We have really got to them

[samharris]

What superb posts up there. Thanks PB as always your insight is most welcome.

Wasn't the project to be in 5 phases over twenty years, but we are ahead already.

I don't know whether this has been posted in its own thread and it probably should but here is Swiss Rambles take on the new TV deal, i suspect PB has already read it digested it and number crunched it but if he hasn't maybe he will. Looks like a bumper pay day.

<a class="postlink" href="http://swissramble.blogspot.co.uk/" onclick="window.open(this.href);return false;">http://swissramble.blogspot.co.uk/</a>

I read that and think I got it.

 

[Prestwich_Blue]

What superb posts up there. Thanks PB as always your insight is most welcome.

Wasn't the project to be in 5 phases over twenty years, but we are ahead already.

I don't know whether this has been posted in its own thread and it probably should but here is Swiss Rambles take on the new TV deal, i suspect PB has already read it digested it and number crunched it but if he hasn't maybe he will. Looks like a bumper pay day.

<a class="postlink" href="http://swissramble.blogspot.co.uk/" onclick="window.open(this.href);return false;">http://swissramble.blogspot.co.uk/</a>

I haven't had time up to now, having been working an insane schedule, but have just read it as I've got some free time. It just couldn't have worked out better for us really, particularly with regard to FFP. It's an amazing deal and shows how reliant Sky are on live football.

There's plenty you could fault Scudamore for in his managing of the PL butyou can't fault him on the commercial side. Of course the down-side is that it gets the Glazers off the hook a little but you can't have everything.

The other thing that struck me is how it all fits into the "agenda" debate. The rights for live TV come up for renegotiation in difficult economic times and it's suddenly the best ever PL season. How fortunate eh?

 

[Vienna_70]

I'm a postman and today's deliveries included letters from the swamp inviting applications for season tickets.

I mentioned this to a very obnoxious rag, asking, "Having trouble selling your season tickets?"

His response: "No, it's the economic climate".

"We've sold out ours", I smugly replied.

"But you only get 40 000 every match; we get 78 000."

"You don't even know the capacity of your stadium. It's 76 000 and ours holds 48 000."

He claims he is a ST holder, but I have yet to ask him after which goal he left on 23/10/11. I will at some point.

Right, I finally got round to asking him today and the conversation went something like this:

Me: I've got a question for you. On the 23rd October last year, after which goal did you leave?

Rag: Sorry, say that again.

Me: On the 23rd October last year, after which goal did you leave?

Rag:Which game was that? Was it the Manchester City derby? (at this point he started to look really uncomfortable)

Me: There is only one derby.

Rag: Um, I think it was after the third.

I just smiled at him and walked away. It told me all I needed to know.

 

[baldmosher]

And when United actually get around to winning something again, it will be 'City back in their place, Ferguson sees off City, just as he did with Chelsea!'

Revisionist history experts.

Every United youngster is a worldy, every defeat has a legitimate excuse, and everyone outside of a few, fucking lap it up as gospel.

I simply pose this question, what narrative will they paint when he either drops dead on the bench or his armchair, and all because his ego won't allow him to trust anyone to spend the next 20 years keeping us at bay.

When he pops his clogs, he will be their Munich for the new age.

His funeral will be sponsored and you'll be able to buy fergie coffins in the megamega store , not forgetting a new clock stopped at the minute he dies.

No doubt emblazoned in green and 'gold' lettering underneath: 'It's Fergie Time!'

 

[Notinmylifetime]

They're trying to re-list Utd this time in the States. If they do that they will be able to pay of large proportion of their debts, if not all of it.

Not as a football club, or even a sporting brand, but as a media company. Even then the money raised won't even come close to wiping their debt, thanks to Uncle Malc. Stormy seas ahead for the scum.

Utd is a cash cow for the Glazers, the model they operate is to invest the minimum amount of money required to maintain the club at optimum performance, while squeezing as much money out to service their debts, a model all companies aspire to, though profit ideally would go to investors rather than debt servicing.

Why spend more money than you need to be the best? Well, suddenly to be the best costs more money, courtesy of City.

