Manchester United have made a record breaking £100+million profit this year, the first English club to do so.
Imagine what our great club could be doing if we didn’t then have to consider an £83.6million loss which we’ve been bundled with thanks to the ownership of the Glazers.
A few months ago Forbes magazine named United the most valuable sports franchise in the whole world, at £1.2 billion. The rest of the top 10 was, in order, Dallas Cowboys (£1 billion) then The New York Yankees, Washington Redskins, New England Patriots, Real Madrid, New York Giants, Arsenal, New York Jets and Houston Texans.
The mind boggles over what we could be achieving if not hampered by the restraints of the Glazers. I’m not just talking in terms of bringing in the best players from around the world, but how we could fund our youth development, the stadium, the training ground, and, very possibly, not rise the price of tickets practically every year.
We should be rich beyond our wildest dreams. But we’re not.
Anders Red has given a good summary:
1. Operating performance very good on cost side. Non-salary costs down by 15% despite only 7% fewer home games. Wage costs up 7%.
2. 8% fall in matchday income despite 3% ticket rise reflects weak corporate hospitality.
3. Media income up by 5.1%, from from £99.7m to £104.8m, which isn’t great in view of the new Champions League deal.
4. Reported profit before tax includes non-cash goodwill amortisation of £35.4m, one off finance costs of £40.7m. Clean number around £22m profit.
5. Commercial revenues increased 16.5% from £69.9m to £81.4m
6. The ability of the club to get non-staff costs down 15% is very impressive. Well run club with bad balance sheet.
——–
RoM gives a detailed explanation of what this all means
Full details on ManUtd.com
United Rant’s take on the figures
Man Utd News 24/7
An absolute disgrace
We could have signed any player in the world with those operating profits
The tragedy is, that after 5 years, the debt is now higher than when the Glazers took over!!!
Why arent these dirty dogs paying off our debt. WHy dont they put their hands in their pockets. SCUM
Bastards…sickening feeling of hopelessness….its a long, long battle ahead against these leeches
WELCOME TO HELL ! COME THE REVOLOUTION IM AT THE FRONT OF THE QUEUE
and why don’t they EVER address the fans?!
oh yea, ‘cos they couldn’t give two flying fucks about us.
so
the
result
is
£100-£83.6 = £16.4
or
£100 – £183.6 = -£83.6
?
Yes, put the club in debt more and more and rise the profit saving on everything, raise ticket prises etc.
As well as manufacturing poor quality merchandise.
What is most insulting is that these vermin, and I include Gill in that, do not even have the nads to come out and make a statement to the fans.
Before the Glazer’ took over, they constantly spouted reassurances as to how this could only be a good thing for the club, and we were bombarded with well-spun soundbites.
Now, when it’s blindingly obvious that things aren’t going to plan, they just go completey silent. There are things we DESERVE to know.
What are the owners’ opinions on these losses and the debt?
What are the MD’s opinions on these losses and the debt?
What is the Glazers’ long-term business strategy with regards to the club?
ARE transfer funds available as and when Sir Alex needs them?
WE JUST WANT FUCKING ANSWERS.
I admit that I am still a tad confused about what the loss this year was, but I totally agree with the general point that Scott, sayyid, MG and a few other make. We are so profitable in times of recession and it really is for nothing. The club won’t gety stronger from this and God knows where the debt is right now. And while I will agree that the Glazers’ plan brought the operating profit to a record 100 million, I would take 50 million if it meant no losses…
As for why they never talk, don’t you know? Their feelings were hurt by the Green and Gold campaign…
Costas
If they were hurt by the Green and Gold campaign:
Just do something about it!
There is a beautiful line in Gladiator where Russell Crowes character Maximus is told by Oliver Reeds character Proximo the following:
“Win the crowd and you will win your freedom.”
The Glazer’s should heed this and learn accordingly – at the end if they don’t show what they are about they deserve everything they get – and ultimately again as I have mentioned I have no problem now with money being taken out of United As long as it is going back into the club and paying off the debt.
When it isn’t and we are left to contend with all sorts of figures reasons excuses etc – everything is as mentioned lost in translation and no one is the better for it.
I am yet to get access to the entire detailed figures to be able to make an informed comment. It will be interesting to see the extent of non-cash items of expenditure, as well as the one-off losses and expenses brought upon solely in relation to the debt, for instance the inevitable hedging losses on derivatives…as well as the taxability of these items of expenditure.
I wont bore you guys with excessive terminology but yes, the figure of 83.6 mn loss does seem very depressing off the cuff…but as I said, it is better to wait for the full facts to make an informed judgement rather than join in with the herd mentality and ranting and raving
Or is it because they have agreements in place with the banks that for so many years the banks/hedge funds will receive interest until further notice?
Here’s what I don’t understand.
The Glazers are worth somewhere in the region of $2.2bn
The parent company which owns Utd is around £750m in debt.
The interest on this debt is astronomical.
Why don’t they just pay it off instead of letting it sit there, gathering interest?
Surely better that they reduce their fortune to ‘ONLY’ $1bn, rather than let the interest spiral out of control?!
Bloody hell, I wish I could make sense of all this.
@Costas
The loss is the loss the Holding company is setup to make. Its all the accounting non-cash deductions that are used to keep the cash in the club rather than have to pay it to the tax man.
Atleast till around 2017 the holding company is pretty much unable to make a profit but thats what the Glazers want as it actually generates the club MORE money than if a profit was posted by the holding company and tax then had to be paid
The statement on our web site doesn’t say much
There you go information controlled by the state – only what they want you to see and read
Typical – they really need some PR between themselves and us – obviously they haven’t figured that out
I mean being billionaires and being reclusive at the same time?
