View Full Version : Man U's Debt
The Birdman
11-01-10, 07:20 PM
Just been a piece on Sky about how Utd's combined actual debt and their PI Kind debt will total over 1 BILLION by the time the term ends in 7 years.
Also says that in the last 5 years under the Glazers Man U have spent £150 million so £30 million a season yet fans criticise Rafa for not overtaking them :shake:
javier_monsterano
11-01-10, 07:24 PM
Pi kind?
The Birdman
11-01-10, 07:44 PM
Payment In Kind apparently (according to the financial expert on Sky) he was saying that the debt and the PI Kind debt are seperate and Man U aren't paying the PI Kind debt just adding it onto the original debt
Payment in kind? Are these debts sexual?
Vermilion
11-01-10, 07:54 PM
Just been a piece on Sky about how Utd's combined actual debt and their PI Kind debt will total over 1 BILLION by the time the term ends in 7 years.
Also says that in the last 5 years under the Glazers Man U have spent £150 million so £30 million a season yet fans criticise Rafa for not overtaking them :shake:
:handshake:
Just been a piece on Sky about how Utd's combined actual debt and their PI Kind debt will total over 1 BILLION by the time the term ends in 7 years.
Also says that in the last 5 years under the Glazers Man U have spent £150 million so £30 million a season yet fans criticise Rafa for not overtaking them :shake:
Why 2 threads? Can we merge?
Tatterdemalion
11-01-10, 09:12 PM
Payment in Kind debt, or PIK bonds are bonds where the interest rolls up rather than getting paid every year. It's believed that Man U are charged 14.25% per year for their PIK bonds, and that around £200m is outstanding (they paid off a substantial amount in PIKs a few years ago)..
However, the really nasty thing about PIKs is that they convert to equity in certain conditions, such as non-payment or default etc. I'm not sure what the terms are for Man U's PIK bonds, or how senior the obligation is relative to all the other debt. Usually PIKs are not senior and the other bonds are more senior (they rank higher in the capital structure, so get paid first in the event of a default). Usually senior bonds have a clause attached to them which prevents other debt being paid down before them which I believe is why Man U are having to refinance the whole caboodle rather than just the PIKs (as they are, net, increasing their interest charge).
Man U's PIKs are owned by some US hedge funds.
To put this another way, if United were to fall behind in some of their interest payments (presumably on the senior 'normal' debt) or some other such financial problem, they would find themselves with a US hedge fund owning a large part of them. They'd pretty much get sold to the highest bidder or more likely asset stripped to pay down the debt.
Our owners are bad, but they're not THAT bad...(not yet anyway).
The Birdman
12-01-10, 08:40 AM
Why 2 threads? Can we merge?
Sorry the reason for the 2 threads was this one is about Man U's debt generally and the thread in the Liverpool forum was the debt in relation to ours and Man U's spending over the last 5 years again against ours.....
glazier has taken out 10million in the last year to give to family according to a guy on talksport.
basically saying they are crippling the club with debt
glazier has taken out 10million in the last year to give to family according to a guy on talksport.
basically saying they are crippling the club with debt
All seems very odd to me:
Glazer family takes £20m in fees and loans from Manchester United
• Six members of family revealed to have borrowed from club
• David Conn: How the Glazers have milked United for millions
* Owen Gibson
* The Guardian (http://www.guardian.co.uk/football/2010/jan/12/manchester-united-finances-glazer-family), Tuesday 12 January 2010
http://static.guim.co.uk/sys-images/Sport/Pix/pictures/2010/1/11/1263246839398/Glazer-brothers-001.jpg
Avi, Bryan and Joel, three of Malcolm Glazer's five sons – he also has a daughter – in the stands at Old Trafford. Photograph: Mike Egerton/Empics/PA
Manchester United's owners, who loaded the club with more than £700m in borrowings to fund their purchase, have taken £10m out of the club in "management and administration fees" and have personally borrowed a further £10m in the past year, it has emerged.
The club's financial results, released yesterday, revealed that six members of the Glazer family on the Red Football board had borrowed a total of £10m, which does not have to be repaid for five years.
Manchester United also released an offer document yesterday for the £500m bond it says will be used to re-finance the £509m debt secured on the club.
The offer document reveals that on 30 June last year the club entered into a £2.9m-per-year agreement with SLP Partners, a company related to the Glazers. Since 1 July 2006 a further total of £10m has been paid in "management and administration fees".
