I think you missed his point. If UEFA are going to crack down on clubs making massive losses then clubs with 'sugar-daddies' will just find a creative solution.
Man United Debt Hits £716million
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I think you missed his point. If UEFA are going to crack down on clubs making massive losses then clubs with 'sugar-daddies' will just find a creative solution.
Chelsea and Liverpool have a slightly different problem and its in regards to their stadium
Chelsea have to find a location near enough that can hold 80,000 + (Im sure they can find sponsorship once they find a suitable location) - Liverpool need to sort out the sponsorship for their planned stadium (sorry if people dont think this is on topic but given that the proposed cost of building on Stanley Park is £300m or something, and Im sure anywhere Chelsea find it would far exceed even that - I would say those figures would make it on topic lol)
Thats both teams biggest weakness ( well apart from one set of owners being arguementative *****)
Somehow (admittedly its a pipedream) the EPL should make it impossible for owners to take out vast amounts of money the owners have never put into the club ( if they are selling % of the shares then fair enough, but asset stripping the club like the Glazers seem to want to do by selling Carrington and OT with lease back plans should be made "illegal" by the EPL)
Chelsea have to find a location near enough that can hold 80,000 + (Im sure they can find sponsorship once they find a suitable location) - Liverpool need to sort out the sponsorship for their planned stadium (sorry if people dont think this is on topic but given that the proposed cost of building on Stanley Park is £300m or something, and Im sure anywhere Chelsea find it would far exceed even that - I would say those figures would make it on topic lol)
Thats both teams biggest weakness ( well apart from one set of owners being arguementative *****)
Somehow (admittedly its a pipedream) the EPL should make it impossible for owners to take out vast amounts of money the owners have never put into the club ( if they are selling % of the shares then fair enough, but asset stripping the club like the Glazers seem to want to do by selling Carrington and OT with lease back plans should be made "illegal" by the EPL)
What do you think the fans reaction to that will be (when it happens)?
I wonder what kind of value can be put on it - shirt sponsorship level even more?
Reasonable short term solution - but I cant see it making a huge amount of difference (when you consider .....35,000 less seats sold per match...£1m/game at least unless my maths is wrong lol)
Yeah thats a good point, whats to stop chelsea holding an auction to generate money and roman buying a load of gear for £200 million to generate income, to give them money to spend.
It's going to be tough to regulate properly and fairly but they have to start somewhere.
Caporegime
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Ok, seriously how on earth can you claim Utd, who would have made a clear loss without Ronaldo's sale, is a serviceable debt I don't know.
As for not taking holding companies debts into account, do you know how entirely little effort it takes to shift debt from a football club to a holding or parent company, non at all. If it didn't take into account any and all debt of such companies as I said every single last football club in the world would simply create such a company, transfer the debt and continue exactly as before.
Again I'll point out Chelsea and City can afford to artificially raise the revenue, income and apparent profit any time they want with any number of ways, they don't now because there is no such need, if there was, they would. Neither club are in any trouble.
Hell they could simply half every players wages, and pay them all the other half under personal sponsorship deals through a 3rd party, which would drastically cut their outgoing money, which these days is largely wages for any club, and again maintain profitability easily.
Utd and Liverpool don't have these options, Liverpool with a new stadium would most certainly not be in a great position to invest in new players and pay off the debt at the same time.
I was more talking about if they wanted to be competitive, they would need to spend more, and in doing so, would need outside investment.
Likewise when you look at Utd's profit, vs their spending, the year they spent a heck of a lot more than they did this year, Anderson, Nani, Hargreaves and a few others they spent more than they made in profits.
Again I'll point out, if they would have made a loss without selling Ronaldo, and barely bought, assuming they don't sell a 80million pound player, and want to buy anyone, it won't be out of profits, so how exactly do they not require outside investment to fund players, because it doesn't suit you?
Whats even more laughable is because this is from a fan of a team who the majority of fans constantly complain about the owners not spending their own money on the team for improvements, who most fans want them to sell to some oil baron who'll actually invest in the side.
The biggest problem in football isn't the Chelsea's and the City's who have financially safe clubs, its the now Utd/Liverpool type situations where purely businessmen load debt onto a club to buy it, and really have smeg all intention of paying it off and simply want to leverage the club into a sale to make more money. Thats the FAR more dangerous situation in terms of football club ownership, not least because a few bad years could be very very bad for a debt laden club, where a few bad years making a little less money, or losing a little more wouldn't really hurt City or Chelsea at all, but could be the cause of complete collapse of the other two.
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I'm sure any fans who may have a problem with it will get over it soon enough, at least they're staying at SB.
Our Samsung & Adidas deals get us about £20m per year so I doubt it'd be that much, maybe half.
It's money for old rope though, no outlay or extra investment required, just collect the cash.
About £44m although the club is now debt free thanks to RA.
Providing Utd have a positive cash-flow and are making the required payments then they're fine. If Utd have enough cash reserves to make up the excess loss then it's not an issue, it's the same for how they may have managed to sign Anderson, Nani etc (if they even spent more than they made).
