Man United Debt Hits £716million

JohnnyG said:
Not really as UEFA only want clubs to demonstrate that they can balance the books by 2013/14, Chelsea are well on the way to doing that anyway and if the deficit was @£50m for instance RA would write it off.
We're in a far better financial position in the eyes of UEFA and their silly new laws than the like of Man.U. or Liverpool for example :)
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No I think the law they are considering is you can only spend what you make in profit not what Roman pumps in but actual profit.

You won't be able to put in 300million of romans money and say, look we broke even. You will be able to spend what in left in profit from your income, not romans wallet.

I think its a good idea and the days of 100k per week players worldwide would gone while teams tried to actually turn a profit. Obviously it would have to be europe wide.
 
I'm just trying to understand, but I can't.

The Glazers came in and bought up as many shares as they could, and took United from a PLC back to a privately owned company. The money they borrowed to do this, they secured against the club itself. So the club are slowly drowning in a pool of interest charged at 15%.

How in the name of all that is holy is this legal? It's like me borrowing a few million, buying a company with it and securing the loan against the company. If it goes wrong, I just walk away, no problems and the company is left to sink, taking it's employees with it?

Excuse my ignorance of Economics - I just don't get how it's so easy for people like the Glazers to come along and muck companies about?
 
dannyjo22 said:
No I think the law they are considering is you can only spend what you make in profit not what Roman pumps in but actual profit.

You won't be able to put in 300million of romans money and say, look we broke even. You will be able to spend what in left in profit from your income, not romans wallet.

I think its a good idea and the days of 100k per week players worldwide would gone while teams tried to actually turn a profit. Obviously it would have to be europe wide.
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Exactly. Uefa are saying they want clubs to be financially independent and not relying on outside investment like Chelsea and City are doing.
 
Man United's recent success has papered over real deep lying problems with their club, many fans have simply had their heads in the sand.

Most that I know didn't care to listen or simply didn't understand what happened to them when the Glazers took over. The latest irony is this bond scheme which they will issue, and the staggering amount of money it appears they will be able to suck out of the club.

Football is in an ever increasing bubble which is being funded by us - the fans. How long will we continue to accept being shafted is anyone's guess, but when we say enough is enough? The game will be in a wholey mess and you can bet your bottom 'dollar' the Glazers, Gilletts, Hicks, Al Fahim and the dozens of other carpet baggers will be running for the hills with suitcases laden with treasure.


And guess who'll be picking up the pieces?
 
BaZ87 said:
Clubs like Chelsea and Man City should be more worried than Utd (or Liverpool) about any Uefa rulings.
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They aren't, it will affect clubs in debt, abramovich and other billionaires don't invest money they don't have. But often for the sake of other investments it really doesn't matter to them if the clubs sit 500million in debt. When/if it becomes an issue they'll simply wipe the debt out.

City/Chelsea and really rich owners who can wipe the entire "perceived" debt out in the space of one business day aren't even close to in trouble.

Likewise Chelsea are actually doing pretty damn well in terms of reducing the wage bill compared to several years ago(with a far smaller squad in comparison to Mourinho's 10 new players a season years), likewise they've not dipped into the 3 players at 20mil a pop for, well, several years now. Their big year was Anelka and Ivanovic, who were both cheap as chips compared to their quality.


Liverpool and Utd are screwed IF there are fair play "punishments/limits" as they have significant debt and aren't paying it off.

The thing is the laws are rather stupid, Utd/Liverpool are living beyond their means right now, Arsenal went into debt for a new stadium, you can't not do that to get a new stadium in his day and age. However our debt is easily paid off every year including interest with a more than manageable loan thats reducing as expected.

How that would come into it if "fair play" business practices happened I don't know.

In reality how can fair play type rules exist, at the moment aren't quite a lot of Italian clubs steeped in debt, aswell as the likes of Real Madrid. It doesn't seem likely that the anti British brigade in Fifa/Uefa would also hurt the other big teams in the CL just to spite the rich clubs in England, especially as they wouldn't hurt Chelsea and City, who they seem most aggrieved about.

