It seems like the goal is to get the match called off. I don't think they were trying to voice displeasure at the players or Ole. Just trying to stop them from getting to the stadium so that they game can't be played. Same with the pitch invasion.

Nothing like giving the FA cause to force us to forfeit the game

I would not be upset if the FA docked the club 10 points and they missed champions league. The club. The fans. They both have absolutely embarrassed themselves in the last 2 weeks.

Kinda funny Americans on here telling fans that live in Manchester and England how to act

Meh, I'm not saying I agree with everything I've heard occurring at OT (no video coverage here) but lumping the fans into the same category as the Glazers is far from fair. In fact, I hope clubs of other fans do something similar in coming weeks. Delay/cancel multiple EPL games.

And if they dock United 10 points...I'm fine with that. And I don't just say that because I'm confident they won't. Legit wouldn't bother me.

Game has been called off

Damnit! One of the few chances I get to watch them and it's canceled.

What exactly have the Glazers done that is so evil?

The fans have twice broken into Woodward's personal residence. In the last 2 weeks, fans have broken into United's training grounds and now Old Trafford. This time causing significant damage.

You're right it is not fair to compare the Glazers to the fans. The fans have been much worse.

Broken in? Are you referring to the time they set flares off and demonstrated outside of his property? Or are you referring to the more recent incident that was so minor, the police weren't even called? Maybe I missed it but to my knowledge, no one has ever gotten anywhere near his actual property let alone his house. Not sure what you're constituting as "broken in".

As for "what exactly have the Glazers done?"...there's a litany of very detailed reporting that's available with an easy Google search. Here's a great place to start

https://theathletic.com/1833452/2020/05/26/glazers-malcolm-joel-manchester-united/

The Glazers have cost United over 1.5 billion pounds. The Glazers have personally extracted over 200 million pounds from the club.

It can more or less be summarized by a strategy that looks to maximize value and profit so that the Glazers can extract it from the club. Winning and being successful is only of secondary importance in so much as it increases value. Investing enough to secure value so that it can be extracted by the owners is the motive (i.e. 4th in the EPL), not the actual winning of trophies.

And before you, or anyone else, says it, pointing towards the massive transfer fees and net transfer spend of United does nothing to prove against anything written above. None of that money was spent before the servicing of debts (which currently stands at over 400 million pounds). None of that money was spent before the Glazers extracted their money from the club.

And you know what? I wouldn't give a crap about any of that if United actually prioritized winning trophies over paying dividends and making their investment enticing to investment groups who, in turn, only care about their ROI. If the fans were actually meaningfully consulted about crap like Super League...or anything for that matter. If OT was actually renovated and not a complete dump. If the training ground was still considered one of the best in Europe. If stock dividends were cut 25% just like player wages when the club doesn't qualify for the CL (Dividends always get paid out because it looks bad if you don't. Even if you can't afford it. Even if you're in a pandemic.)

But it's been 15 years and none of that has happened. None of that will ever happen. Because the extra X% needed to invest to win trophies isn't a significant enough value add to finishing 4th (TV deals and CL guarantees that). Because they don't see the capital spend needed to improve OT and Carrington as being something they can sell to their investors. The ROI calculation doesn't "work". Because keeping their investment groups happy, selling the value of MUFC (the NYSE share...not the club), and extracting money from it takes priority over everything else. We know what they are and how they want to run this football club. It's pretty effing horrible if you ask me.

But hey, to each their own.

The extraction of money is real. They are borrowing against the value of the team to facilitate player wages and transfer fees and adding debt the books while taking profit for themselves. If they were plowing the profits back in it would be a different matter.

I hate the petrodollar/sovereign teams for what they are doing but they are at least putting their own money in to pay costs.

So really it comes down to everyone is mad that the Glazers make money. Like I said.

Give me Saudi. Give me Dubai. Anything but American Pie.

I don't like how the Glazers have run the club. But to act like they are the most evil owners in sports because they want to make money is frankly idiotic.

Mathguy64 said:

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The extraction of money is real. They are borrowing against the value of the team to facilitate player wages and transfer fees and adding debt the books while taking profit for themselves. If they were plowing the profits back in it would be a different matter.

I hate the petrodollar/sovereign teams for what they are doing but they are at least putting their own money in to pay costs.

