United thread 2012/13 (inc merged IPO thread)

[bluemoondays]

Going back to that marketing deal it seems very weird to me based on the sums detailed.

Chevrolet have an insignificant marketing share in Europe, and how many yanks will ever watch Manchester United.

GM, admittedly with Vauxhall/Opel, are big but the deal doesn't seem to involve that brand at all.

So they've paid $300m to advertise their product where they have extremely low market share (maybe useful) and where most of their customer won't even understand the logo - I'd have had real difficulty placing the Chevrolet logo before this and I've lived in the USA. Alternatively, they've paid $300m to advertise in their core market of which <5% will be watching the games (and that's probably generous).

Just doesn't stack up to me at all for the amount of money involved.....

 

[Anonymous]

From a marketing viewpoint I think it would make absolute sense to advertise on their shirt given the exposure they get. Whether the fgures stack up or not is a different debate in my eyes but given the success of the Etihad/Abu Dhabi tie up with us, a logo across the shirt of a club the size of those lot should be positive for any brand.

The difficulty Chevrolet have (if we are to discuss the brand and product) is that in Europe, their cars are the old Daewoos and are saddled with that brands reputation of being unreliable, cheap and nasty.

 

[gordondaviesmoustache]

Going back to that marketing deal it seems very weird to me based on the sums detailed.

Chevrolet have an insignificant marketing share in Europe, and how many yanks will ever watch Manchester United.

GM, admittedly with Vauxhall/Opel, are big but the deal doesn't seem to involve that brand at all.

So they've paid $300m to advertise their product where they have extremely low market share (maybe useful) and where most of their customer won't even understand the logo - I'd have had real difficulty placing the Chevrolet logo before this and I've lived in the USA. Alternatively, they've paid $300m to advertise in their core market of which <5% will be watching the games (and that's probably generous).

Just doesn't stack up to me at all for the amount of money involved.....

Football, and more specifically the Premier League, is about to explode in the USA imo. You could say the same about AIG and AON at the time those deals were agreed.

For a global brand, as a dick waving exercise, I imagine being on united's shirts is seen to be one of the hottest tickets. We are moving into an era where the world continues to shrink and for that reason I am not surprised about this tie up.

 

[JM Mcr]

It will take two years for the reduction of interest to make up for the set up costs and they will now be paying 35% tax instead of 27%.

It doesn't help Man Utd's finances really marvin. It helps the Glaziers though.

Still clears £75m of debt

Which makes absolutely no difference. You are being hard work. And don't make me work out the extra cost of the additional 8% tax or I'll find you and I'll kill you.

Playing devils advocate here but if this pans out, and they buy back another £75m worth of bonds that means they'll have cleared £150m of the bond debt in just over 2 years since they were issued. In total the annual interest payments will have dropped from around £43m to under £30m...

Presumably if/when they manage to increase the cash reserves held (possibly when the new tv revenue kicks in) they'll continue to buy back bonds....Now much as I despise the Glazers, and what they're doing to my club, it appears that they may actually know what they're doing and may manage to royally screw the club by continuing to bleed it dry, whilst somehow generating enough income to reduce/eventually clear the debts.

 

[gordondaviesmoustache]

Still clears £75m of debt

Which makes absolutely no difference. You are being hard work. And don't make me work out the extra cost of the additional 8% tax or I'll find you and I'll kill you.

Playing devils advocate here but if this pans out, and they buy back another £75m worth of bonds that means they'll have cleared £150m of the bond debt in just over 2 years since they were issued. In total the annual interest payments will have dropped from around £43m to under £30m...

Presumably if/when they manage to increase the cash reserves held (possibly when the new tv revenue kicks in) they'll continue to buy back bonds....Now much as I despise the Glazers, and what they're doing to my club, it appears that they may actually know what they're doing and may manage to royally screw the club by continuing to bleed it dry, whilst somehow generating enough income to reduce/eventually clear the debts.

They are anything but stupid JM. Malcolm is a canny fucker of that there's no doubt and he must have bollocks the size of cannon balls.

They are, to coin a phrase from the last decent Tory PM Edward Heath, the unpleasant and unacceptable face of capitalism, although I find what they're doing to united to be highly pleasant and most acceptable ;-)

 

[SWP's back]

Still clears £75m of debt

Which makes absolutely no difference. You are being hard work. And don't make me work out the extra cost of the additional 8% tax or I'll find you and I'll kill you.

Playing devils advocate here but if this pans out, and they buy back another £75m worth of bonds that means they'll have cleared £150m of the bond debt in just over 2 years since they were issued. In total the annual interest payments will have dropped from around £43m to under £30m...

Presumably if/when they manage to increase the cash reserves held (possibly when the new tv revenue kicks in) they'll continue to buy back bonds....Now much as I despise the Glazers, and what they're doing to my club, it appears that they may actually know what they're doing and may manage to royally screw the club by continuing to bleed it dry, whilst somehow generating enough income to reduce/eventually clear the debts.