What football needs is a few players to step up and publically take on a hugely different type of wage. IE someone at a top 4 club, and a top player in that club to take a basic wage of say 20k a week, with massive bonus's only payable on success. So 10 assists would be 1million bonus, 20 goals, 1 million, win the league, 1 million, win the cl 1.5million etc, etc.

So if the player is crap, the team sucks, he gets a pretty decent wage but not insane for a club that hasn't made the money. But the club has success, which brings money and they end up with a very fair cut of that money.

It would help reduce wage bills though, enable smaller clubs to afford better players, and protect against teams in trouble.

Really we need wage limits in all european leagues, and probably a transfer limit aswell.
 
As long as the debt is sustainable, which despite being raped for ever $ by their owners, Utd and Liverpool's is then debt is not an issue to Uefa.

The main issue for Uefa is clubs that are spending beyond their means, relying on outside investment.
Improving financial fairness
The major objective of the Financial Fair Play concept is to improve the financial fairness in European competitions, as well as the long-term stability of European club football. In order to achieve this goal, a set of measures will be put in place. These include an obligation for clubs whose turnover is over a certain threshold, over a period of time, to balance their books or break even. Under the concept, clubs cannot repeatedly spend more than their generated revenues. Guidance will be given on salaries and transfer spending, indicators provided on the sustainability of levels of debt, and clubs will be obliged to honour their commitments at all times.
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http://www.uefa.com/uefa/keytopics/kind=64/newsid=886803.html
 
Utd fans (and even the board) as far as I understand it couldnt have stopped Glazers even if they wanted to.

Glazers (or anyone) can go to each share owner and say "how much for your 10% of the club) - and with the Irish Mafia (in this case) being ***** with Fergie / Man Utd at the time due to the race horse situation , they readily agreed.

Once you have enough shares (about 20-30% I think) you just have to be able to raise enough cash to perform a takeover (and announce it to the stock exchange etc etc) whether its friendly or hostile is another matter entirely

Man Utd as a club make nearly £100m a year with match day sales, sponsorship and all the other money making schemes they have (shops / MUTV etc etc ) - admittedly majority of this goes on interest

The club is still meant to be worth nearly £500m more than the debt (£1.2BN) but from the bond release info it also looks like the Glazers plan on taking out Hundreds of Millions of pounds from the club in the next few years and that will of course only make the sitaution worse

To my mind the stock exchange need to change the rules that allow this kind of practice to even go ahead - but the EPL are just as much at fault for allowing a group of people / family to buy something when a franchise they already own was struggling let alone something that is a globally known sports club / brand
 
BaZ87 said:
As long as the debt is sustainable, which despite being raped for ever $ by their owners, Utd and Liverpool's is then debt is not an issue to Uefa.

The main issue for Uefa is clubs that are spending beyond their means, relying on outside investment.

http://www.uefa.com/uefa/keytopics/kind=64/newsid=886803.html
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The problem is of course that, Utd and Liverpool have required investment to buy players, and Liverpool have a awful squad in terms of back up quality, to compete properly you'd need another 6-7 decent players just as backup, add up those wages, and the transfer fee's and Liverpool will be living beyond their means in an enviroment where they could compete for the league. If they continue as is, they might have managed debt, but doesn't seem to be reducing. What happens when you add a new stadium in at several hundred mil, the debt and interest then would have to be less than the extra you can make from more tickets sold. Arsenal went into debt from a clean sheet, if we'd already had a 300million debt and 30mil interest payments we wouldn't be in nearly the same position financially.

You're also forgetting some very basic easy things, Chelsea/CIty can simply manufacture revenue, they just don't need to right now.

If this became a problem for Chelsea/City they could VERY easily have any of a dozen different companies "sponsor" then, stadium rename, name on a shoe, billboard somewhere whatever. They can simply turn the expected yearly loss into a sponsorship deal for that year, thereby artificially increasing revenue. They have the money to do so, Utd and Liverpool don't.