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So as long as actual terrible people put money in to win trophies, It's all good.

That's literally one of the main reasons people like Sheik Monsour and the Qatari rule family invested in football clubs. They want to clean their image.

Furlock Bones said:

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So really it comes down to everyone is mad that the Glazers make money. Like I said.

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I didn't mean to gloss over this part but...I mean, I don't know about you, but when I check the paper to see how my favorite teams are doing, I go to the sports section to see where they are in the standings, the results of the most recent game, who they've drafted/signed.

I don't go to the financial section to see how high their stock is or what the total value of the club is.

I'll say it again. If the Glazer model actually yielded on field results. Included enhancements and investments in things like Carrington and OT. Proactively sought fan involvement. I wouldn't give a damn if the Glazers made $2 billion a year as owners of Manchester United.

It doesn't. They don't. It's clear after 15 years. They need to go.

I don't disagree that the Glazers are bad owners. They don't know how to win or maybe even care to. I'm just saying acting like they are evil owners is dumb. And what the fans that broke into the stadium did yesterday was trash.

I don't hate them for who they are or their politics. I think a sovereign owning a sports team is an inherently unfair advantage. They have the wealth of a nation and effectively an unlimited bankroll with which to find a team. The team can loose $1B and it doesn't matter to them. At some point any individual owner has a limit to what they can do. Not so with Dubai, Qatar. It's not a level playing field.

FFP was a hot mess as a solution but at least it represented some measure of making the field level. Both City and PSG drove tanks through FFP. And UEFA and CAS let them.

If the Glazers want to peel profit off and run United to the ground by running up debt they are free to do it. But there should be a penalty at some point. They should be bankrupting themselves by having a margin call on the debt. The problem is if it ever gets to that point they will bail and saddle the next owner group with that debt.

I'd just like to point out a few things from a business perspective:

1) The IPO was their only success story financially. This was a huge win for them.
2) The dividend rate is mediocre, they'd easily do better elsewhere if they were looking for income.
3) The equity gain since the IPO is also mediocre. Again, they could've easily done better with their money if they were looking for equity growth.

So it begs the question: why haven't sold their stake yet? It's not a good investment. Again, they probably yielded massive returns on the IPO event, but since then, it's a highly mediocre company, so they're not even successful as businessmen right now.

deadbq03 said:

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so they're not even successful as businessmen right now.

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The only answer that makes sense at this point is some modicum of ego. Even if it isn't great (or even good) but just "good enough" there is too much visibility to call a spade a spade in this case and maintain face. Wild ass guess on my part, but that's what I think.

I'm no financial genius (no sarcasm meant here...I'm legit not) but the mere fact they were able to float the club on the stock market was a HUGE windfall for the owners.

According to that Atheltic article I linked to, the Glazers spent about 270 million pounds of their own money in the purchase of the club. The market cap of the stock is nearly $3 billion. That effectively sets the value of the club at a similar value. They've already made 10x their investment. They don't need it to beat the market. They just need it to not devalue. And the dividends, though pretty sucky, are still paid out every year because they prioritize it. And as major stakeholders, it's a significant steady stream of income for them (United paid out over 20 million pounds in dividends this year...not sure how many shares the Glazers hold but I'm sure it's sizable and that's a consistent revenue stream they can pretty much bank on).

So yeah, MANU isn't a world beater on the NYSE. But as long as the share price doesn't dip to $5, they don't need it to be.

Will fans allow any more home games to be played this season? LFC game needs to be rescheduled then there's Leicester on 5/12 and Fulham on 5/19.

Again...not a financial expert, but I very much disagree here. That valuation has really no relevance on their ability to make debt payments (by the way, their debt is about $650 million not $400 million).

It's not a coincidence that Forbes' valuation is almost exactly the same as MANU market cap. In fact, that's part of the reason why they went public. They knew if they were successful it would establish an indisputable (to the market) value on the club. It's also why they will never sell because there's absolutely no one who will pay that kind of money for them.

Market cap has very little relevance when it comes to a company's ability to pay down debt. $650 million in debt has to be serviced. That debt has to be paid, eventually, with real money. The valuation of a company has no direct relation to their ability to make debt payments. If you're valued at $3 billion but have no cash on hand and are losing money annually, you can't point to your market cap to make a payment. You either have to refinance the debt and agree to new terms or cede ownership of a portion of the company to your debtors.