This fight between City and Utd is not just a conflict between two teams or even two managers, it is first a contest between Sheikh Mansour and the Glazers. In a straight fight it is no contest, the Sheikh can outspend the Glazers without breaking a sweat, but Utd's vast fan base and the immense income that flows from it, coupled with "Financial Fair Play", hamper City big time.

The story I'd love to know is not the infamous "trajectory of results" that saw Hughes go, but the trajectory of income. I know a little about this, with the emphasis on "little" but I'd love to know what's going on behind Khaldoons icy cool exterior, what is the real plan? On the surface it is almost impossible to imagine a business model that can control our current deficit. There is no doubt that City are doing all the things one would expect of a club trying to nurture a growing worldwide fan base and the income that will eventually flow from it, but questions remain.

Put simply, what is the "Critical Path Analysis"?..... What are the tasks which must be completed on time for the whole project to be completed on time, what is the minimum length of time needed to complete the project, and on a more basic level, when you strip out all the rhetoric, what is the project? Where will we be in five years time? What targets have we set ourselves for income generation? How are we going to get our deficit down? And if we can't get it down will it matter? Given that FFP is untested and has no "validity", as far as corporate governance is concerned.

I search high and low amongst the sea of bollocks about City to find this stuff out, but answers there are none. Truth is we know more about the Chinese space programme than we do about the "City Project".

I'll ask all your questions next time I'm in Mary D's. Whatever the answers there's no denying it feels very good at the moment. CTID.

 

[JoeMercer'sWay]

it's threads like this that make me love PB.

 

[VOOMER]

Utd is a cash cow for the Glazers, the model they operate is to invest the minimum amount of money required to maintain the club at optimum performance, while squeezing as much money out to service their debts, a model all companies aspire to, though profit ideally would go to investors rather than debt servicing.

Why spend more money than you need to be the best? Well, suddenly to be the best costs more money, courtesy of City.

This fight between City and Utd is not just a conflict between two teams or even two managers, it is first a contest between Sheikh Mansour and the Glazers. In a straight fight it is no contest, the Sheikh can outspend the Glazers without breaking a sweat, but Utd's vast fan base and the immense income that flows from it, coupled with "Financial Fair Play", hamper City big time.

The story I'd love to know is not the infamous "trajectory of results" that saw Hughes go, but the trajectory of income. I know a little about this, with the emphasis on "little" but I'd love to know what's going on behind Khaldoons icy cool exterior, what is the real plan? On the surface it is almost impossible to imagine a business model that can control our current deficit. There is no doubt that City are doing all the things one would expect of a club trying to nurture a growing worldwide fan base and the income that will eventually flow from it, but questions remain.

Put simply, what is the "Critical Path Analysis"?..... What are the tasks which must be completed on time for the whole project to be completed on time, what is the minimum length of time needed to complete the project, and on a more basic level, when you strip out all the rhetoric, what is the project? Where will we be in five years time? What targets have we set ourselves for income generation? How are we going to get our deficit down? And if we can't get it down will it matter? Given that FFP is untested and has no "validity", as far as corporate governance is concerned.

I search high and low amongst the sea of bollocks about City to find this stuff out, but answers there are none. Truth is we know more about the Chinese space programme than we do about the "City Project".

Interesting post which is worthy of comment.

The Glazers' business model is a classic LBO (leveraged buy out) which involves minimal cash investment and taking on huge debt, secured on the assets of the target company. The aim is usually to strip out costs and generate sufficient cashflow to service the debt, then sell it on or float it, usually with the debt mostly intact. This happened with the deal announed today for Walgreen to buy Boots. The original investors multiply their original stake but Walgreen take on the debt.

The problem the Glazers have is that you can't aggressively reduce costs at a football club (unless you're happy for the club to fail on the field) so their model involved increasing revenue. They believed that the rags were under-exploited commercially and that's proved to be the case. They've squeezed fans via ticket prices, to the point where they just about sell out games. Economically, that's the optimum pricing strategy where demand just about equals supply. They generate something like £4m a game compared to our £1m. Even allowing for the different capacities that's very good business. They've also hugely increased commercial revenues but I think you overestimate the impact that foreign fans have directly financially. I doubt it's that significant. I do agree that their global popularity and brand recognition is a big factor in their commercial revenue but I doubt fans contribute to that directly. They also didn't count on the rags' tight wage structure getting ripped apart by Rooney.

