Man U £100M operating profit, Overall Loss £80M

FTBFun

Generali wrote: »

Is the squad huge? I count 32 players according to Wikipedia, including 2 that are out on loan, one which has been brought in on loan and 2 which are unregistered. Didn't Ars**al name 76 players?

I wouldn't imagine that 'Arry has had much of a chance to increase the wage bill. He's not been a prolific signer of new players and I can't see why he'd control wage negotiations for existing players.

Obviously his reputation proceeds him but it appears that the board have a close eye on spending and I think that the club are assuming that 4th was a one off, not something that is likely to be a regular occurrence.

Ah, a fellow Spurs fan. You're not the Aussie that was mentioned in the progamme last weekend?

Fortunately Daniel Levy has this weird idea of actually running Tottenham as a business rather than a plaything. Joe Lewis, the chief shareholder in ENIC, is a multi-billionaire despite losing out on Bear Stearns: however unlike some other owners, such as at Chavski, he doesn't chuck money into the club at random.

This does lead to some unique situations - our dual shirt sponsors for example - plus the tickets aren't cheap, but given the small-ish stadium size it is a necessary evil so that we can at least try and compete with the Arsenals and Man Cities of the league.

Generali

FTBFun wrote: »

Ah, a fellow Spurs fan. You're not the Aussie that was mentioned in the progamme last weekend?

Fortunately Daniel Levy has this weird idea of actually running Tottenham as a business rather than a plaything. Joe Lewis, the chief shareholder in ENIC, is a multi-billionaire despite losing out on Bear Stearns: however unlike some other owners, such as at Chavski, he doesn't chuck money into the club at random.

This does lead to some unique situations - our dual shirt sponsors for example - plus the tickets aren't cheap, but given the small-ish stadium size it is a necessary evil so that we can at least try and compete with the Arsenals and Man Cities of the league.

It wasn't me I'm afraid. It's funny following the football over here, not least because it's completely normal to change allegiances if your team is relegated or just because you're bored with who you're following.

My understanding is that financing a new stadium is likely to come in large part from Joe, much of the rest supposedly from a share issue; it's very different to spend money investing in the physical assets of a club than on players and wages IMO.

It's pretty clear that at some point Man Citeh are going to kick Spurs back out of the top 4, if not this season then very soon and clearly no club can compete in the end with a team being run as a hobby rather than a business by a very rich man. What happens to Man Utd or Ars**al when QPR start having money pumped into them in serious quantities upon promotion?

smk77

Really2 wrote: »

I think I know what RBS will do there, they could end up selling it less than the debt should they get the penalty.

If they lose the case it looks like it might be possibe?

Can't really see what H&G can get out of this though. Come the 15th they either sell or lose even more?

Exactly. If Hicks wins then RBS take control but will have a club they'll struggle to get rid of a club with a 9 point deduction.

If Hicks loses but appeals RBS will extend the deadline for the same reason.

If Hicks loses and loses appeal then no problems!

Really2

smk77 wrote: »

Exactly. If Hicks wins then RBS take control but will have a club they'll struggle to get rid of a club with a 9 point deduction.

If Hicks loses but appeals RBS will extend the deadline for the same reason.

If Hicks loses and loses appeal then no problems!

I think that is where logic will prevail, how could the current board not be acting in the owners and clubs best interest.

Some are saying £300M is undervalued, but with no other bidders and H&G looking to lose the club on the 15th anyway the board have made the best decision for all.

I just want these guys out and the spotlight off us for a bit (next time for the right reasons hopefully)

Generali

Really2 wrote: »

I think that is where logic will prevail, how could the current board not be acting in the owners and clubs best interest.

Some are saying £300M is undervalued, but with no other bidders and H&G looking to lose the club on the 15th anyway the board have made the best decision for all.

I just want these guys out and the spotlight off us for a bit (next time for the right reasons hopefully)

I'm not 100% sure that the law is the same in the UK as in the US but I would imagine it is similar.

In the US, Directors must act in the 'fiduciary interest' of the owners of the company. They have no requirement to consider the interest of the underlying company as they are there to represent the owners' interests, nobody else's, certainly not the customers (fans) of the company (club).

If the Directors sign off on a sale that is below what the owners of the club consider to be fair value then they almost certainly have a case to be heard. Whether RBS can impose penalties/apply put the club into administration in the meantime is up to the courts I guess.

The_Fat_el_Hombre

liam8282 wrote: »

I have heard about this, but clubs such as Chelsea would be able to make an "exclusive" membership club, with massive membership fees that would boost the turnover.