"During the period from 1 July 2006 to the date of this offering memorandum, management and administration fees of approximately £0.6m, £1.8m, £1.4m, £3.1m and £3.1m were paid to our affiliates," it said.
Under the terms of the bond issue it promises to terminate the agreement with SLP Partners but reserves the right to pay up to £6m per year to "one or more entities related to our ultimate shareholders for administration and management services".
The 322-page offer document for those bonds, circulated in the City yesterday, also makes provision for £70m to be redistributed to the ultimate parent company for "general corporate purposes, including repaying existing indebtedness". This is thought to refer to the high-interest hedge fund loans secured against the Glazers' own shareholding in Manchester United. Those Payment In Kind loans, which accrue interest at a rate of 14.25% a year and "roll up" on an annual basis, are now believed to be worth almost £200m, as compared with £175m the previous year.
The document also reveals that the club has received a large slice, £35.9m, of its new £80m sponsorship deal with AON. It also reveals plans for a new £75m "revolving credit line".
City insiders expect the refinancing, put on hold when the markets collapsed in 2008, to succeed. The bond's yield, which could be around 9%, will be set only after an international roadshow. The offer document also reveals that Red Football recently lost £35m when attempting to hedge against a rise in interest rates last year.
In its financial results the club revealed that it was only the £80m sale of Ronaldo and other transfer dealings that lifted Manchester United out of the red last season. Results for the Red Football Ltd subsidiary revealed a pre-tax profit of £48.2m but also indicated the overall amount owed by the club and its owners broke the £700m barrier for the first time since Malcolm Glazer acquired the club in 2005.
Despite increased revenues, interest payments and write downs meant that, without the £80.7m realised in transfer profits in the year to June 2009, the club would have made a loss of £32.5m.
According to yesterday's results, bank loans secured on the club now stand at £509.5m, compared with £518.7m the previous year. Interest payments on that debt totalled £41.9m.
Representatives of the Glazers have repeatedly pointed to the cash flow generated by the club, once the interest on the loans had been serviced and before write-offs, as proof that money is available to Sir Alex Ferguson for team strengthening purposes.
The Glazers have been keen to emphasise that the PIK loans, advanced by hedge funds at a high rate of interest when the family last restructured the debt in 2006, are not secured on the club but on their shareholding in it. If they were to default, the hedge funds would not have any say over the operational side of the business.
The £500m bond issue, if fully subscribed, is unlikely to reduce the club's interest burden in the short term. It will be used to repay four secured loans, with interest rates of between 2.125% and 5% above the Libor rate at which banks lend to one another. Those rates were swapped for a fixed rate of 5.08% last year.According to the offer document, those hedging arrangements had cost Red *Football around £35m to 6 January this year. It has promised to use some of the proceeds of the bond issue to reduce the liability by £8m. City sources said that the seven-year bond would give the Glazers greater certainty and no longer leave them at the mercy of the market. The release of yesterday's figures will have partly been designed to prove to potential investors the health of Manchester United's cashflow position despite its heavy debt burden.
The club's results showed an increase in turnover for the year to June 2009 to £278.6m from £256.2m as matchday revenues, media income and commercial revenues all continued to rise.
Matchday revenue increased from £101.5m to £108.8m, largely thanks to increased season-ticket prices, while media revenues rose from £90.7m to £99.7m and commercial income rose from £64m to £70m. The club will also point to a wages to turnover ratio of 44%, which compares favourably with most other Premier League clubs.
there would be financial meltdown if they hadnt sold ronaldo.......
who knows we may not have to sell torres aand they have to sell there 1 only other asset Rooney.....or maybe vidic is worth a few quid to.
We may not be what we were but i predict an almost liverpool fall from from grace for scum over the next 10 years
Vermilion
12-01-10, 10:41 AM
Knowing their luck, some Chinese Zillionaire will come along and snap them up, doubling their fan base and income in one foul....really foul...no horrendously foul swoop.
edit. Nah just kidding, it'll never happen ?
foul instead of fell obviously.
Crash and burn please.
I do find it odd that they have allowed their debt situation to worsen. Surely they could not have planned for things to go like this when they took over.
Crash and burn please.
I do find it odd that they have allowed their debt situation to worsen. Surely they could not have planned for things to go like this when they took over.
not so sure, they have taken a lot of money out which in effect they didnt have to start with!!!
i am sure they are very pleased :)
lets face it, someone will step in and buy the club when they are about to be ruined!!
