any restrictions on registration and player loans.

English clubs have more net cash to spend.

 

[Neville Kneville]

England doesn't have B teams to get around any restrictions on registration and player loans.

English clubs have more net cash to spend.

But it's 100 mil spending per team, so if you want to sell your 'B' team players off, instead of teams being able to take a chance on them, & loan them out if it fails, like they can do now, they have to buy them as part of their 100 mil budget, so only the best ones get bought (the ones you would prefer to keep) & your 'B' team is full of average players, you can't sell.

 

[aguero93:20]

But it's 100 mil spending per team, so if you want to sell your 'B' team players off, instead of teams being able to take a chance on them, & loan them out if it fails, like they can do now, they have to buy them as part of their 100 mil budget, so only the best ones get bought (the ones you would prefer to keep) & your 'B' team is full of average players, you can't sell.

The senior players at the B teams are the ones happy to stay around and guide younger players, the others don't get offered contracts or are released. Delefeou is the only player I can think of that's moved straight from the B team to a major club (Everton).