U*****s financial mess

[Fuzzmaster101]

While it would be wonderful if it did, that article really doesn't sound all that ominous. There looking to lower the interest rate and everything else in there just says they should monetize receivables (at a discount as that's how it works) to get the debt burden to a lower level. That would all be bad from City's standpoint as lower debt service means higher cash flows. Biggest problem with the article is that it says the markets have really loosened again which suggests getting a deal together wouldn't be very hard.

I wonder how much bowing out of the FA Cup early cost them in gate receipts assuming another couple of home gates might have been available. What's their average ticket price?

Suddenly I'm a great big AC Milan fan.

There's a much much bigger picture than this. So they may reduce the interest rate a little, that still doesn't mean more money for players etc. It just eases the Glazer's burden temporarily and is heavily dependent on Ushited's revenue stream continuing at the current level. If they drop out of the Chumps league and finish poorly in the Prem their financial situation will worsen more. That will then impact on their ability to buy players next season which may effect next years performances too and so the great snowball starts to gain momentum down the slope of debt. That's without factoring in the Glazer's other financial burden The Bucs in the NFL. They may just be able to stem the tide of debt but if they do it will be close to a miracle and will almost certainly be a close call. If however Ushited's situation gets even slightly worse in terms of results/revenue streams, the financial slide will be catastrophic!

 

[Uber Blues]

It's all getting way to close to the edge for them. If AC kick them out of UCL and we, all be It a lesser hit knock them out of this Semi the season starts to take on the Meltdown look.
I can honestly see them finishing 3rd this year, however I hope and pray It's 5th!

 

[Footyblue]

Don't you think though that the very fact the Glazers are looking for a "deal" is bad?

You are right that it isn't great for them. But the article says that back in the fall there was real public concern the debt wouldn't be serviced. So the debt traded way down. Now there's signs of a deal and the debt is trading up. If anything the article is all bad news because the main point is there is a thawing of credit that let's them get the debt restructured.

All this really shows is how awful football is as a business. The self proclaimed biggest club on earth is losing big money every year no matter how much they win. Long term that isn't sustainable. Good for the clubs who have owners ready to bankroll them and have no need to take on debt.

They probably pull in at least 4 million a game in gate receipts, selling trinkets and the like. So thats 8 million of revenue totally lost from the FA Cup if they got two more home games out of the tournament. When you are losing money, every million hurts a bit.

 

[mackenzie]

Don't you think though that the very fact the Glazers are looking for a "deal" is bad?

You are right that it isn't great for them. But the article says that back in the fall there was real public concern the debt wouldn't be serviced. So the debt traded way down. Now there's signs of a deal and the debt is trading up. If anything the article is all bad news because the main point is there is a thawing of credit that let's them get the debt restructured.

All this really shows is how awful football is as a business. The self proclaimed biggest club on earth is losing big money every year no matter how much they win. Long term that isn't sustainable. Good for the clubs who have owners ready to bankroll them and have no need to take on debt.

They probably pull in at least 4 million a game in gate receipts, selling trinkets and the like. So thats 8 million of revenue totally lost from the FA Cup if they got two more home games out of the tournament. When you are losing money, every million hurts a bit.

You reckon 4 mill? Seriously doubt that to be honest.

 

[Footyblue]

Place seats 75,000. I have no idea what the average ticket costs there. If it was 50 on average that gets you pretty close to 4 million. Sell some food and drink and trinkets and you are over it pretty easy. Not sure what the place costs to run for a game.

 

[Prestwich_Blue]

You are right that it isn't great for them. But the article says that back in the fall there was real public concern the debt wouldn't be serviced. So the debt traded way down. Now there's signs of a deal and the debt is trading up. If anything the article is all bad news because the main point is there is a thawing of credit that let's them get the debt restructured.

All this really shows is how awful football is as a business. The self proclaimed biggest club on earth is losing big money every year no matter how much they win. Long term that isn't sustainable. Good for the clubs who have owners ready to bankroll them and have no need to take on debt.

They probably pull in at least 4 million a game in gate receipts, selling trinkets and the like. So thats 8 million of revenue totally lost from the FA Cup if they got two more home games out of the tournament. When you are losing money, every million hurts a bit.

You reckon 4 mill? Seriously doubt that to be honest.

They pull in about £3m a game on average. So a couple of home cup ties will cost them £6m and if they go out in the next round of the CL that's probably another £10m down the tubes.

 

[mackenzie]

You reckon 4 mill? Seriously doubt that to be honest.

They pull in about £3m a game on average. So a couple of home cup ties will cost them £6m and if they go out in the next round of the CL that's probably another £10m down the tubes.

For a 3rd round FAC game?

Really????

I am amazed!!

 

[blueprint]

3.

No point scoffing at Utd's finances unless you know what you are talking about

Follow why Lehman Bros was sunk and Akerlof's Theory 'The Market for Lemons'.
?

Huh? The Market for Lemons? What asymmetric information exists in the marketplace for refinancing a football club? It's a one on one transaction that can involve all the due diligence necessary.

United have different problems I think. More likely they can't securitize their income stream because due diligence would reveal that the majority of their "fans" would switch their spending to buy Chelsea or Real Madrid shirts given half an excuse.

Case in point. Was Vidic (pre Torres/Kenwynne skinners) touted to be the best defender and rated more than £30m valuation. Right now he's a £20m target by RM. His value is going lower because of a number of reasons! Does that conform to the theory of 'The Market for Lemons'.

OK just subs MU (seller) RM (buyer), Vidic ( lemon car) and MU asymmetric information on his mental and physical condition and MU financial plight to the following

The Market for Lemons: Quality Uncertainty and the Market Mechanism" is a 1970 paper by the economist George Akerlof. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. Akerlof, Michael Spence, and Joseph Stiglitz jointly received the Nobel Memorial Prize in Economic Sciences in 2001 for their research related to asymmetric information. Akerlof's paper uses the market for used cars as an example of the problem of quality uncertainty. There are good used cars and defective used cars ("lemons"), but because of asymmetric information about the car (the seller knows much more about the problems of the car than the buyer), the buyer of a car does not know beforehand whether it is a good car or a lemon. So the buyer's best guess for a given car is that the car is of average quality; accordingly, he/she will be willing to pay for it only the price of a car of known average quality. This means that the owner of a good used car will be unable to get a high enough price to make selling that car worthwhile.

Therefore, owners of good cars will not place their cars on the used car market

 

[Prestwich_Blue]

They pull in about £3m a game on average. So a couple of home cup ties will cost them £6m and if they go out in the next round of the CL that's probably another £10m down the tubes.

For a 3rd round FAC game?

Really????

I am amazed!!

I think s/t holders still have to buy FA Cup tickets anyway and their average price is around £40.

Look at it another way - their gate receipts were over £100m last financial year. Last season they played 19 league games, 6 CL games (plus the final), 1 FA Cup game (plus a semi) and 4 Carling Cup games (plus a final). That makes 30 home games plus the others at neutral grounds. So £3m a game is the right figure.

 

[PaleBlue]

They will finish in the top four this season, if not win it - so forget about them not playing Chumps League next year. I doubt they'll ever go under financially so lets just beat them where it counts, on the pitch.