Thats the thing though, Im pretty sure they have increased commercial revenue year-on-year since they took over. So if they have gotten into a worse state financially then how did it happen? Malcolm Glazer probably has the most experienced money men around to manage his businesses so did the purposely allow the interest on the debt to get out of hand?
JohnDoe
12-01-10, 04:58 PM
We also have PIK debt.
BigChief
12-01-10, 05:22 PM
Pi kind?
Rewind
Was on SSN this morning that they may be selling their training ground and leasing it back?
Our owners should buy it through a 3rd party and then lease it to Man City
Exiled_red
13-01-10, 11:44 AM
Was on SSN this morning that they may be selling their training ground and leasing it back?
Who to the council? They always seem to bend over for the scum.
Who to the council? They always seem to bend over for the scum.
I doubt it - Probably Peel Investments or a finance co.
The figures for man utd include the sale of Ronaldo but I think someone has said that they don't include any of the buys suchas Valencia, etc, etc which would make the results look even worse.
The big problem with United and too ourselves a wee bit is the TV money is collective and shared equally. IMO, this is the reason the Yanks have become involved as the serious money would be in singular TV deals such as madrid and Barca.
Exiled_red
13-01-10, 02:12 PM
I doubt it - Probably Peel Investments or a finance co.
The figures for man utd include the sale of Ronaldo but I think someone has said that they don't include any of the buys suchas Valencia, etc, etc which would make the results look even worse.
The big problem with United and too ourselves a wee bit is the TV money is collective and shared equally. IMO, this is the reason the Yanks have become involved as the serious money would be in singular TV deals such as madrid and Barca.
I can't see that happening to be honest, as the majority of the Premiership clubs would have to agree and probably all but the top 4 clubs would be worse off, as it's the big clubs that have the financial muscle that brings in lucrative deals for the Premiership as a whole.
BillobShaisley
13-01-10, 02:46 PM
In the US, not only is the TV revenue shared but all merchandising too! Combined with wage caps, its a licence to print money. I think a few of them are struggling with the competitive nature and success dependent income of european sports models.
Baracus
13-01-10, 02:53 PM
In the US, not only is the TV revenue shared but all merchandising too! Combined with wage caps, its a licence to print money. I think a few of them are struggling with the competitive nature and success dependent income of european sports models.
Its the future of football IMO, and will lead to a more competitive league and comptetions across the leagues. Premier League football IMO just follows the NFL, from Monday Night Football, presentation to stats, merchandising nothing has been innovative
BillobShaisley
13-01-10, 05:08 PM
Can't see it happening while we maintain relegation. In the US its a franchise with guaranteed entry to all the competitions. Would I prefer a more competitive top division without promotion/relegation....no!
There now saying they will have to sell Old Trafford and their Training Ground Carrington
There now saying they will have to sell Old Trafford and their Training Ground Carrington
:)
Tatterdemalion
16-01-10, 01:44 PM
We also have PIK debt.
Don't believe we do actually. Not unless you count a standard secured loan as PIKs, in theory they are similar, but not the same thing.
Tatterdemalion
16-01-10, 01:46 PM
• David Conn: How the Glazers have milked United for millions
http://static.guim.co.uk/sys-images/Sport/Pix/pictures/2010/1/11/1263246839398/Glazer-brothers-001.jpg
Avi, Bryan and Joel, three of Malcolm Glazer's five sons – he also has a daughter – in the stands at Old Trafford. Photograph: Mike Egerton/Empics/PA
.
I bet the daughter is a real looker.
I bet the daughter is a real looker.
:handshake:
http://www.grimmemennesker.dk/data/thumbnails/2/HPIM02062.jpg
Tatterdemalion
17-01-10, 02:10 AM
:handshake:
http://www.grimmemennesker.dk/data/thumbnails/2/HPIM02062.jpg
Hands off....she's mine.:jizz:
The former chairman of a Manchester United supporter's group has urged Sir Alex Ferguson to resign in protest at the Glazer family's ownership of the club.
A meeting was arranged by the Manchester United Supporter's Trust (MUST) before Saturday's game against Burnley, at which Johnny Flacks, a founding member and former chairman of the Independent Manchester United Supporters' Association, spoke.
The Guardian reports that a protest march is planned for before the Champions League tie against AC Milan in March, and Flacks proposed that the group write to Ferguson asking him to quit in solidarity.
