When will City pass Utd's revenue?

[Prestwich_Blue]

I don't know the details of how the debt is structured.
The important part of what they reported is "The gross USD debt principal remains unchanged."

According to last year's accounts, there is a Senior Secured Loan Notes Facility of $425m, which is repayable by 2027 and a Secured Loan facility of $225m which is repayable by 2025. There are no capital repayments on these currently so unless there is, they'll have to be repaid in full on the agreed dates. That might well be via a refinancing so (to answer @BlueAnorak) the likelihood is that these liabilities will remain in full on the books for the medium to long term.

These debts are owed by Manchester United Limited to MU Finance Limited, which appears to be the company that holds the debt. MU Finance has a current liability of £123m to group undertakings, which I'm guessing is something to do with transfer fees outstanding. They've also got an overdraft facility of £125m, which they haven't used as yet but they might if their cashflow continues its downwards trend.

What we don't know is what debt is hidden in the trusts that control Manchester United plc, which is the ultimate holding company in the UK. The Glazers had to refinance the debt they'd taken on in PIK notes, where interest is rolled up into the capital each year and compounds at huge cost. They will have taken further loans to repay those and my guess is those loans will be secured on their United shares and that some of their business debts might well also be secured on those.

 

[jrb]

We'll never catch United.

They will remain at the top, they have too much power in football, will always attract the biggest sponsors, with the best sponsorship deals, have too much positive media presence, have to much say in running football here and in Europe, will always attract the best players, and have too many fans around the World.

The only way we will reel them in over time is by continually being successful, while they continue to falter, but that can't continue forever. Football is ebb and flow.

Our future aims should be to keep Arsenal, Liverpool, Chelsea and Spurs away from us, and try to catch Bayetn Munich. It pains me to say it, but to do that we need to win the CL, and to an extent become one of the UEFA cartel clubs. I feel sick at the thought.

 

[Jalfraag]

According to last year's accounts, there is a Senior Secured Loan Notes Facility of $425m, which is repayable by 2027 and a Secured Loan facility of $225m which is repayable by 2025. There are no capital repayments on these currently so unless there is, they'll have to be repaid in full on the agreed dates. That might well be via a refinancing so (to answer @BlueAnorak) the likelihood is that these liabilities will remain in full on the books for the medium to long term.

These debts are owed by Manchester United Limited to MU Finance Limited, which appears to be the company that holds the debt. MU Finance has a current liability of £123m to group undertakings, which I'm guessing is something to do with transfer fees outstanding. They've also got an overdraft facility of £125m, which they haven't used as yet but they might if their cashflow continues its downwards trend.

What we don't know is what debt is hidden in the trusts that control Manchester United plc, which is the ultimate holding company in the UK. The Glazers had to refinance the debt they'd taken on in PIK notes, where interest is rolled up into the capital each year and compounds at huge cost. They will have taken further loans to repay those and my guess is those loans will be secured on their United shares and that some of their business debts might well also be secured on those.

Thanks for that explaination.
They've built a financial house of cards that should hamper their transfer dealing for many years to come.

 

[Jalfraag]

We'll never catch United.

They will remain at the top, they have too much power in football, will always attract the biggest sponsors, with the best sponsorship deals, have too much positive media presence, have to much say in running football here and in Europe, will always attract the best players, and have too many fans around the World.

The only way we will reel them in over time is by continually being successful, while they continue to falter, but that can't continue forever. Football is ebb and flow.

Our future aims should be to keep Arsenal, Liverpool, Chelsea and Spurs away from us, and try to catch Bayetn Munich. It pains me to say it, but to do that we need to win the CL, and to an extent become one of the UEFA cartel clubs. I feel sick at the thought.

Never is a long time.
I'd replace never with about 5 years.

 

[gordondaviesmoustache]

Never is a long time.
I'd replace never with about 5 years.

‘Never’ certainly is a long time. How can anyone predict the future with such certainty, given what’s occurred over the last decade?

 

[BlueAnorak]

According to last year's accounts, there is a Senior Secured Loan Notes Facility of $425m, which is repayable by 2027 and a Secured Loan facility of $225m which is repayable by 2025. There are no capital repayments on these currently so unless there is, they'll have to be repaid in full on the agreed dates. That might well be via a refinancing so (to answer @BlueAnorak) the likelihood is that these liabilities will remain in full on the books for the medium to long term.

These debts are owed by Manchester United Limited to MU Finance Limited, which appears to be the company that holds the debt. MU Finance has a current liability of £123m to group undertakings, which I'm guessing is something to do with transfer fees outstanding. They've also got an overdraft facility of £125m, which they haven't used as yet but they might if their cashflow continues its downwards trend.