What you should look at when looking at their debt is their cash on hand. That's the only way they can pay down debt without either attracting more debt or selling assets (stocks, players, OT...whatever).

Their cash on hand at the end of every year from 2016-2019 was between $200-300 million. At the end of 2020, it was $50 million...largely due to the pandemic I presume.

Their gross debt at the end of every year has been significantly more than that. By a factor of 2 or 3. Even if that debt has reasonable interest rates on the payments (the first debts they used to purchase the club were > 16%), you're looking at tens of millions of dollars being paid every year just to service debt. You gotta look at the impact of $50 million in payments with $200 million cash in hand. Not $50 million relative to $3 billion. The $3 billion doesn't matter.

So yeah, those debt payments absolutely matter. And they matter even more when you realize that the debt was never invested in the club. That debt was only ever used as a vehicle to purchase the club.

I should clarify/restate and say that it's not so much about their ability to make the payments as much as it is the impact that making those payments has. I don't believe they can't make the payments (yet). But I do believe having the debt is significant regardless of what their valuation is.

I never said the valuation was a pie in the sky number. Just said that if you want to understand the impact of the debt on the club's affairs, the valuation of the club is not that relevant. Relevant for refinancing purposes? Of course. Relevant if they want to acquire new debt? Absolutely. I'm quite positive that if United tries to restructure or obtain additional debt, they'll get more favorable terms and greater access if their valuation is $3 billion rather than $3 million.

Relevant when understanding the impact on the bottom line finances of the club? Not so much. If you want to look at income, United's average net income over the last 5 years is about $7 million per year ($36.4m, $39.2m, $-37.6m, $18.8m, $-23.2m). That's where the payments are felt. Without those debt payment those numbers would easily be what...double? Triple? Quadruple?

And as I said, what is 100% indisputable is that all of that debt, 100% of it, was issued just so that the Glazers could purchase the club. 0% of it was actually invested in the club. 0% of it was made to make the team better. 0% of it was made to make the stadium better or to build a new training ground. 0% of it was used to make the club better. Heck, I might even get on board if they took that debt on so that they could enact a strategy that led to forecast of $50 million of net income per year. But none of that is true. This debt was taken out solely so they could fund the purchase of the club.

Forget about the business semantics for a moment about whether the debt is insignificant/significant due to the club's valuation. I'm all for companies that use debt wisely to invest and grow their business. But that's not at all what happened here. To label the debt as insignificant within that context makes no sense to me.

Dre_00 said:

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I should clarify/restate and say that it's not so much about their ability to make the payments as much as it is the impact that making those payments has. I don't believe they can't make the payments (yet). But I do believe having the debt is significant regardless of what their valuation is.

I never said the valuation was a pie in the sky number. Just said that if you want to understand the impact of the debt on the club's affairs, the valuation of the club is not that relevant. Relevant for refinancing purposes? Of course. Relevant if they want to acquire new debt? Absolutely. I'm quite positive that if United tries to restructure or obtain additional debt, they'll get more favorable terms and greater access if their valuation is $3 billion rather than $3 million.

Relevant when understanding the impact on the bottom line finances of the club? Not so much. If you want to look at income, United's average net income over the last 5 years is about $7 million per year ($36.4m, $39.2m, $-37.6m, $18.8m, $-23.2m). That's where the payments are felt. Without those debt payment those numbers would easily be what...double? Triple? Quadruple?

And as I said, what is 100% indisputable is that all of that debt, 100% of it, was issued just so that the Glazers could purchase the club. 0% of it was actually invested in the club. 0% of it was made to make the team better. 0% of it was made to make the stadium better or to build a new training ground. 0% of it was used to make the club better. Heck, I might even get on board if they took that debt on so that they could enact a strategy that led to forecast of $50 million of net income per year. But none of that is true. This debt was taken out solely so they could fund the purchase of the club.

Forget about the business semantics for a moment about whether the debt is insignificant/significant due to the club's valuation. I'm all for companies that use debt wisely to invest and grow their business. But that's not at all what happened here. To label the debt as insignificant within that context makes no sense to me.

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United have spent the second highest in the EPL over the last 10 years in salaries and player transfers, only second to City.