You misunderstand the bond market mate. If they are buying back bonds, they will have to do so at a premium (over par), so £50m buying bonds may only buy £46m worth of bonds (as why would a bond holder sell at par/face value when they have an 8% coupon).

Some will refuse to sell anyway as they are happy to receive their steady 8% so will hold on for full term.

But what you say above may well be true.

 

[JM Mcr]

You misunderstand the bond market mate. If they are buying back bonds, they will have to do so at a premium (over par), so £50m buying bonds may only buy £46m worth of bonds (as why would a bond holder sell at par/face value when they have an 8% coupon).

Some will refuse to sell anyway as they are happy to receive their steady 8% so will hold on for full term.

But what you say above may well be true.

You're right, I know nothing about the bond market but even if £75m only buys back £66m or £67m worth of bonds they will still have cleared £143m or £144m of bond debt in 2 years, and reduced the annual interest payments substantially, whilst siphoning large amount of cash out of the club for themselves (management fees? interest free loans that are coincidentally repaid at the same time thet receive their dividends of the same amount?)

It's fkn unbelievable that leveraged buyouts of this kind are allowed in the game, but gotta dash now - I'm off to see if my mortgage application for buying Liverpool has been approved - putting up the tears of 50,000 scousers as security.....

 

[Eags]

I think we can all safely assume that the Glazers will always do whats best for the Glazers......

They are clearly not behind the door in terms of business acumen and certainly know how to squeeze and sweat an asset.

My guess would be that they'll continue take as much out as they can without harming the club too much, whilst reducing debt to levels where extra penalties aren't incurred in terms of interest. I think their only concern regarding debt is the extra penalties or high interest rates, I think they'd quite happily re-finance the bond debt in 2017 rather than pay it off.

When they're ready they will then sell to a Chinese/Asian buyer who can milk the 659 million followers for telecoms/TV and communications packages carrying the Utd name/brand.

I don't necessarily believe the 659 mill figure as the Glazers paid for their own survey, but if its anywhere near the truth 1 in 10 people in the world is a hell of a captive audience, most of whom are presumed of Asian descent.

 

[gordondaviesmoustache]

I don't necessarily believe the 659 mill figure as the Glazers paid for their own survey, but if its anywhere near the truth 1 in 10 people in the world is a hell of a captive audience, most of whom are presumed of Asian descent.

Figures like this are always steeped in the preposterous. How do you possibly go about proving or disproving a figure like that, especially when the definition of a 'fan' can be so arbitrarily imposed to suit the desired outcome of the 'survey'?

I bet when they 'surveyed' in Thailand, for example, it was all within the major conurbations rather than the rural areas where united's penetration will be palpably lower.

 

[Guy_Fawkes2010]

Don't know if anybodies seen this one yet. Sarbanes and Oxley's view of what the Glaziers are trying to do.



(Reuters) - English soccer club Manchester United's MANU.N planned Wall Street share offering was cited by architects of the Sarbanes-Oxley corporate accountability law as they criticized recent U.S. legislation that watered down their decade-old reforms.

"There is some potential for scandal," former U.S. Sen. Paul Sarbanes said on Monday, referring to this year's Jobs Act.

The legislation was billed by sponsors as a way to stimulate jobs by making it easier for smaller corporations to raise money, but some regulators and consumer advocates have protested that it opens the door to financial fraud.

Manchester United announced plans this month to sell shares on the U.S. market, and said it qualified as an "emerging-growth company" under terms of the Jobs Act.

Such companies, which fall below financial thresholds such $1 billion a year in revenues, have to provide less audited financial data and less disclosure than larger firms.

Those thresholds are too high, Sarbanes told a George Washington University conference commemorating the 10th anniversary of the legislation he co-sponsored with then-U.S. Rep. Michael Oxley. Bankers estimate the new rule would actually cover as much as 90 percent of companies looking to go public.

Said Oxley, "I read an article the other day where Manchester United football team is considering an IPO here in the United States. They are a startup company that has only been around 120 years."

"They're going to start an IPO here, but all the jobs are going to be in the UK. That doesn't strike me as job creating," he said.

"They're an emerging growth company," Sarbanes added.

"They've been emerging for 120 years," Oxley said, drawing laughter from the crowd.

Manchester United's initial public offering will raise as much as $333 million, valuing the club at $3.3 billion at the top of the range of the offering, which is between $16-20 a share. Revenue for the year that just ended is expected to be 315 pounds to 320 million pounds ($495 million to $503 million).

The club was acquired by Florida-based businessman Malcolm Glazer and his family in 2005. The Glazers, who have not been available for comment in recent weeks, have been criticized for burdening the company with debt through a leveraged buyout.

Manchester United said in a filing with the U.S. Securities and Exchange Commission that it intended to take advantage of some Jobs Act exemptions. "We cannot predict if investors will find our ... shares less attractive because we will rely on these exemptions," it said.

The club could not be immediately reached for comment on Tuesday.