God help us all – no one play that euro millions tonight just in case you win – wouldn’t want to go down the reclusive way at all…
: )
Let the arguments begin. All I want to know now, what does the overall debt stand at now?
o man… let the confusion reign!
Thanks Wakey
So they don’t want to play tax – jammy bastards : )
@MG
Its not G&G thats hurt them. Its MUST’s actions from the start. I have said it more than once but as soon as the takeover happened MUST’s duty to us the fans was for them to back off a bit with the negative campaiging and try and work with the Glazers. As it was they actually INCREASED their negative campaigning against them and spun everything they said. Its basically pointless them saying anything because as we keep seeing with Gill and SAF when they say anything MUST spin it to help increase anti-glazer feeling.
And this is why there is “No Value”.
We all should boycott the next home game, imagine the sight of an empty OT?
That would get the message across loud and clear!
They took £183.6m out of the coffers!! :@
Eleven.
The debt:
It’s gone up
No wait
It’s gone down
No wait
It’s stayed the same
No wait
I think I know
No wait I don’t know
Bored already : )
Cant take this shit no more, our team is in serious decline profits made are used to repay loans, The american shit heads are rape’n the club, gill will spin their lies cause the creep has no soul nd would piss on the fans to appease his paymasters. Ferguson will keep his mouth shut nd happily see out his couple of years he’s thinking why should i risk my last few years of employment i’ll be remembered as the greatest coach of all time…. My fuck you will,,, i’ll remember you as the coach who said there’s no value in the market (more fucking glazers lies) you know theres no cash but you’ll lie for those bastards
People need to wind their necks in and wait for the full facts!! Also, my ps3 is naggered, my mood is like the Titanic, extremely low. Have to put some John Denver on later, see if that improves mood.
in 9 months we have to get money to replace at least 2 of van der sar paul scholes ryan giggs gary neville – and we still dont know if we are still awaiting hargreaves – if he’s playing in the carling cup or weither he’s not 100%.
Wakey
Being a little bit older and trying to seriously get hold of this situation I would have to agree with that – if MUST had been close to them maybe they might have got wind from them as to what they wanted
And that also means that it didn’t have to stop them disagreeing with them on the club’s financial situation.
At this moment there is no revenue for us fans to be told what is going on apart from SAF who’s job it is not to be the accountant but the manager which is the end of that.
We carry on full stop. That’s what United have always done carry on and save everyone in the process
@wakey
Inaccurate once again……If there is a profit on the books of the club, then the club has to pay tax on it. Tax is usually calculated entity-wise by lifting the corporate veil precisely so that the taxman cannot be ripped off.
Just to give a small example, if Corus’s (Tata Steel had taken it over in a leveraged buyout in 2007) Netherland’s entity makes a profit, but the UK entity makes a loss, you still have to pay tax on the Netherlands companies profits…..because they are incorporated as separate entities…..
Just because you have a loss on the UK (holding company) books, it doesn’t mean that we are not paying tax on the Netherland’s entities profits…The losses on the holding company’s books can be carried forward for set-off in future years, but it doesn’t provide tax benefits as you seem to be making out.
@kanchelskis
How much are you worth?
Do you actually have access to the cash to buy an item thats 25% of your worth? Highly unlikely.
People generally don’t have their worth in liquid form, its all tied in assets. Releasing equity from assets isn’t as easy as you may think and its not even always the smartest thing.
Also with some of the debts (The PIKs) American tax laws actually make it better to roll up the interest rather than pay it off. Its why despite them having bought 40mill of the PIK debt from the hedge fund for just 12mill in 2008 its still ‘active’ because from a tax pov it makes more sense not to write it off
jon0077
Seriously fella give it a break – putting the Glazer’s to cue is one thing taking the piss out of Sir Alex is out of order
Okay that’s it I’m already on a box full of paracetamol headaches so since that would be an overdose I’ll get it down to 2 and be done with it.
I’ve exhausted my brains out on this
Time out for me now
The Glazers fortune will never spiral out of control Because it is ring fenced. Like Hicks over at the Dippers, the gimps don’t give a flying fuck about you or your club. Why would they want to pay off the debt — when they can just give it to us?
It looks like the Dippers will be rid of their leeches soon and able to start rebuilding. We still have all the pain and humiliation to come.
No new players are coming in — it’s all pretence to keep up the ticket sales — smoke and mirrors.
We’ll be losing to Blackpool next. The out of the top 4. Get used to it.
Don’t you realize? — the Glazers have to go. That’s not ‘negative’ campaigning.
jon0077 – Wind it in mate, do you really think that SAF will just walk away and not give a fcuk what happens to United?
@Red Devil
No you are wrong. Even Andy Green and the BBC (As well as most of the other media outlets) have conceded that the loss is a tax saving method that protects the cash in the club. The BBC using Andy Greens figures suggested in their Anti Glazer doc that the structure had seen united pay NO TAX since the takeover saving the club over 80million
I taught it could of been alot worse – take chist for the 100million profit
thank glazers for losing 184.4million in a year
@Wakey
You have not read my post correctly….
If the loss is on the books of manchester united, it will definitely help us save on tax….and if you see there are actual losses on the books of the club plc which is why the club plc has saved on taxes….but the losses on the books of the holding company will have no impact on the ability of the subsidiary to save taxes….which is what i had clarified in my post….