What we don't know is what debt is hidden in the trusts that control Manchester United plc, which is the ultimate holding company in the UK. The Glazers had to refinance the debt they'd taken on in PIK notes, where interest is rolled up into the capital each year and compounds at huge cost. They will have taken further loans to repay those and my guess is those loans will be secured on their United shares and that some of their business debts might well also be secured on those.

Cheers for that. I'd forgotten they'd only taken out an interest only mortgage. It will be interesting to see how their cash reserves develop over the next 10 years to make the final repayment.
Boy as a club they've thrown a load of cash away.

 

[Prestwich_Blue]

As you all know I always like to dig around the interweb looking for the reports behind the headlines.

KPMG have just released their Football Clubs’ Valuation: The European Elite 2018 report.

United top it. No surprises there.

I've taken some screen grabs. And the link to the full PDF report is below. Loads of interesting data.

As for City, we seem to have cemented 5th place behind Bayern. Aresenal are 't far behind us though.

The downside of those figures is that they use a measure called Enterprise Value. That involves taking a companies market capitalisation (share price x number of shares) then adding net debt. The rationale is that you buy the shares and the debt but that's balanced out by any cash or or liquid assets you get. So if there's a company that has 100m shares at £2.50 a share, has debt of £50m and has £20m in cash. The EV of that company will be £280m. If you have a similar company but with no debt, the EV will be £230m. So debt has a "value" as far as EV is concerned. Also there is nothing to judge most of those clubs' market capitalisation on accurately as most, us included and apart from United, aren't quoted on any stock market. Therefore it's just an educated guess as to what we're worth via EV.

The best way to value football clubs consistently is via the Markham Multivariate Model and a recent valuation based on the 2017 accounts for all PL clubs (https://news.liverpool.ac.uk/2018/0...ague-table-still-topped-by-manchester-united/) had United at the top with just under £2.5bn with us just behind Chelsea at just under £2bn. Ours has dropped significantly largely due to the loss of profits because of the extending of the accounting period to 13 months. I also think that Chelsea's figure does not take into account the £1bn-plus debt that their holding company owes to Abramovich. In the next set of accounts I think our profit will be much higher and that United's will be flat or lower. Therefore there's a good chance we could close the gap.

 

[Prestwich_Blue]

Cheers for that. I'd forgotten they'd only taken out an interest only mortgage. It will be interrsting to see how their cash reserves develop over the next 10 years to make the final repayment.
Boy as a club they've thrown a load of cash away.

They have and bless the Glazers for that. They'll probably just refinance, as they've done a few times in the past. Looking at their recent 3rd quarter results, their cash-flow was significantly worse than at the same time the previous season and that was with CL cash coming in, which they weren't getting in 2016/17. What they're paying out in fees and wages is hurting them noticeably.

 

[Jalfraag]

The downside of those figures is that they use a measure called Enterprise Value. That involves taking a companies market capitalisation (share price x number of shares) thne adding net debt. The rationale is that you buy the shares and the debt but that's balanced out by any cash or or liquid assets you get. So if there's a company that has 100m shares at £2.50 a share, has debt of £50m and has £20m in cash. The EV of that company will be £280m. If you have a similar company but with no debt, the EV will be £230m. So debt has a "value" as far as EV is concerned. Also there is nothing to judge most of those clubs' market capitalisation on accurately as most, us included and apart from United, aren't quoted on any stock market. Therefore it's just an educated guess as to what we're worth via EV.

The best way to value football clubs consistently is via the Markham Multivariate Model and a recent valuation based on the 2017 accounts for all PL clubs (https://news.liverpool.ac.uk/2018/0...ague-table-still-topped-by-manchester-united/) had United at the top with just under £2.5bn with us just behind Chelsea at just under £2bn. Ours has dropped significantly largely due to the loss of profits because of the extending of the accounting period to 13 months. I also think that Chelsea's figure does not take into account the £1bn-plus debt that their holding company owes to Abramovich. In the next set of accounts I think our profit will be much higher and that's United's will be flat or lower. Therefore there's a good chance we could close the gap.

KPMG have added United's debt to their valuation even though it has no value because it was incurred through the Glazer's takeover. Surely it should be knocked off the value, or am I missing something?

 

[Fame Monster]

I'm quite aware of how the world works Marvin. I didn't think Silva is reimbursed for his services with photos of Moonbeam.

There's actually an interesting debate over football finances and revenue streams. However you worded the whole thread around being the 'biggest' and 'overtaking' United. You even said this "The only objective way of measuring the size of a football club is through footballing revenue because that is what delivers football on the pitch." Look at Atletico. Look at Leicester.

If you want to talk about the financial side of the game then go ahead, I'll even chip in, like I said above it's interesting, but I hope to god we never become a club that talks about being the biggest and gloating about our commercial revenue or our new sponsorship deals.

And if people crave for us to have the largest revenue then don't complain about ticket price increases.

Great post.

If the OP wants to objectively know who the biggest club is in Manchester at this moment in time, he should look at the league table.