Manchester United debt hits £716m

Really2

lemonjelly wrote: »

If these things come in cycles, & it starts to slip for them, who'll shed a tear?

Me but it wont be from being upset.
I might even laugh so hard a bit of wee might come out.:D

lemonjelly

Mr_Matey wrote: »

Gotta love the world cup tho', eh lemonjelly?

Not sure whether or not I should say "not as much as the ashes, eh Mr Matey?:D";)

lemonjelly

inspector_monkfish wrote: »

jelly, i think you should explain that is NOT your rant, but by a disgruntled QPR fan.....

Yeah, cut & pasted from elsewhere.

Not a lot to disagree with there though...

nearlynew

ses6jwg wrote: »

How on earth does a club with one of the largest fan bases and strongest brands on the planet get itself into such a mess?

............ By thinking that debt is wealth.

Sir_Humphrey

Harry_Powell wrote: »

LOL, hopefully they'll 'do a Leeds' and end up playing their football in Div 1. I can't see too many Londoners and Irish treking up/across to Manchester to watch that. :rotfl:

If Man U do end up in the doo-doo thanks to a leverage buyout, EVERYONE will understand why they can be such a bad thing, not just those who read the financial pages. It is one thing to wreck a company few know or care about, but another for a sports club (or chocolate maker?)

Harry_Powell wrote: »

We (Spurs) could end up stealing their players instead of the other way around. "Manu are our feeder club, Manu are our feeder club, la la la", Oh I can almost hear it now

I spent a very enjoyable afternoon in the away end of White Hart Lane on the 12th December - not sure there was much atmosphere in the home end towards the end though. :rotfl::D

princeofpounds

How on earth does a club with one of the largest fan bases and strongest brands on the planet get itself into such a mess?

Sigh. Debt is not necessarily an indication of a mess, and taking money out of a club is not necessarily a bad thing. People have a very fuzzy idea of how companies are run and this causes a lot of confusion.

Debt first. A healthy company will normally use debt as part of its capital structure, because interest can be deducted from taxable profit. This creates a debt shield, that means that part of the cost of the debt is paid back in avoiding taxes. Because it is a senior claim, debt also tends to be cheaper than equity (owner's own finance) for a company to use because it is less risky for the lender than the investor.

Debt is therefore a very cheap form of financing and it makes sense to use it to a considered safe level if the return the business is able to generate on its invested capital is higher than the cost of that same capital.

Now Man U do have quite high levels of debt as a stand-alone entity, but frankly that means very little unless you know about the Glazer's capacity to repay it, which you don't. It's their business and they can run it how they like.

As for taking money out of the company, firstly as I pointed out above it is the Glazer's company. It's no-one else's business what they do with it. If you had a windowcleaning business and were not allowed to take money out of it you would think it was ridiculous. Same issue here.

Taking money out is not really a cost to the company. It is a dividend, like you would receive from almost any share you own in your pension plan. It is the shareholder's money whether it is in the company or outside the company, it doesn't necessarily disappear or get spent; they might just have a home for it where it can generate a higher return before being reinjected into the club to fund a player purchase or whatever.

redpete

ses6jwg wrote: »

How on earth does a club with one of the largest fan bases and strongest brands on the planet get itself into such a mess?

Because it is somehow legal to borrow tons of money to buy a company, then transfer the resultant debt into that company and take out lots of cash as 'fees' or 'commission'.

lemonjelly

Really2 wrote: »

Me but it wont be from being upset.
I might even laugh so hard a bit of wee might come out.:D

I have a passionate dislike for ManU, for a variety of reasons. I would like them to not win any trophy for some time.

Some of their "fans" who I've known in my life have been right C U next tuesdays.

However, the REAL fans I will feel for. Kinda like pompey fans now. To be honest, I'm no real fan of pompey, however I do appreciate that there are a number of supporters who have invested heavily in their club over time, all to see a few fly by night idiots ruin their club.

That's hard to take.

Howcome it has got to the state it has, where clubs can lurch from crisis to crisis.

There is an important economic link here. Prosperity can be linked to local sporting success. In 66, when england won the world cup, production was significantly boosted in the near term, purely on the outcome of a football game.

I remember very well the dark days my club faced in the 80's, we nearly went bust. Hell, I even remember albion fans being involved, collecting money to support the club & keep us afloat. Dark days. A falling down stadium. Owners stripping the club of every asset. & that has taught me to never wish a club to go out of business.

It is the fans, & the community that suffer.
£ has ruined football to some extents.

baby_boomer

I salute the Glazers.

Bringing fairness and competition back into our national game & reviving the FA Cup, a national treasure of a competition . They are brilliant for football.

Sir_Humphrey

princeofpounds wrote: »

Sigh.

Now Man U do have quite high levels of debt as a stand-alone entity, but frankly that means very little unless you know about the Glazer's capacity to repay it, which you don't. It's their business and they can run it how they like.

As for taking money out of the company, firstly as I pointed out above it is the Glazer's company. It's no-one else's business what they do with it. If you had a windowcleaning business and were not allowed to take money out of it you would think it was ridiculous. Same issue here.

Oh come on, they are having to asset-strip players (Ronaldo) without a like-for-like replacement. If they start to lose out on silverware or even the Champions League, then they could go into a spiral. It would not be the first time a top flight team has declined; trust me as a Wolves fan I know. It is quite clear that things are not going to plan at Old Trafford.