So basically the membership club would have one member, the owner, and they could charge whatever amount they wanted to put into their club as a membership fee.

No that can't happen. It can't be too high above the market rate or UEFA won't have it

£83 million loss - Nice one Sir Malcolm :T

Really2

Generali wrote: »

I'm not 100% sure that the law is the same in the UK as in the US but I would imagine it is similar.

In the US, Directors must act in the 'fiduciary interest' of the owners of the company. They have no requirement to consider the interest of the underlying company as they are there to represent the owners' interests, nobody else's, certainly not the customers (fans) of the company (club).

If the Directors sign off on a sale that is below what the owners of the club consider to be fair value then they almost certainly have a case to be heard. Whether RBS can impose penalties/apply put the club into administration in the meantime is up to the courts I guess.

Good article here on it.
http://www.director.co.uk/ONLINE/2010/10_10_liverpool_NESV_takeover.html
to much to quote really.

There is no question here of the company being sold off without Hicks and Gillett’s consent. What is happening is that the board are converting Kop Football (Holdings) Limited’s major asset into cash. The shareholders will get whatever is left. If that represents a loss, it merely reflects the poor performance of the company in which they chose to invest.

So will the High Court halt the board’s current plans? It seems unlikely. Section 172 of the Companies Act 2006 lays down a general duty—so far untested in the courts—for each of the directors to act “in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole”.

The section goes on to lay down six further criteria: 1) The likely consequences of any decision in the long term 2) The interests of employees 3) The need to foster good relationships with suppliers and customers 4) The impact of the company’s operations on the community and the environment 5) The desirability of the company maintaining a reputation for high standards of business conduct and 6) The need to act fairly as between members of the company. It’s important to note that the duties prescribed in Section 172 are owed by the directors to the company, not its shareholders.

Hicks and Gillett face at least two hurdles. First, in appropriate circumstances, the duties owed to the company under Section 172 become duties owed to creditors. Assuming administration is inevitable in the event of the company being unable to meet its obligations to RBS, it is hard to see why the interests of creditors would not prevail.

On reading it seems the board are acting how they should, ad that RBS agreement that they can't change the board, it should be the result we want. (fingers crossed as we know anything can happen in court)

Generali

OK, so finally we have the Man Utd financial statement via the very excellent fool.co.uk website. Link

Page 21 lists the exceptional financial items:

Termination of interest rate swap agreements £40,682,000
Unrealised foreign exchange loss on dollar denominated senior secured notes £19,270,000
Accelerated amortisation of debt issue costs on repaid senior facilities £4,705,000

AIUI, they've brought forward potentially losses from fixing interest rates and adverse foreign exchange rate movements to today. Presumably this is in a (prudent) attempt to avoid losses in the run up to the UEFA 'financial doping' rules. Not ECL would be catastrophic for Man Utd's finances IMO.

@Really2 - Good post. It's worth noting this hasn't been tested in the courts. How does a Director's duty to act in the best interests of employees and suppliers marry with H&G's right to have their property (LFC via Kop Holdings) respected? Do you think they'll just roll over and accept a £140,000,000 loss plus financing costs? I sure as hell wouldn't/

lemonjelly

Man Yoo are also paying interest at circa 17.5% IIRC.

In response to Liam above, I am referring to risdale era Leeds (he went on to pretty much ruin cardiff too...)

Some people do seem to have a habit of breaking up football clubs. My thoughts on arry "envelope" redknapp are pretty well known, but you can't trust him. Hopefully Levy has a simiar stance to other chairmen, like Steve Morgan...

Really2

Generali wrote: »

@Really2 - Good post. It's worth noting this hasn't been tested in the courts. How does a Director's duty to act in the best interests of employees and suppliers marry with H&G's right to have their property (LFC via Kop Holdings) respected? Do you think they'll just roll over and accept a £140,000,000 loss plus financing costs? I sure as hell wouldn't/

The board’s legal obligations are clear. It must follow whatever course of action is most likely to see Kop Football (Holdings) Limited’s creditors repaid and, once they have been dealt with, to account for any residual value to its shareholders. That the residual value of Liverpool FC amounts to a loss doesn’t alter the board’s duty.

There is no question here of the company being sold off without Hicks and Gillett’s consent. What is happening is that the board are converting Kop Football (Holdings) Limited’s major asset into cash. The shareholders will get whatever is left. If that represents a loss, it merely reflects the poor performance of the company in which they chose to invest.

This legal expert does not seem to think under UK law it is H&G first. RBS first (creditors) shareholders next H&G