Saying "net income is" _____ is a bit misleading, as revenues are likely being shared with shareholders before you get to the net number (lessening the number for tax purposes). Look at total revenue and then look through the expenditures and see where the revenue is going.

If United wasn't spending money for players and the debt was growing then it could be a concern but debt was going down before Covid and they are spending money on players.

I get not liking the Glazers, but this isn't the spot where I see that the anger should be placed.

Aston94 said:

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Dre_00 said:

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I should clarify/restate and say that it's not so much about their ability to make the payments as much as it is the impact that making those payments has. I don't believe they can't make the payments (yet). But I do believe having the debt is significant regardless of what their valuation is.

I never said the valuation was a pie in the sky number. Just said that if you want to understand the impact of the debt on the club's affairs, the valuation of the club is not that relevant. Relevant for refinancing purposes? Of course. Relevant if they want to acquire new debt? Absolutely. I'm quite positive that if United tries to restructure or obtain additional debt, they'll get more favorable terms and greater access if their valuation is $3 billion rather than $3 million.

Relevant when understanding the impact on the bottom line finances of the club? Not so much. If you want to look at income, United's average net income over the last 5 years is about $7 million per year ($36.4m, $39.2m, $-37.6m, $18.8m, $-23.2m). That's where the payments are felt. Without those debt payment those numbers would easily be what...double? Triple? Quadruple?

And as I said, what is 100% indisputable is that all of that debt, 100% of it, was issued just so that the Glazers could purchase the club. 0% of it was actually invested in the club. 0% of it was made to make the team better. 0% of it was made to make the stadium better or to build a new training ground. 0% of it was used to make the club better. Heck, I might even get on board if they took that debt on so that they could enact a strategy that led to forecast of $50 million of net income per year. But none of that is true. This debt was taken out solely so they could fund the purchase of the club.

Forget about the business semantics for a moment about whether the debt is insignificant/significant due to the club's valuation. I'm all for companies that use debt wisely to invest and grow their business. But that's not at all what happened here. To label the debt as insignificant within that context makes no sense to me.

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United have spent the second highest in the EPL over the last 10 years in salaries and player transfers, only second to City.

Saying "net income is" _____ is a bit misleading, as revenues are likely being shared with shareholders before you get to the net number (lessening the number for tax purposes). Look at total revenue and then look through the expenditures and see where the revenue is going.

If United wasn't spending money for players and the debt was growing then it could be a concern but debt was going down before Covid and they are spending money on players.

I get not liking the Glazers, but this isn't the spot where I see that the anger should be placed.

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Never understood the defense "they've spent a lot of money on transfers and wages...2nd only to City."

Who cares? Why are they given credit for effectively doing the same thing that the previous owners did? Owners that did it without saddling the club with debt. And owners that spent it much more effectively.

I would have a lot more sympathy for that argument if the Glazers actually created that dynamic. If the Glazers used their financial prowess to exponentially grow United's revenue and take them from a club with little revenue who couldn't compete on salary or transfer fees with the other club to one that could. But that's not what happened. Relatively speaking, United were already one of the largest clubs in the world financially before the Glazers. They were already able to offer the largest wages and pay the largest transfer fees before the Glazers. The Glazers didn't create a better dynamic that allowed United to compete financially for players that they couldn't have done before. The Glazers created a worse dynamic by competing at the same financial level (relatively speaking) as was done before AND added a massive debt that wasn't there before them.

Long term debt was definitely not going down before Covid. Long term debt totals at the end of each FY (which ends in June)

2011: $710.4m
2012: $663.4m
2013: $575.7m
2014: $560.9m
2015: $645.7m
2016: $657.1m
2017: $649.1m
2018: $642.4m
2019: $645.2m
2020: $655.7m

Their long term debt is the single largest liability they have. It makes up nearly 50% of their current liabilities. It's larger than any single asset category. (Sidenote: Goodwill is actually the single largest asset United has.)

During the period outlined above, United have paid more than $500 million in interest payments on that debt. And the debt came with no appreciable (relative) increase in player expenditures. No investment in facilities. Nothing that tangibly improves the club.

Dre

As I have said on EVERY post I have made on this, you can not like the Glazers for a myriad of reasons, but the debt load is to me is not one of them.