CIty and Chelsea are in zero trouble facing the new rules, plus, considering as I said the Real Madrid and multiple spanish/italian clubs situations, it will simply be a face saving "football doesn't involve a disgusting amount of money while you're all in recession" PR campaign with loophole after loophole for clubs to bypass it.
 
drunkenmaster said:
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Both Utd and Liverpool football clubs recorded profits. Neither borrowed/needed investment to buy players and they've not bought beyond their means.

The holding company's of both clubs have lost money in recent years due to the debt their owners have saddled the club with.

Again, the talk from Uefa will seemingly not threaten Liverpool or Utd, however if Chelsea and City continue to post losses then it might be a threat to them.
 
Utd recorded a profit of less than 80million, after selling an 80million pound player, please explain to me how thats sustainable........... without selling a new 80million pound player every year exactly?

How would Liverpools debts have done without selling Alonso for 30mil, assuming they don't sell Torres or Gerrard, wheres the money going to come from for new players, without outside investment which is whats funded most of the buys for the past several years, as they have for Utd also.

Likewise, as I said, smack a new stadium at 300-400million extra debts on the books, and I wonder if Liverpool can really have a "sustainable" debt with limited profits and debts increased to circa 600mil?

Holding companies WILL MOST CERTAINLY BE INCLUDED. Its a thin disguise for club debt, parent companies are created to hide debt from the actual club, this isn't a secret, well hidden or a fool proof plan.

As I said, City/Chelsea can afford to make their shirt sponsors Big Ruski Oil company, with a sponsorship of £100million a year, and City can have Big Arab Oil company on their shirts, at £200million a year in sponsorship, then every year their books and their holding companies will show a huge profit every year.

They hold debt right now this second, because its convienient, City/Chelsea owners can wipe it out if needs be without batting an eyelid. When new rules which will most certainly include holding companies(because otherwise, obviously every club in the world will simply make themselves a holding company, and then a holding company for holding company), which leaves Utd and Liverpool lacking profits and with impressively large debt without the profits to offset it.

Seriously, take away the Ronaldo sale and Utd's debt is not sustainable and they wouldn't have made a profit. Lets be generous and say some idiots buy Rooney for 70mil, they last another year as "profitable", who are they going to sell the year after?
 
drunkenmaster said:
As I said, City/Chelsea can afford to make their shirt sponsors Big Ruski Oil company, with a sponsorship of £100million a year, and City can have Big Arab Oil company on their shirts, at £200million a year in sponsorship, then every year their books and their holding companies will show a huge profit every year.
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That's a retarded plan. They might be rich, but they're still not going to deprive themselves of one of their key sources of income by becoming their own shirt sponsor.

What next? Roman charging himself £1b for his own season ticket?

I remember why I despair of your posts now.
 
The club is safe. They might not be able to spend as much as they would like but other than that it's fine. If the glazers can't make it viable then they can put it back on the market and let the fans/investors buy it- which was probably the ~10 year plan anyway.
 
Weebull said:
That's a retarded plan. They might be rich, but they're still not going to deprive themselves of one of their key sources of income by becoming their own shirt sponsor.

What next? Roman charging himself £1b for his own season ticket?

I remember why I despair of your posts now.
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theres a reason DM still posts on OCUK and isnt a billionaire evil genius :p
 
drunkenmaster said:
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Firstly, I was responding to your point that both Liverpool and Utd needed investment to buy players. That's total BS. Both Liverpool and Utd have funded their own player purchases as well as servicing their owners debts.

Regarding the sustainability of each clubs debts. As long as both clubs can afford to make the required payments and have a positive cash-flow then there's no problem. Utd is slightly more complicated because of the PIK notes, however they're not technically Utd's debt (nor is a % of 'liverpools debt') so that cant' be held against them.

And I don't see how debt of holding company's can be taken into account either, as like I mentioned above, the debts of the holding club aren't always secured against the club.

The entire point of the 'Financial Fair Play' stuff is to stop clubs buying success with big-backers. This isn't the case with Liverpool or Utd and certainly was with Chelsea and now with City.
 
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