Manchester United debt hits £716m

kennyboy66_2

Generali wrote: »

For those that can access the 'Long Room' area of the FT website:

Then follows a lot of detailed analysis, finishing with:

Apparently the writer has 15 years of financial analysis behind him and a season ticket at Old Trafford.

It will be remarkable considering until recently the so called big 4 looked impregnable such is the riches from the Champions League, if both United and Liverpool can be brought down to earth by their capital structures.

If you look on viagogo sites
http://www.viagogo.co.uk/manutd

there are tickets for sale for all of United upcoming home games.

We are not far from a tipping point, particulalrly as whoever follows Ferguson as manager faces a thankless task replacing Van de Saar, Giggs, Scholes, Neville, not to mention Ferdinand who is 32 this year and on a downward slope.

I am pretty sure that Rooneys (by far the best UK player I have seen) contract has just 2 years to run.

Capitalism eh - you can't beat it !

Generali

I think the thing to remember longer term about Man Utd is that they have a solid business holding up a rancid financial structure. If they fail to qualify for the 'Champions' League then presumably the decline will be rapid, in the manner of Leeds.

Nobody's going to buy the club with £700,000,000 of debt attached to it. Better wait for them to go bust and buy them for £300-400,000,000 or even less if they've been relegated.

However, if this happens Man Utd still continue to exist and can be rebuilt under a better financial structure.

Personally, I think this shows the best and worst of capitalism.

Sir_Humphrey

It would seem that the reward for success, good management and sound business in the free market UK is to eaten alive by asset strippers.

Generali

Sir_Humphrey wrote: »

It would seem that the reward for success, good management and sound business in the free market UK is to eaten alive by asset strippers.

I dispair somtimes.

Come up with a link where someone realistic says that inflation and money supply aren't correlated yet BTW?

kennyboy66_2

Generali wrote: »

Nobody's going to buy the club with £700,000,000 of debt attached to it. Better wait for them to go bust and buy them for £300-400,000,000 or even less if they've been relegated.

.

I'd disagree there for 2 reasons.

They can clearly make an operating profit before interest of somewhere between £50 - £80 million a year.

Football clubs, like newspapers in the past will always (at least for the next decade) attract vanity purchasers - and there is nothing in football with the global reach of United.

I reckon they will be sold for upwards of £400m plus debt in the next 4 years to someone from the middle east.
They are many times more attractive than Chelsea or Man City who have of will have consumeed at least £500 - £800m of their owners cash within the next few years. Does it make economic sense ? No, but football rarely does.

Generali

Good point about vanity buyers. Would someone reallty buy a company with an operating profit of £80,000,000 for £1,100,000,000? IIRC, the Japanese were making similar 'investments' in the US in the 1980s.

kennyboy66_2

Generali wrote: »

Good point about vanity buyers. Would someone reallty buy a company with an operating profit of £80,000,000 for £1,100,000,000? IIRC, the Japanese were making similar 'investments' in the US in the 1980s.

I wouldn't (not when you can get 9% on the debt) but it makes a lot more sense than what Abramovich has done with Chelsea or what Mansour is trying to do at City, both of whom appear years away from even having a reasonable business model.

Arsenals market capitalisation is just shy of £600m with about £300m of debt.

Does £1.1bn for United (inc debt) seem fanciful ?

Generali

kennyboy66 wrote: »

I wouldn't (not when you can get 9% on the debt) but it makes a lot more sense than what Abramovich has done with Chelsea or what Mansour is trying to do at City, both of whom appear years away from even having a reasonable business model.

I guess so. Clearly it's not a great business model but as a vanity hobby? Why not.

Football clubs have long been bought by the local businessman for vanity reasons. I guess all that's happening now is the scale has changed from a bloke with a few car yards (Aldershot FC in the 1980s) to a bloke with the rights to half the gas in Siberia.

kennyboy66_2

Generali wrote: »

I guess so. Clearly it's not a great business model but as a vanity hobby? Why not.

Football clubs have long been bought by the local businessman for vanity reasons. I guess all that's happening now is the scale has changed from a bloke with a few car yards (Aldershot FC in the 1980s) to a bloke with the rights to half the gas in Siberia.

Or Bob Lord the "butcher of Burnley", who Steve Kindon* tells some great stories about.

Ex Burnley and Wolves centre forward, may be a bit before your time, but didn't play football before he was 16 as he went to a Rugby League school in Warrington. An excellent after dinner speaker, albeit in a sea of dross ex pro's on the 'sportsmans dinner circuit.

Generali

kennyboy66 wrote: »

Or Bob Lord the "butcher of Burnley", who Steve Kindon* tells some great stories about.

Ex Burnley and Wolves centre forward, may be a bit before your time, but didn't play football before he was 16 as he went to a Rugby League school in Warrington. An excellent after dinner speaker, albeit in a sea of dross ex pro's on the 'sportsmans dinner circuit.

Did a bit of a Google. 'Controversial' would be a reasonable adjective to use. 'PC' would not.