We've gone the opposite route where the owner has invested cash to build up an unsuccessful business. That takes time of course but our route to financial success is fairly clear I think.

Step 1 was to achieve top 4 and CL qualification. CL revenues are very significant and 8 or 9 games in Europe can bring in the same revenue as 38 games in the domestic season. We've achieved that.

Step 2 was to win the title. This has two benefits in that it increases our global profile and qualifying for the CL as champions increases our share of the substantial market pool. We've now achieved that.

Step 3 (and the next one to tick off) is to do well in the CL. Not necessarily winning it but getting to at least the last 8 regularly and preferably beyond that. The further we go, the more money we get.

Step 4 is to convert the higher profile into commercial revenue by attracting more and better sponsors and increasing our premium seating/hospitality offering. There is potentially an awful lot of money in that latter approach and the former is now showing results, with the Etihad deal, the new Nike kit deal and other significant deals apparently in the pipepline. Being owned by ADUG helps enormously as it's now understood that a commercial arrangment with City is a key requirement to do significant business in Abu Dhabi.

So how does that translate into money? Well it's generally reckoned that with the CL revenue and Etihad deal leading the way, we'll report something like a 50% revenue increase for the financial year just ended, to about £220m. This will still leave us with a loss around the £100m level (possibly a little less). For the current year, assuming we do better in the CL and with the Nike deal in place, plus others to be announced, we should be looking at around £275m revenue and a small loss (around £20m?).

The following year (2013/14) the new TV deal comes in and I'd expect a revenue figure of something like £330m. More importantly, we should be well in profit and self-sustaining.

All of which makes me think my estimate, of the rags still being in significant debt in 20 years as being fairly accurate?
Also if we continue in a successfull manner on the pitch, then our profile will grow of it. We have barely tapped into our commercial potential and further regular success on the pitch, would see sponsors across the sporting world reviewing their options.

 

[Vienna_70]

And getting into the hearts and souls of all those American kids by providing the pitches as we are doing in the large cities, will no doubt help in our quest to conquer the States.

 

[Marvin]

Utd is a cash cow for the Glazers, the model they operate is to invest the minimum amount of money required to maintain the club at optimum performance, while squeezing as much money out to service their debts, a model all companies aspire to, though profit ideally would go to investors rather than debt servicing.

Why spend more money than you need to be the best? Well, suddenly to be the best costs more money, courtesy of City.

This fight between City and Utd is not just a conflict between two teams or even two managers, it is first a contest between Sheikh Mansour and the Glazers. In a straight fight it is no contest, the Sheikh can outspend the Glazers without breaking a sweat, but Utd's vast fan base and the immense income that flows from it, coupled with "Financial Fair Play", hamper City big time.

The story I'd love to know is not the infamous "trajectory of results" that saw Hughes go, but the trajectory of income. I know a little about this, with the emphasis on "little" but I'd love to know what's going on behind Khaldoons icy cool exterior, what is the real plan? On the surface it is almost impossible to imagine a business model that can control our current deficit. There is no doubt that City are doing all the things one would expect of a club trying to nurture a growing worldwide fan base and the income that will eventually flow from it, but questions remain.

Put simply, what is the "Critical Path Analysis"?..... What are the tasks which must be completed on time for the whole project to be completed on time, what is the minimum length of time needed to complete the project, and on a more basic level, when you strip out all the rhetoric, what is the project? Where will we be in five years time? What targets have we set ourselves for income generation? How are we going to get our deficit down? And if we can't get it down will it matter? Given that FFP is untested and has no "validity", as far as corporate governance is concerned.

I search high and low amongst the sea of bollocks about City to find this stuff out, but answers there are none. Truth is we know more about the Chinese space programme than we do about the "City Project".

Interesting post which is worthy of comment.