"This is not intended as an Alex Ferguson rant," Flacks is quoted by the paper as saying.
"But he claims to be a socialist, a former shop steward and a man of the people, so he must be horrified by what is going on. It would work only if thousands of people sent a copy of this letter to Ferguson letting him know that our fear, if the Glazers stay in control, is that his legacy is going to be destroyed. We wouldn't want that and I don't think he would either."
Asking the most successful manager in the club's history to resign over a matter of principle will seem ludicrous to many, a fact that Flacks acknowledged.
"That is the ridiculous scenario," Flacks said. "We are talking about a manager who has achieved so much for the club and has created the monster that is Manchester United. But we have to look at the greater good and at the moment we have the ludicrous situation where a club that gets over 70,000 supporters is losing money.
"This would be Ferguson's chance of saying that something had to be done. He would be looking after the club in the longer term if it meant the Glazers would sell more quickly. And if he said he was going to resign, maybe that would also encourage potential buyers to hurry up."
However, MUST have confirmed that they do not support Flack's sentiments.
In a statement released to members of the group, MUST said they are absolutely behind Ferguson and that, 'The only people we want to see leave Old Trafford are the Glazer family'.
There was sustained anti-Glazer chanting at the Burnley game, with a large banner that read 'Love United, hate Glazer' unfurled at the Stretford End, a banner that was confiscated rapidly.
they are going to put season tickets up by 11%
The_weatherman
18-01-10, 01:07 PM
they are going to put season tickets up by 11%
How much have they gone up since the Glazer's took over? Surely there has to be a breaking point in these prices? At some point supporters will refuse to buy tickets?
Exiled_red
18-01-10, 02:12 PM
The former chairman of a Manchester United supporter's group has urged Sir Alex Ferguson to resign in protest at the Glazer family's ownership of the club.
:rash:
:haha::haha::haha:
Vermilion
18-01-10, 02:18 PM
It is quite amazing though, that the two most successful sides in England get taken over by americans lending money to do so, it's bad for us, but for utd, who didn't even need investment so had no real reason for a takeover, and making more than enough cash to sustain a world class squad and spend big as a rule, and already being Champions, how the fuck did this happen, crazy.
Exiled_red
18-01-10, 05:24 PM
It is quite amazing though, that the two most successful sides in England get taken over by americans lending money to do so, it's bad for us, but for utd, who didn't even need investment so had no real reason for a takeover, and making more than enough cash to sustain a world class squad and spend big as a rule, and already being Champions, how the fuck did this happen, crazy.
I don't think the two deals were that similar; United were a PLC so anyone could buy shares, The Glazers offered the major shareholders a good price for their shares and built up their holding until they could own all the shares and take them off the stock market. Moores sold up because he believed it was best for the club, the United deal was more about business.
Ferguson a socialist. :haha:
Only when it suits him.
Prick.
javier_monsterano
18-01-10, 07:14 PM
I hope they don't get taken over.
I remember hearing that Qatar is a very wealthy country
someone from there was supposed to be linked with the scum.
javier_monsterano
20-01-10, 04:08 PM
http://news.bbc.co.uk/1/hi/business/8470595.stm
Leyton388
20-01-10, 06:27 PM
yep their fucked. As much as we hate them its a fucking shame that two of englands most successful clubs are being raped by parasites. Its not right and somthing should be done.
http://news.bbc.co.uk/1/hi/business/8470595.stm
So, by winning the league and reaching the CL final, they made a loss of £75m before transfers?
That cant be right, can it?
BBCs figure must be missing the amount spent on players. Anyone know how much that was?
Liverpel
20-01-10, 11:48 PM
Manchester United's parent company has filed accounts for the year ending 30 June 2009 that reveal the club's overall debt has gone past £700m for the first time, swelling to £716.5m. Rumours that the parent company in question is considering a name-change from the Red Football Joint Venture to the In The Red Football Joint Venture remain unconfirmed.
There now saying they will have to sell Old Trafford and their Training Ground Carrington
Yeah :cheerleader:
Then we have a big modern stadium to rent, and don't have to wait for investment in our own! :cheerleader:
Well their bond issue was successful.Not exactly sure how it helps since interest on the bonds is 45 million as opposed to 41 million on the current loans
Manchester United have successfully raised £504million through a controversial bond issue that has caused some opposition from fans.
The money will enable United to pay off most of the club's current £509m debt and could help the Glazer family tackle the £202m payment in loans which continues to grow.