So your blanket statement to Costas that all losses made by holding company is meant to save taxes is wrong
http://www.sportingintelligence.com/2010/10/08/manchester-united-accounts-turn-record-100-8m-operating-profit-into-loss-of-83-6m-081009/
The link above will help us all make more sense of it. It is fairly standard business practice. (Which, of course, doesn’t mean its ethical, moral or desirable.)
We’ll soon know if there’s any cash fro players — we need a new golakeeper.
we should have spent the ronaldo money.
Sneijder said he wanted to join. Fucking sign him then.
Glazers will sell eventually and we’ll be more than fine
liverpool could be deducted 9 points
http://www.caughtoffside.com/2010/10/08/liverpool-face-nine-point-deduction-for-entering-administration/
@Red Devil
You are wrong. No-one would use holding companies if your theory was right as they see themselves taxed on the same profits twice. Do you seriously think that last year the club paid tax on their 90mill profits and the holding company paid tax on the 40mill profits. The profit after all for the holding company was exclusively from the club.
If you think that you are having a laugh. The structure sees only the holding company pay tax as the club is an asset of the holding company so is included in their accounts
Bruce Thomas – Liverpoo lost to Blackpool hmm, we lost to Leeds last season and Burnley.
well… … at least there is a variety of views on here
The Fly – “Fucking sign him then” Yeah its as easy as that innit? Just because he said he was unhappy (did he) doesn’t make it set in stone that he would join United. Turns out he was just pimping for a bigger contract at Inter as I see he is about to pen a new deal. Don’t believe the hype around these dutch lads. Van der Vaart said he would ONLY play for United in England. Yeah right!
I’ve just seen the P&L and Bal Sheet accounts our overall debt has gone up thats after United have paid £106million in just interest alone. It’s a fucking disgrace, makes me so mad. There is no way United can sustain these losses and will be a matter time before the stadium and the training ground are sold to honour its debts.
@Wakey
You must be having a laugh mate….you keep mis-interpreting my statements because of your lack of technical financial and legal knowledge…..
Obviously no income can be taxed twice, it would go aganst the very fundamental tenets of taxation..
But if you think that you can create a holding company just to escape paying taxes through fictitious means, then you’re having a laugh…All companies around the world would then be fools to pay any tax at all.
Just create a holding company, buy the subsidiary at ridiculous prices to create goodwill in the books and then amortize the goodwill to show accounting losses in the holding company books and pay no tax forever…..sounds easy doesn’t it? Why dont you try it?
There is a difference between accounting treatment of certain items and expenses and their treatment in taxation. It is just not possible to explain these technical details here in a few posts because you need to spend years and years in education and gathering expertise…
Will continue this discussion when I have more time…am busy at work for now….
Cheers!
jon007 – You may choose to remember Fergie that way. I will remember him as the manager that made United the top team around and brought success back. I do not subscribe to this Fergie is a puppet shite. Why would he lie? Why would he do a half arsed job knowing he can’t produce the goods? Why at nearkly 70 would he fucking bother? No I have said all along he would walk.
Gorse Hill Red – Come on mate, it won’t get to that stage. The Glazers will want to sell United at the best price possible, they might be cunts, but there not stupid.
bruce thomas @ 12:40: “Why would they want to pay off the debt — when they can just give it to us?”
I’m commenting on this post because it seems to summarize the negativity of them all.
Unless you – or I (or anyone else) – is a tax attorney or chartered accountant with privileged access to the Glazers’ books, we really have no idea about how they are twirling their assets in their high-stakes’ juggling game. In this world of ours, there are lies, damn lies, and statistics. Then, there’s tax laws and high finance.
The Glazers aren’t going to sell UTD “to us” because “we” don’t have the money to purchase such a hugely-expensive enterprise (and, be realistic, UTD is a multi-dimensional enterprise of which only one part is the team of eleven mercenaries who walk out the tunnel at match-time). Indeed, why woudl they sell it at all – they purchased the club for around 750 million pounds and it’s now “worth” about double that amount. UTD is a cash-cow.
More to the point, when they floated a 504 million pound bond last year it was fully-subscribed in about six hours. Do you seriously think that these professional investors were worried that the Glazers would sell to “us” ? And, most significantly, what part of three consecutive EPL championships, a CL championship, a CL finalist, and last year’s unlucky CL quarter finalist, as well as defending Carling Cup championship suggests that the on-field product is declining ?
I just don’t understand the doom-merchants who can only look at the dark side of the moon. Sure, it would be better if the club was owned by “us” but “we” don’t have the money to buy it – do “we” ? In these circumstances, I don’t see how “we” can complain about the Glazers’ stewardship. The off-field financial risks/rewards are their business, “we” get to celebrate the on-field glory. Isn’t that enough ?
willierednut, maybe but I honestly wont put it past the greedy bastards. If there is a buck to be made by it they will do it, they own the club after all. Like I said United will not be able to sustain these losses and eventually it will catch up. By the way the Glazers gave themselves a hefty £10million dividends for their troubles.
Well let’s immediately discount the media doom and gloom, because whether it is accurate or not is impossible to tell. They are ABU about what happens on the pitch, and ABU off it. It would please journalists no end to predict our doom. So when they say we’re doomed, I ignore it.
However we’ve got the numbers to look at, and I’ve read the comments here, and I’ve read the articles, and I’m still a bit baffled.
This loss that is being talked about, this eighty million quid, that’s a net loss right? Does that mean our debt effectively went up £80m this year?
I’m concerned mostly that by trying to force Glaser out we could end up with the same situation as Liverpool, collapsing the club just to get owned by some other twat. If United could overcome the debt (though that seems all but impossible right now) then we’d be doing okay in the longer term.
