citizen07 said:
SWP's back said:
You do realise their "worth" has fuck all bearing on their ability to buy anything don't you?
Its because they choose not to buy, and we should take full advantage of that. I know we all have the blue tinted glasses on but like it or not the swamp rags are one of the biggest sporting teams in the world. And if im not mistaken they have had the biggest profits turned over last quarter.
This hazard signing should be our statement that we are the team to beat.
<a class="postlink" href="http://www.guardian.co.uk/football/2012/may/17/manchester-united-debt-glazers" onclick="window.open(this.href);return false;">http://www.guardian.co.uk/football/2012 ... bt-glazers</a>
Manchester United's net debt up by £26m as income falls nearly 6%
• Glazers spend £71m on buyback of bonds and on interest
• United's cash reserves drop from £113m to £25.6m
And @dctid, they won't be able to further borrow against their assumed net worth, it is nothing like a mortgage with a fixed asset cost. They are already mortgaged to the fucking hilt. Sure, I think they spend this summer and be able to afford to but their is no limitless stream of affordable credit for Utd anymore. That's why they hid how the paid off the PIK loans, had to issue expensive (8%) bonds and looked to partially float an IPO on the Asian stock market (something they were unable to do thanks to a lack of interest).
read this very informative blog by anders red (football finance expert and a rag to boot so you know it is not anti-rag bias)
<a class="postlink" href="http://andersred.blogspot.co.uk/2012/05/manchester-united-q3-2012-results.html" onclick="window.open(this.href);return false;">http://andersred.blogspot.co.uk/2012/05 ... sults.html</a>
It's a great well informed read and finishes:
If United are to strengthen, money will be needed and that means no more bond buybacks. It probably means lower profitability, in at least the short-term, with negative implications for the valuation achievable at any IPO. The alternative may well be under investment and the club going further backwards relative to its main competitors.
The Glazers know their structure hampers the club. There was heavy briefing of journalists in the run up to the aborted IPO process last year, suggesting debt would be paid down from the IPO proceeds to make United more "competitive". If the IPO can't be delivered however, the club is stuck with its debt and the owners will have to accept lower profits or further relative decline. Can they square this circle?