You also need to realise that debt on holding clubs isn't simply debt of football clubs being hidded. ~£200m of Utd's debt (and the only part that's a threat to them), isn't actually Utd's debt nor were the Glazers able to use the club as security for it either. The reality is that Utd will ultimately be responsible for paying it off but technically it's not theirs nor are they responsible for it so I don't see how Uefa could do anything about it.
As for Utd and Liverpool needing outside investment to be competitive; who were 1st and 2nd in the league last season?
Whether Chelsea or City will, or will be allowed to artificially increase their revenue remains to be seen but as it stands Chelsea and City are the only 2 clubs that Uefa possible ruling will apply to.
Very trueRussian Oil Corporations ' SB doesnt sound quite the same though
I think we can all agree there will be ways round any issue of money being in the wrong account to satisfy Uefa , even if its some kind of creative accounting, its unlikely Uefa will be able to do anything
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Are Real Madrid also in the same boat? Spend as much as they want and the King of Spain just comes along and pays way over the top for something to balance the books.
It's because (most of the time) Barry knows his shizzle
Regarding the UEFA card that some people are quick to throw in, does anyone seriously expect them to do anything ? Lets take Utd & Liverpool as examples and let's assume that their finances get worse rather than better. Is it in the interest of UEFA to dismiss them from the Champions League or Europa League ? Absolutely not. I am sure that the recent run of Liverpool Chelsea Qtr's and Semis over recent years and last years Arsenal Utd Semi final made UEFA a HUGE amount of coin
So if they were excluded along with Real Madrid, Juventus, AC Milan etc, what are you going to replace the glamour ties with ? Rosenborg vs Dynamo Kiev, Aston Villa vs Olympiakos ?? It simply won't happen.
Also on the issue of United, I kind of go against the grain from most United fans. When the take over by News International was on the cards, then that was the opportunity for the fans to galvenise and buy every last share they could do be it from private or institutional investors yet they let they yanks ride in and pull the club from under us. They allowed the Glazers to borrow against the value of the club that the players, community and the fans had helped build over a number of years and turn it into debt. No different than the Liverpool scenario. The wheels' were already in motion before the fans did anything.
United fans often get ribbed for who they are, where they are from and the amount of prawns they eat in their freshly baked bread. The only fan's I feel sorry for are the normal working class families who have, do and will follow the club through thick and thin, hell or high water. Despite what many peoples perception are of United fan's are there are still many many people from within the city who follow them and hold Manchester United Football Club dearly yet they could not afford to buy any shares.
Its called a leveraged buyout.
http://en.wikipedia.org/wiki/Leveraged_buyout
Remember that the Glazers bought Man Utd for a lot of money (including their money) and so have a lot to lose. Its not a case of simply walking away.
As far as business is concerned, these things are common. The real problem is that, as football fans we simply do not accept that football clubs should go bust as frequently as actual businesses. Or even if we don't have that extreme, cutting costs is difficult since in sport there's a large difference in monetary terms between a few positions in the league.
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I don't think you quite understand what has and is going on.
The Glazers borrowed a lot of money in the form of PIK notes (high interest rate but you don't actually have to pay the interest until the loan matures (it just rolls up ontop)) when they bought Utd, presumably as it was the quickest/easiest/cheapest way of borrowing the money in the short-term. In 2006 they managed to refinance some of that debt into a normal bank loans and shift it onto the club, however around £140m of the PIK notes (@ 14.25% rising to 16.25% this year iinm) remained and these are personal debts of the Glazers.
Under the terms of the bank loans Utd have (the ~£500m which is secured against the club), the Glazers can't pay-off the PIK notes until the ~£500m has been repaid. This was a huge problem to the Glazers as the size of the PIK notes could have got out of control (~£200m now and will rise another ~£30m over the next year).
The bond issue is effectively replacing the bank loans, albeit at a slightly higher interest rate (about £4m per year) but cruicially for the Glazers they'll now have the freedom to take money out of the club to pay off their PIK notes.
The reason why it hasn't happened sooner is because the bond market has only just recovered enough to make it financially viable, investors would have demanded a far higher interest rate previously.
In short; this is bad news for Utd as they'll be paying slightly more in interest and more importantly, the Glazers will be able to leech even more money from the club for their personal gain.
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From financial analysis of the bonds the Glazers are able to take out over £300m from the club over the life of the bonds with I think around £100m being available in 2010 alone
The bonds also allow Carrington and OT to be sold - where before hand this wasnt allowed to be done ( under the terms of the original loans)
It seems like it was reasonably easy to raise the £504m, Im surprised they didnt try and raise £700m or something to also pay off the PIK notes (after all Utd will end up paying them off sometime anyway, so surely better sooner with less interest paid?)
The bonds also allow Carrington and OT to be sold - where before hand this wasnt allowed to be done ( under the terms of the original loans)
It seems like it was reasonably easy to raise the £504m, Im surprised they didnt try and raise £700m or something to also pay off the PIK notes (after all Utd will end up paying them off sometime anyway, so surely better sooner with less interest paid?)
the 300mill will be used to pay off the PIK Frank. That's why financially the bond makes us more stable, the downside is that if the bonds hadn't been fully subscribed we'd have been in a more unstable position potentially forcing the Glazers to sell sooner.