Red Devils officials, including chief executive David Gill, have been on a world tour to drum up interest in the bonds, which will run until February 2017.
Doubt was cast over the prospects of being able to sell them, but they have been over-subscribed.
However, the interest payment on the bonds will be £45m compared to the current £41million on the bank loans.
A spokesman for the Glazer family claimed the deal will bring a 'transparency' to United's finances for the next seven years.
The deal is expected to give the club's owners more flexibility in the running of the Old Trafford outfit, and could bring them leeway to make some new signings.
http://www.skysports.com/story/0,19528,11095_5879235,00.html
Exiled_red
23-01-10, 10:03 AM
Well their bond issue was successful.Not exactly sure how it helps since interest on the bonds is 45 million as opposed to 41 million on the current loans
Manchester United have successfully raised £504million through a controversial bond issue that has caused some opposition from fans.
The money will enable United to pay off most of the club's current £509m debt and could help the Glazer family tackle the £202m payment in loans which continues to grow.
Red Devils officials, including chief executive David Gill, have been on a world tour to drum up interest in the bonds, which will run until February 2017.
Doubt was cast over the prospects of being able to sell them, but they have been over-subscribed.
However, the interest payment on the bonds will be £45m compared to the current £41million on the bank loans.
A spokesman for the Glazer family claimed the deal will bring a 'transparency' to United's finances for the next seven years.
The deal is expected to give the club's owners more flexibility in the running of the Old Trafford outfit, and could bring them leeway to make some new signings.
http://www.skysports.com/story/0,19528,11095_5879235,00.html
:confused:
What's the deal with this? People are saying this will pay off their debts and allow them more money to buy players, but surely they are just borrowing money from somewhere else to pay off existing debts, at most doesn't it just delay the time they have to repay by?
Leyton388
23-01-10, 10:14 AM
Sounds like when you take out a loan to pay a credit card off. You are just moving the debt somewhere else to get people off your back and give you more time.
Sounds like when you take out a loan to pay a credit card off. You are just moving the debt somewhere else to get people off your back and give you more time.
correct, but sometimes it can also make it easier to do payments if you could get a lower interest loans, and if you can gather all your loans in one it's cheaper on the administrative part.
But if this is more expensive for them, I see little point in it :confused:
Exiled_red
23-01-10, 01:35 PM
correct, but sometimes it can also make it easier to do payments if you could get a lower interest loans, and if you can gather all your loans in one it's cheaper on the administrative part.
But if this is more expensive for them, I see little point in it :confused:
They should have been watching all the ads on daytime TV, they could have got a cheaper deal :crackoff:
BillobShaisley
25-01-10, 11:30 AM
It allows them to pay the higher interest payment in kind loans before clearing the bigger but cheaper debt. Also I think this would be at a fixed rate and they'll be gambling on a rate hike during the next 7 years.
Craig_H
25-01-10, 02:30 PM
http://www.getyourloan.co.uk/img/ocean-finance-logo.gif
Exiled_red
25-01-10, 03:50 PM
http://www.getyourloan.co.uk/img/ocean-finance-logo.gif
They've got their own TV channel you know... :crackoff:
Sky Sports News understands that Fulham have accepted a bid from Manchester United for centre-back Chris Smalling.
Must have some money then.....
Peterborough chairman Darragh MacAnthony has slammed former boss Darren Ferguson for unsettling players.
Every week brings another drama and it usually involves an ex-manager, a current team member and the promise of bigger wages followed by a derisory £100k bid and all this after the player has been unsettled and offered terms behind our back", MacAnthony said.
"Ask him (Ferguson) why in the last seven days he has offered terms to some of our players without agreeing terms with our club for them and of course totally unsettling these players."
Tatterdemalion
26-01-10, 10:55 PM
It allows them to pay the higher interest payment in kind loans before clearing the bigger but cheaper debt. Also I think this would be at a fixed rate and they'll be gambling on a rate hike during the next 7 years.
I don't think they are gambling on rates at all. They appear to have a hedging department which does this for them (or not! :haha:)
However, you are right. The point of raising this debt is so they can pay off the PIKs as, as things stood, they couldn't pay down the PIKs first as the other bondholders had seniority - they had to be paid off first.
Although it looks like ManU are fooked, I don't believe they are. Rolling over this debt is a sign that the Glazers are in a position to pay off the PIKs, which they will, which will then seriously increase United's ability to compete in the transfer market.
It's not great news tbh.
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