In spite of all the above, the one good news to be found is that no PIK-related money was taken out of the club. It seems the Glazers have found a way to actually pay them off themselves without draining the club. Maybe Gill was speaking the truth just a little bit…
@Anyone in the know – Where does this loss leave us with regards to the new UEFA rules that clubs can only lose 39 million quid a year for the next few years? Is that figure calculated before interest payments are factored in or after??
The way I can understand all this –
in theory, we are rich like 20 millions in the pocket after having one scoop of Ribery ice cream and topping with Benzema Syrup. but in reality our loss is equal to value of Newcastle United !
Laugh or Cry..? Don’t have a clue!!
Please if there’s Mr PH.d, convince me that everything will be just fine in football language. Thanks!
So when you take into account the exceptional / one off charges for the year of £67m, the picture is looking a lot healthier and will help cement our place as the planet’s most valuable sporting franchise. A 10% rise in operating profits, during the current climate is quite frankly, enviable. So a big well done to all involved for that.
I’m very impressed with the way we are responsibly driving down costs whilst improving our media related income and commercial development activities.
For me, and I expect I’m in the minority so far as Scott’s blog readership is concerned, the question isn’t imagine how much better things could have been without being hamstrung by the Glazers, it’s actually one of how much worse off we could have been without their management and obvious expertise in running a sporting business.
@ denton davey
Agreed — which is why I sent a second post with a link to an article on sporting intelligence which gives the most reasonable explanation of the situation I’ve read so far.
Paul H
are you winding me up “I’m very impressed with the way we are responsibly driving down costs whilst improving our media related income and commercial development activities.”
the people you are impressed with that are keeping our head in shite are softening the weight stepping on the back of our heads
Dear STR:
What is the tax rate in England for profits? (e.g., how much would Utd have to pay the queen on each pound of profit they post? 30 or 40%?). The question is, do you think they are posting a loss for tax purposes? If so, it is an excellent business decision, because it actually keeps the money in the club. If you look at the balance sheet, a lot of the paper loss relates to a goodwill write off. That has nothing to do with how much money Utd actually has in hand to spend.
The main point is that the press do not have the analytical skills to discuss the impact of the business decision. In additon, doing so would not sell newspapers, would it?
Paul H, your not seriously telling me your happy with the situation? Even with the exceptional interest payment United are still making a loss. How long can that go on for? And what about the actual debt itself? That has gone UP from last year! Come on wake up!
fuck here we go again 99.9% of us including me have no idea,the glaziers didn’t become billionaries and make the worlds richest list by being mugs and i’ll go back to my old point i believe and trust in sir alex he considers them good owners and utd do have money to spend thats good enough for me the day he turns against them so will i,like everyone else it would be good to see a white knight buy utd just isn’t many who can do that @jon0077 your just a fucking imbecile and a cunt slagging sir alex like that
Well said, Paul H. The are fantastic results, especially when you consider the state of the global economy. The Glazers are clearly right to be unconcerned about the debt ratio and their commercial expertise is brilliantly evidenced.
That said, those with an alternative agenda will use out of context and misunderstood numbers to some how show the club is being mismanaged and the fans raped and piliged.
Better baragade up the mega store for a few weeeks
@ghtt, nope I’m not. I’m genuinely encouraged by the direction in which we’re headed.
Sky news has the overall debt at 521 million, is this right?
Oh and BTW … anyone mention that our turnover is more than double the 125m that City have just been creaming themselves over?
The bluenoses will be loving it that all the ABU media and other self interested groups wiil somehow be turning our success story into failure.
@willierednut … yes debt is 521m ….less than half Forbes valuation of the club virtually all of which is flexiably structured within bonds.
@dave mack if the correct valuation is 1.83 bill,521 is less than a 1/3rd
@wayne ..I’d missed your 13:56 post.
I totally agree… LU – IFIT (Love United – In Fergie I Trust!!)
@jon0077 – Your a disgrace. Fuck off to FC United for us would you.
Makes me frikkin’ mad…bloodsuckers!
@Wayne .. I think Forbes valuation was 1.8m dollars and that debt fiqure is in pounds. Either way if the business end of the club continues to be run as well as it has been a debt ration of less than 50% is very manageable.
BTW, I’m not saying we as ordinary fans can be expected to fully understand the very complex financing involved with our club but thankfully we have Fergie in there and like you my respect for him is such that if he’s happy with the owners …I’m happy!
LU -IFIT
willierednut
just asked that question to someone whod know and they replied ” United still owe well over £700 Million – that other £200 is a seperate debt. Club is only paying interest on debts now. ”
sorry for the depressing answer
@GHTT
Don’t see where he is winding you up mate. They are impressive business methods. How take the most profitable franchise in the world and have it report losses.
It’s not the Glazers’ fault they can’t sell a Ronaldo every year…
“Club is only paying interest on debts now”.
That for me is the worrying thing. And unless I am mistaken, the debt has to be payed up at some point. We haven’t managed to reduce it in 5 years…
http://www.newsnow.co.uk/A/450034560?-11193
David Gills take on the debt.
Costas
Its the glazers fault we have to sell a ronaldo every year
We’ve got 165 million in the bank, pity there’s no value in the market.
I’m no Glazer fan but why do people insist we had to sell ronaldo? the guy clearly wanted to go and they got a good price for him – should be no issue with that deal whatsoever.
why the cash is not being spent, that is a different matter altogether…
if gill’s telling the truth thats alot of money for sir alex to spend
@GHTT
Touche.