Your numbers show a decrease in debt from 2011 to 2020, so yes it did decrease. The point being they were not constantly saddling the team with more and more debt.

And you don't get the argument that they were spending second most in the EPL? Really? It shows they are committed to keeping a highly competitive club on the field.

Now has that always been money well spent? No, but they have been willing to open the pocket books.

And, using your numbers, paying $50 million in debt service per year on a company worth $3.05B is just not a high number. It just isn't.

Let me say this another way, I don't like many of the things they have done, but the debt is not holding the club back from doing great things.

Nailed it.

I'll leave it alone. You're not going to convince me I'm wrong and I'm not going to convince you you're wrong.

Dre_00 said:

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I'll leave it alone. You're not going to convince me I'm wrong and I'm not going to convince you you're wrong.

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All good. But I am right.

It is fine to discuss and look at different points of view. I just think this is an interesting discussion to have now when they arguably have put together the best product they have had on the field since the early 2000s.

Future is bright for the club, just an interesting time to demand a change in ownership.

Since Dre posted the debt load by year I'll add the other half of the equation and that's revenue by year.
The huge jump in 2015-17 was TV contract money I believe. The drop in 2020 was loss of ticket revenue due to COVID.

2010 $376MM
2011 $435MM
2012 $421MM
2013 $477MM
2014 $570MM
2015 $520MM
2016 $678MM
2017 $764MM
2018 $776MM
2019 $796MM
2020 $630MM

Two things stand out to me. First, their debt load per year was pretty constant. They weren't adding debt but it wasn't being paid off either. So effectively interest only payments. Second it wasn't until the last TV contract that revenue exceeded debt. I get that debt isn't necessary bad. Hell, Apple is the richest company in the world and generates so much cash they can't really spend it and they borrow all the time because it's cheaper to borrow it than loose the interest on the invested cash they have. But if they had to pay the debt on a call I wonder if they could.

I'll see if I can find profit numbers later. They should be published since they are a public company. The profit to debt ratio would tell the story.

Not sure if this is behind the paywall but if you're interested...

https://seekingalpha.com/symbol/MANU/

Let's just say if the Glazes ever do sell, I hope they don't sell to you.

Dre_00 said:

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Let's just say if the Glazes ever do sell, I hope they don't sell to you.

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Lord, I hope they do!!!!! Would love to have 3-4 B just sitting around! Lol.


If I do take over United I will bring you on a my financial guru!

Mathguy64 said:

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Since Dre posted the debt load by year I'll add the other half of the equation and that's revenue by year.
The huge jump in 2015-17 was TV contract money I believe. The drop in 2020 was loss of ticket revenue due to COVID.

2010 $376MM
2011 $435MM
2012 $421MM
2013 $477MM
2014 $570MM
2015 $520MM
2016 $678MM
2017 $764MM
2018 $776MM
2019 $796MM
2020 $630MM

Two things stand out to me. First, their debt load per year was pretty constant. They weren't adding debt but it wasn't being paid off either. So effectively interest only payments. Second it wasn't until the last TV contract that revenue exceeded debt. I get that debt isn't necessary bad. Hell, Apple is the richest company in the world and generates so much cash they can't really spend it and they borrow all the time because it's cheaper to borrow it than loose the interest on the invested cash they have. But if they had to pay the debt on a call I wonder if they could.

I'll see if I can find profit numbers later. They should be published since they are a public company. The profit to debt ratio would tell the story.

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Thanks for sharing. I have bolded a few items for discussion.

I think, if you ignore Covid and assume a return to normalcy, the $800M revenue amount is a very reasonable number to expect for annual revenues going forward.

Using Dre's numbers, $50M in annual debt servicing on an $800M revenue stream is really not a high number. Applying 6.5% of annual revenue toward debt service is really not a bad number at all for a company, very manageable.

Regarding not paying down the original debt, I am not sure what the terms of their debt are, but I assume, like most debt, there is an amortization of the borrowed amounts where the first few years the bulk of payments are going towards interest.

Revenue exceeding debt is an interesting way to look at it, but really it is revenue exceeding debt service that is the concern, and as mentioned above, they are really in good shape there.

Would I prefer that the club have zero debt? Of course, but the amounts of debt are not, in my opinion, an impingement on operations and I think the spending at the club over the last 10-15 years has shown that to be true.