United thread 2013/14

[sir baconface]

Heard that RVP being sold and his 'injury' isn't an injury that would keep him out. He is pissed that the GPC made plenty of promises that haven't been kept etc and he wants out. Similar to Rooney situation the other year although this time don't think it is about money with RVP. Maybe he has won a title (but so has Richard Wright) but had he have signed for us I have no doubt we would have won it last year as well and would be a few points clear this year already.

I assume by your use of the term "pissed" you are American or at least non-British. What is this source that you are close to?

 

[solley attwell]

This is what it feels to be City
this is what it feels to be small
you chose moysie
we picked Pellegrini,Pellegrini

 

[Clevers]

David Moyes was a man of few - but stirring - words ahead of tonight's game.

"It has always been vital to get to every cup final I can," Moyes said. "I try to win all of them and I will try to win this one as well."


Well that's worked well for him in the past.

 

[threadkiller]

But surely this would be immoral and ruin the very fabric of football!

That'll buy a lot of homegrown acadamy talent .......

 

[MihaiCity]

 

[sir baconface]

That's a difficult one to answer. My opinion has always been that they'll wait until they redeem the bonds (which they have up to mid-2017 to do), making them debt free, then make a call. It will be easier to sell debt free but then they could get their hands on plenty of cash. No one really knows how their personal finances look, which could have a big bearing.

But that was based on them floating around the top 3 or 4 without spending that much. If they don't it could all fall apart quite quickly. This could mean them cutting their losses.

But let's look at it another way. If you were thinking of buying them, would you pay top dollar now or wait a year or two to see how things pan out? If they don't finish in the CL places, their revenue drops by around 25%, key players leave and they can't attract adequate replacements then their share price plummets.

There's also another problem. In the bond prospectus there's a clause hidden in the small print that could have a major financial impact on them. As part of the issue, they also arranged a revolving credit facility. This is a sort of overdraft or a bit like a credit card, where you borrow money over the short term then pay it back but don't need to go through the hassle of arranging a loan every time. As part of that, they committed to a level of profit (EBITDA) of at least £65m a year. In the last full accounts they reported EBITDA of £108.6m. Which is very impressive until you realise that this included a (one-off) tax credit of £155m. So without that, they would have made a loss of over £45m. The previous year it was £91.6m profit, aided by a tax credit of £28m. So they would only have made a profit of £63.6m without that tax credit.

So what happens if they don't make £65m or more in a full year? In theory, they would have to repay any borrowings under the revolving credit facility and not be able to use it any more. But there's an exemption from that, which they can use only if they don't qualify for the CL in two, non-consecutive seasons. So if they don't qualify this season, 2014/15 will almost certainly see them miss the £65m figure (by a long way). But that would be OK as they have the exemption they could use. However, if they miss it for a second consecutive season, they can't do that so potentially one of their key sources of operating cashflow would be closed off to them. Then it could be panic time for Uncle Malc and the boys.

Excuse me for prodding, PB, but this raises two questions for me.

First, is CL revenue really as much as 25% of their total turnover? I was reading something in the Times today that suggested they could shrug off the loss of CL revenue if they failed to qualify. However that would be called into question if foregone revenue is of this order.

Second, I don't understand how a tax credit comes into EBITDA. I would have thought it fed into after tax earnings?

Not doubting you, mate, as I'm sure your knowledge of financial matters is way ahead of mine.

Cheers.

Sorry you're right about EBITDA - I read the FT article slightly wrong & should have said the profit of £146m included the tax credit, which was added back to get EBITDA.

CL revenues include prize money, which would be about £30m alone, gate receipts, which would be about £20m and commercial income, which might be another £20m. They turned over £350m last year so that would mean £280m from other sources if they lost that. So it depends how you measure it. Perhaps more accurate to say that CL adds about 25% to their revenue.

No worries, PB. Thank you.

 

[Le Havre Oswald]

 

[ColinBellsjockstrap]

 

[swifty]

I'd like to think of it as a collaborative project.

I think all the City fans at the swamp derby should all point at it to the classic chant " what a waste of money".. ;)

"The Chosen One - you're having a laugh..."

You chose the wrong one
You chose the wrong one
In wee davey moyes
You chose the wrong one.

 

[steviemc]