@bruce thomas
Thanks for the article. I was looking for a detailed report on the finances.
Don’t know whether Sir Alex can spend that money and to what degree, but flaunting it like that makes every Aston Villa ask 30 million for Milner and every Toure ask for 200k per week. And when you reach that point, of course there’s no value.
@costas spot on if we do have the money no need to brag about it, if your not man utd a player costs 20 mill if you are man utd the player costs 30 mill and i think thats the problem sir alex runs into
There are CEOs, COOs, and CFOs. There are lawyers and there are doctors. There are computer technicians, and there are car repairmen. There are electricians, and there are plumbers.
In summary, they all have an expertise. I’m no accountant, and I’m no expert when it comes to business.
Here where I live (SG), corporate taxes stand at 20%. That is why my dad always told me, when the company’s making a profit, spend it, because the government’s actually “paying” 20% of the bonuses you dish out, or the assets you purchase.
Not sure what UK’s tax level stands at… but I’m sure that’s all taken into consideration. Seeing their non-involvement in the club’s daily running, I can only guess that their focus is in the financial aspects of things, thinking how to best make sure the profits are not “wasted”.
Seriously, I’m sure they would be more interested in eradicating the debt if it meant that they’d have more ground to actually take bigger amounts of “consultant’s fees” or whatever they want to call it.
I have in mind the phrase that United is too big to go down, but then I recalled the same was believed of Lehmanns. And AIG.
Let’s all start hoping Warren Buffett decides to take an interest in the club.
I personally think SAF will see very little of that money. Saying that, the Glazers will have to produce the cash from somewhere, to replace Giggs, Scholes and big Edwin.
just out of curiosity… if this season we fail to challenge for the league and exit the Champions League at quarter final stage, will you guys be happy that the money is in the bank and we didn’t strengthen the squad significantly?
guess we will see come the end of the season
@wayne
In writing that, I did wonder how secretive we can be in today’s market. You can’t hide that you have 165 or so million in the bank. The best you can do is not to reveal what the actual trasfer budget is. That’s why I didn’t think it was wise to say that all that money could be at Fergie’s disposal. After all, the money in the bank can come in handy for other operations too.
http://www.moaningbastardmufc.blogspot.com/
Very much worth a read. Please have a look.
The 165 million in the bank is still the Glazers if they want it. I imagine it will go towards the PiK loan.
One thing you have to credit the Glazers for is increasing the amount of money coming into the club, and over 100M in operating profits is outstanding considering the current climate. Also, It is not in their interests to let the club fail.
However, no matter how much you try to put a spin on things. Basic maths will tell you that we can’t sustain these losses forever…
Yeah, I agree. That’s why I think they’ll sell the club sooner, rather than later.
“Gill sees a good set of accounts” He must be looking at his and Olivers the CUNT
The lack of clarity is due to a combination of the company being privately owned and a highly engineered financing structure. The former means they don’t have to report all details and host a press conference as publicly listed companies do – the Glazers have no shareholders to answer to and the fans are nothing more than customers who either come and see the team/buy the merchandising or don’t. Either way we don’t get a detailed explanation. The latter makes it complicated to completely understand but is not something to be feared. Were there ever to be something seriously wrong in the numbers, the first thing you’ll hear of it will be news reports of the bonds selling off dramatically in the financial markets and then you can start to worry – until then, if you want to worry about something worry about our form on the pitch as that is something that is both transparent and important to the Glazers.
For me the main thing to look at is the operating profit which is up about 10% on last year. Don’t obsess about the level of debt – PIKs by definition increase the level of debt each year but don’t cost in terms of interest. The number gets very complicated when buy-backs begin – is the debt retired or left on the balance sheet as an asset. Yes we have a lot of debt but it’s very much under control at the moment. And don’t worry about the sensationalist ABU press who focus on net losses – as pointed out by others, many of these losses are non-cash and so have tax implications more than being an indicator of our club’s health, and the one-off refinancing fees would have been fulling anticipated when issuing the bond earlier this year.
Financially the club is fine. I won’t be worried unless:
1. We stop winning things
2. SAF comes out and says he doesn’t have the money to spend he wants
3. We start hearing about the bonds falling dramatically or there being problems refinancing debt.
Now let’s worry about finding ourselves a GK…..
Corporate hospitality ain’t what it shoud be then. I have no fucking idea what a “non-cash goodwill amortisation” is but I’m guessing that the £35.4m won’t be available for buying players. The one off finance cost of £40.7m is just more money pissed up the wall. How much have the fucking Glazers skimmed off for themselves? I’d love to see the whole fucking lot of them lined up aganst the wall along with Gill and, for good measure, Kenyon. I’ll always hate that piece of shit, even if he went to City and fucked them up royally.
AndersRed say’s these are good results and I know he has been the bible for a lot of posters on this site.
Tony Starks – Spot on. Sick to death of reading how “we had to sell Ronaldo” Err don’t think so, we tried to keep him but he wanted to leave. Not a problem.
Meanwhile Edwin says the story of his possible retirement is “nonsense”.
hooligankicker
Now that makes sense – that’s the first time anyone ever said it like that – you have my applause for sure.
Eric Steele broke that story, about Edwin.
(er, I mistakenly posted this on a different topic, so just re-posting here, where it is more appropriate…)
The report I read said there’s a cash balance in the bank of £163.8m. Of course, just because that money is there doesn’t mean it has been (or will be) made available for buying players, or for paying down the debt. On the other hand, it obviously means the club is not skint either.