The Glazers' business model is a classic LBO (leveraged buy out) which involves minimal cash investment and taking on huge debt, secured on the assets of the target company. The aim is usually to strip out costs and generate sufficient cashflow to service the debt, then sell it on or float it, usually with the debt mostly intact. This happened with the deal announed today for Walgreen to buy Boots. The original investors multiply their original stake but Walgreen take on the debt.

The problem the Glazers have is that you can't aggressively reduce costs at a football club (unless you're happy for the club to fail on the field) so their model involved increasing revenue. They believed that the rags were under-exploited commercially and that's proved to be the case. They've squeezed fans via ticket prices, to the point where they just about sell out games. Economically, that's the optimum pricing strategy where demand just about equals supply. They generate something like £4m a game compared to our £1m. Even allowing for the different capacities that's very good business. They've also hugely increased commercial revenues but I think you overestimate the impact that foreign fans have directly financially. I doubt it's that significant. I do agree that their global popularity and brand recognition is a big factor in their commercial revenue but I doubt fans contribute to that directly. They also didn't count on the rags' tight wage structure getting ripped apart by Rooney.

We've gone the opposite route where the owner has invested cash to build up an unsuccessful business. That takes time of course but our route to financial success is fairly clear I think.

Step 1 was to achieve top 4 and CL qualification. CL revenues are very significant and 8 or 9 games in Europe can bring in the same revenue as 38 games in the domestic season. We've achieved that.

Step 2 was to win the title. This has two benefits in that it increases our global profile and qualifying for the CL as champions increases our share of the substantial market pool. We've now achieved that.

Step 3 (and the next one to tick off) is to do well in the CL. Not necessarily winning it but getting to at least the last 8 regularly and preferably beyond that. The further we go, the more money we get.

Step 4 is to convert the higher profile into commercial revenue by attracting more and better sponsors and increasing our premium seating/hospitality offering. There is potentially an awful lot of money in that latter approach and the former is now showing results, with the Etihad deal, the new Nike kit deal and other significant deals apparently in the pipepline. Being owned by ADUG helps enormously as it's now understood that a commercial arrangment with City is a key requirement to do significant business in Abu Dhabi.

So how does that translate into money? Well it's generally reckoned that with the CL revenue and Etihad deal leading the way, we'll report something like a 50% revenue increase for the financial year just ended, to about £220m. This will still leave us with a loss around the £100m level (possibly a little less). For the current year, assuming we do better in the CL and with the Nike deal in place, plus others to be announced, we should be looking at around £275m revenue and a small loss (around £20m?).

The following year (2013/14) the new TV deal comes in and I'd expect a revenue figure of something like £330m. More importantly, we should be well in profit and self-sustaining.

All of which makes me think my estimate, of the rags still being in significant debt in 20 years as being fairly accurate?
Also if we continue in a successfull manner on the pitch, then our profile will grow of it. We have barely tapped into our commercial potential and further regular success on the pitch, would see sponsors across the sporting world reviewing their options.

You can not predict what the Glazers are going to do with the club over 20 years. Utd have plans to sell shares in the club in America. The terms have yet to emerge, but that would potentially clear their debts and leave the Glazers in control. I know there were reports of disagreements over the terms - but it's still a way out for Utd and one I am sure they will take. They'd have done it by now if it wasn't for the turbulence across a lot of financial markets.

In a perfect world Utd drop out of the top 4 i the coming season, before they float

 

[The Pink Panther]

You can not predict what the Glazers are going to do with the club over 20 years. Utd have plans to sell shares in the club in America. The terms have yet to emerge, but that would potentially clear their debts and leave the Glazers in control. I know there were reports of disagreements over the terms - but it's still a way out for Utd and one I am sure they will take. They'd have done it by now if it wasn't for the turbulence across a lot of financial markets.

In a perfect world Utd drop out of the top 4 i the coming season, before they float

The rags being debt free whilst the Glazer's are in control will give them a bit more buying power in the transfer market
However the Glazers are milking the rags for every penny they can get, so even if the rags didn't have to pay £50m+ interest repayments every year, the Glazers would take as much as possible of the profit out of the "club"