Opinions vary about whether it made sense to spend 7m (or 8m, or whatever it was) on Bebe (sight-unseen), when there were other established players available for about the same or not much more. But in my opinion, taking a 7m gamble on a complete unknown is not the action of a club that’s desperate to shave every shekel.
It’s not a question of whether we could have gotten better value elsewhere. The point is that Bebe can hardly be expected to justify that outlay in his first year; obviously, then, the purchase was not some cheap-skate attempt to improve the squad in the immediate short-term. If SAF was so hard up for a transfer kitty, that 7m (or thereabouts) was all he had available, then he had two obvious options: (a) if he felt the squad needed an immediate improvement, he could spend the money on someone established player who was available; or (b) if he felt the squad did not need to be improved immediately, or couldn’t see any way to do it for that amount of money, he could simply have held on to the funds for later. Instead, he chose to take this “gamble”.
It just doesn’t seem consistent with the notion that we have no money to spend. Unless you’re a kamikaze gambler, you don’t spend your last few pennies (or a good chunk of them) on some wild long-shot, especially when it will be some time before that long-shot pays off (if it ever does).
Also, while I deplore the debt, I do not agree that if it were not for the debt, we could (or would, or even should) go out and “compete” at the top end of the transfer market. For one thing, even with the huge revenue the club brings in, it would still be tough to compete the “open cheque-book” approach of some other clubs. And for another thing, I would like to think that we are smarter than that. We have a fine and proud history of building teams through a mixture of young players and the occasional “headline” purchase. Even if we were able to take the Shitty/Chelski/RM approach, I would not like to see it. Seriously.
And finally (sorry for the long post): a lot of people want to know why the Glazers are not paying down the debt. I don’t know, either. But one possible explanation is that, as a business matter, they don’t see it as important; they may even see the idea of paying down the debt as silly. Why? Because from their perspective, revenues have been growing (and continue to grow) from their global expansion/marketing operations, and for a lot of businesses, the issue is not whether you have debt, but whether you can service it.
While ordinary people like us recoil at the size of the debt and the interest payable on them, for many business-people, interest is simply a normal “cost of doing business” expense. Interest on loans is deducted from revenue, as an operating expense, BEFORE tax is charged. So even without the interest, not all of that money would have been available — some of it would have gone in extra tax.
I’m not defending the Glazers or the loans and interest, just trying to add some additional perspective. Cheers!
zmufca – Ha. Decent blog that pal.
Stateside and Hooligankicker – Good posts lads.
StatesideAussie
That makes sense too
Hallelujah! Common and sense has broken out on the ROM – : )
It was coming it really was!
Can anyone explain what is meant by “one-off finance charges”? What is it for?
Joel
One off finance changes for what they spent on restructuring the bonds
I guess they won’t be included in the reports this time next year then : )
I agree with scott. Think of what we could do with the cash we made between 2006 and 2010.
- more improvements to our training ground etc etc
- extent old trafford
- invest in new players, instead of buying youth players who are not ready for first team action. And we are relying on players united signed in 2006 2007 and 2008
Paul H – . I am not being funny but what have united done since 2009 on the field, no offence we are not exactly looking like the team that cleaned house in the premiership between 2007 and 2009. We do not look convincing, and the midfield which is well over 2 years needed new blood, scholes and fletcher cannot do it on their own they need help. United are letting it get worse by not freshening it up, when in the past fergie has always reinvented the team when the time is right. Under the glazer ownership we have not seen a change, and it is still the midfield of 2 3 and even 4 years ago.
@Joel
Can be lots of things – in this case they seem to relate to the refinancing of the bank debt with the bond. The bond is a lot more favourable to them as they generally have less terms and conditions attached and guarantee the amount of interest they will have to pay for the life of the bonds which gives them assurances regarding the interest amounts and means they don’t have to worry about going back to the financial markets for a while.
The charges will therefore be things like bank fees (to sell the bond) any penalties for early redemption of the bank debt etc. It seems quite a large number but my guess is they’ve squirrelled away some stuff in here for tax reasons – don’t know the details but would be my guess.
I bet the Edwin story was another one of those false newspaper quotes… seems like 95% of ‘interviews’ in the tabloids these days are just fake
@RTNK
Will you please read and try to understand some of the posts made here and on the previous story regarding the Dippers explaining the ownership alternatives……yes of course it would be lovely to have tons of extra cash being invested in the club but it is not going to happen, whether under the Glazers or anyone else who buys the club. We need to get real about this issue and move on.
To be fair, he is 40, he’s gonna retire one day.
As willie said, it was Eric Steele that fueled the whole Edwin story.
http://www.dailystar.co.uk/football/view/157412/Edwin-van-der-Sar-quit-hint-sparks-Man-United-keeper-hunt/
It’s good to see some posts from people thinking with their heads, not their hearts.
See what I don’t get is Ronaldo wanted to go so anyone arguing that point just doesn’t get it
But Hailey McQueen?
Now that’s what I don’t get
(Shhhhhhh don’t tell the wife : )
This blog is gettin funnier and funnier
Manchester United can continue to operate at a loss and mark my words we will get people on here saying that is ok in the form of a university thesus. Ha.
Come on I wanna hear more. You know who you are.
Bruce Thomas @ 13:35 Thanks for that link. It’s helpful although I am an absolute and complete innocent in these rarified financial/accounting matters. Another post on ROM that has impressed me with its “realistic” take on this story is the one from StateSideAussie @ 16:25, although I might just be impressed because he seems to agree with my sceptical assessment of all the doom-and-gloom as well as the naivety of some of the comments on these abstruse financial/accounting issues.
As with many things, it might just be “too soon to tell” but I have a good feeling about this year’s team and its prospects for more glory. Hope for the best…..
Well now we know for sure where the ronaldo money went.
denton davey- Hello there. I’ve got a good feeling about this year too. Even with our bad start there’s some hope in me yet.
If it’s gonna be a good year, then we’re going to have to play an awful lot better than Saturdays offering, that’s for sure.
willie- True that mate. But I’m sure we’ll get better over the season.
http://www.newsnow.co.uk/A/450073719?-11193
Another article on the debt.
need more consistent defence that’s for sure!!! hopefully how that we have Rio back, we can start beating teams away…
Good to see Talkshite just talking bollocks, reckoning the ONLY reason United sold Ronnie was to pay the eightyodd million highligted in the accounts. Will folk fucking realise he WANTED TO LEAVE!!
United Against Glazer – 30th October – March from Deansgate to Old Trafford. Not G&G, not FC, not MUST, not IMUSA, just United.
RTNK – Knee jerk? I vividly recall only 4 weeks ago you stating that with the addition of Hernandez and Smalling United look good and should walk the league mate. Now after a couple of draws its all doom and gloom with ya again. There is PLENTY of time for the lads to click and they will. Fuck me we are barely out of September.
Off topic but if I was Rio I would fuck Ingerlund off. Laughable that the abu media cunt’s are saying not only is his captaincy in doubt BUT he may not even get in the team? Yeah because Upson, King, Dawson are so great. Its pretty obvious that a fit Rio is still the best centre half about. You only have to look at United;s last two games.
@KIng Eric
I heard that Jagielka’s form has impressed Capello. Take that for what you will. I won’t complain if Rio doesn’t wear out his back next week. I think it’s time to call it a day for England. He doesn’t have the required fitness to play for both England and United anymore.
As for the Gerrard taking the captaincy, it was probably on the media and Capello’s wishlist for a while now. And once they saw Fergie make Vidic captain ahead of Rio, that was all the ammunition they needed.
@jon0077 … fuck off, you’re a disgrace.
@Bruce Thomas/Denton Davey … that article from Sporting Intelligence is very interesting.
We can see from this that a large chunk of the so-called “loss” is actually the result of accounting gymnastics … I don’t mean the sort of “gymnastics” that are merely thinly veiled smokescreens for the Glazers to siphon profit out of the club, I mean standard, regular procedures that are necessary from an accounting point of view, but actually meaningless in terms of cash.
In particular, look at the third group of figures: Depreciation, Amortization of players’ registrations, and Amortization of goodwill. Together, those three items account for 84,022,000 pounds, which is then deducted from the overall revenue. But what are they exactly?
Depreciation is an procedure to account for the decline in value of assets over time (usually fixed assets that are difficult/expensive to replace, like buildings and equipment). Obviously, over time, things wear out. The car you bought five years ago is no longer worth what it was then; it’s not even worth what it was last year. If you bought it for 20,000, and it’s now worth 5,000, then it has “lost” 15,000 over five years, or about 3,000 a year. When the car was purchased, it would have been entered in the books as an asset worth 20,000. But since it’s not worth that anymore, its value needs to be adjusted — you can’t continue to say that asset is worth 20 grand when it clearly isn’t. So that’s depreciation — a write-down on the books to account for assets that lose value over time.
Amortization of players’ registration is a similar thing. When you buy a player for, say 20 million, that represents a double entry in the books (or a series of them). One set of entries is negative: you just spent 20 million (or agreed to spend it over time). Another set is positive: you now own something that, at the time, was worth 20 million. But as we all know, a players’ registration becomes worthless when the contract expires (or earlier, if the player is sold, or maybe later if it is renewed; but at the current time, you don’t know either of those things, so for accounting purposes, you just assume it will expire and become worthless). So again, the value of that asset (the registration) is written down: a portion of each registration is written off each year, to reflect that. In simple terms: you bought the player’s registration for 20 million, and it was a five-year deal, so you write down 4 million each year. “Amortization” is simply the technical term for writing off a portion of something over its expected life.
And the same goes for goodwill.
But the bottom line of all these “expenses” is that it’s just a bunch of abacus-twiddling … 86 million worth, to be precise. It needs to be there, because if it wasn’t, the accountants wouldn’t be doing their job … but as my explanation hopefully makes clear, it doesn’t actually represent cash going out of the business. It is “just paperwork”, except that it does have the superficial effect of reducing the “apparent profit” (and the taxable profit) by 86 million.
Cheers!
GHTT – Hard to believe MUST and imusa won’t be involved in this march, who’s leading it?
Costas – Oh yeah mate I forgot about Jagielka. What has fucking Terry done to warrant no criticism? Oh he plays for cockneys. Yeah wouldn’t care less if Rio called it a day.
Another thing thats pissed me off again is the fucking MAIL. What is wrong with these fuckers? They have done a 5 to watch in the under 21′s. Not ONE mention of a United player in there ie Smalling, Cleverley, Wellbeck, Brown. 4 of the 11 are United players but they don’t deem it fit to include one in their ones to watch. A piss take.
http://www.dailymail.co.uk/sport/football/article-1318560/The-Friday-Five-England-stars-future-bring-glory-days.html
Fuck if this things carry on ,there will be league football (debt league championship) in near future teams involving real,barca,man utd,etc bar shitty they can play in BPL ..
willierednut
Its just an online manchester united orginised march. if your in must march-if you wear fc and sing “tha banks” march if youve tattoo’d your arse cheeks one green one gold with luhg wrote on your cock- march-
If You Love United And You Hate Glazers – This March is for you
I’m up for a good march. What’s the projected turnout?
Trotsky
Over 1,678,234 million
King Eric – We can’t keep giving Chelsea a head start, and then hoping they collapse. Sir Alex, has got almost everything out of this squad, I’m just wondering how much more is left in this squad. By the way, that’s not me being negative, just realistic. RTNK, might have went ott on a few points, but he is right in saying, that we’ll need to strengthen over the next few seasons, particularly CM.
Scott/admin members…
If you’re there, I have sent you an e-mail
Please have a look,
Regards
@ King Eric, Costas, Ghtt
hello mates….How are you
@jon007 – what a disgrace
@stateside aussie—some very fair points mate, but all is not hunky dory…you’ll know soon enough as I have prepared a note to clear up a few misconceptions. lets just wait for Scott’s decision.
@willie
completely agree…although two draws doesn’t mean the end of the world, its the nature of the performances that has me more worried….
United getting dominated away from home like that is not very encouraging….And statements like we ‘were satisfied with a point’ dont help either…
Since when do United start being satisfied with a point?
GHTT – Cheers mate, lets hope there’s a big turn out.
Red Devil – Spot on. The boss would never have accepted a performance like Saturdays, years ago. Still believe it’s all down to the players though.
@Willie
Yes, the players need to stand up and deliver…its still a young team, still developing….quite a few players were playing their first games in the league…..Owen, Macheda, Rio, Rafael, Anderson….it does take some time to gel and get fully upto speed….
However the fear-factor of the bygone era seems to have dissipated and now Chelsea carry that mantle now…yes, they may have had the easier games, but to still hammer teams 5-0, 6-0, 7-0 which they were doing at the back end of last season and this season takes some doing….
How many teams have United beaten by 4 or more goals in the last few years….difficult to remember very many…..if those games were that easy, why cant United beat those same teams by 5-6 goals?
@Red Devil … no worries. I’ll wait to see the note and maybe comment further then, but sure, I’m not trying to make out everything is hunky dory, just pointing out that it’s not all doom and gloom either. The bottom line is that the club does make more money than it spends … a fact which isn’t necessarily obvious from the “headline” figure of an 83.6 million “loss”.
@stateside aussie
Completely agree mate — the club does indeed make quite a lot of money
But how much of that is solely due to Glazers, that is the question.
The ABU media will forever try to ruffle United, but the truth is that quite a lot of that money goes in servicing totally unnecessary unproductive debt…
The club may not be on verge of bankruptcy, but the risks to its financial future are too great…
The biggest give-away is the Cash flow statement has not been released….that would clear up a lot of things…
look at the figures here http://www.sportingintelligence.com/2010/10/08/manchester-united-accounts-turn-record-100-8m-operating-profit-into-loss-of-83-6m-081009/
1) just a figure of 3.7 mn given for tax…no break up of current tax and deffered tax is made?
2) The figures given are consolidated accounts…the goodwill amortization is in the books of the holding…it wont save tax for the club…just for the holding company.
3) The headline figure of 83 mn loss is misleading…United fans should not panic seeing it, but even without the one-off charges, United would still have not made a profit would we? that means that the entire 100 mn operating profit has been eaten up in between.
4) Also, we may not make profits on transfers every year….13 mn is the figure for that? loss would have been greater if not for it..!
5) amortization of player registration is not due to Glazers…it is there with every club accounts and was there even before them…
Again begs the question how much have they actually contributed except for the small rise in commercial income every year…..compare it to the expenses and costs every year and you will see the cost benefit ratio isn’t too great!
http://www.bbc.co.uk/blogs/davidbond/2010/10/crunching_the_numbers_at_old_t.html
This is the most accessible account I’ve found so far.
key point from anders blod
No money has been paid out of the club to redeem the PIKs. I have no rational financial explanation for this and nor does anyone else I have spoken to in the market. Without sounding like a poor man’s Mystic Meg, I can only reiterate that I can see no other source to repay the PIKs other than United and that £70-95m will be used to do so at some point soon.
@Red Devil
Hey mate. All’s well. I hope you are fine too.
Just surviving mate…..just surviving
These international weekends are a pain the arse…just looking forward to survive this week without United football..and hopefully the players can make up for the bad start once this ridiculousness called friendlies and what not ends!
it is said in the guardian that the 165 millions are untouched and are there for sir alex if he needs to buy new players or invest in the training ground and the stadium
we are not a club that needs to sell gill said we have money in the bank so there is no pressure
its in the guardian if you want to read the whole article
Red devil. Yeah not bad mate. Just woke up on sofa. Hope ya well
Willie. I think central midfielkd will be sorted but that depends on owen. Anderson carroick form. Also on the development of young lads like james. Tom. Pogba. Morrison etc. The old man knows best usually and will know which lads will nake it. Have to disagree mate about the squad not havin much left in the tank. Like fgergie said the other week we coyld be set for the next eight years. Rooney fletch toni nani evans hernandez rafa etc still only young. Not looking too much into sunderland game. Just one of those awful days. Prior to bolton most were happy with our play just not the defence. Anyway sorry about grammar but on mrs blackberry and my fingers are far too sausage like
Goodnight pal
i was just wondering if the rise of ticket prices actually contributed to the rise of profits… i wonder… o.O
We are rich my ass!
Glazers go to hell!
King Eric – No probs mate. SAF genius keeps us up there year in year out, I’m just concerned how many more times this set of players can keep going to the well. Hargo possibly coming back would be a big bonus for United, but i’m getting my hopes up just yet.
From yhe rest of the world…good news!