Manchester United: The Debt burden

Man Utd considers £600m bond issue to refinance debts

Manchester United is considering refinancing its massive debts by raising up to £600m through a bond issue.

The football club has appointed JP Morgan and Deutsche Bank, according to sources, to look at options for its debts, which stand at around £700m.
Manchester United, whose revenues are among the largest in the sporting world, was left laden with debt after a controversial £790m takeover by American tycoon Malcolm Glazer and his family in 2005.
 
The takeover provoked hostility among fans, who were angered by Manchester United falling under foreign ownership and one of the world's richest football clubs being burdened with hundreds of millions of debt.

The club has always insisted the debt is manageable because its operating profits, which were £72m in 2008, covers its annual interest payments, £69m in 2008.

However, the debt includes £175m of payment in kind (Pik) loans that are rolling up interest at a rate of 14.25pc a year. The loan, for which the Glazer family, rather than the football club, is ultimately responsible, was initially worth just over £130m and is from two American hedge funds, Perry Capital and Citadel.

The remaining loans, which are secured against the club, are worth £519m, with an average life of just over seven years.

The Glazers pushed through a refinancing of the debt in 2006, which was aimed at making the funding more long term. However, the squeezing of available credit since then has made refinancings difficult and potentially more expensive for companies, although there is no immediate pressure for Manchester United to consider such measures.

The owners of Liverpool, Americans George Gillett and Tom Hicks, underwent lengthy negotiations with Wachovia and Royal Bank of Scotland before they secured a £350m deal last summer.
A spokesman for Manchester United declined to comment.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6928627/Man-Utd-considers-600m-bond-issue-to-refinance-debts.html?

Premiership clubs and debts!

Premiership clubs and foreign ownership that straddle clubs with more debts!

One thing in common, we are both owned by yanks! (sorry to our american friends)

The similarity here is that the owners of both clubs know absolutely F**k all about the game of football the respective clubs' history and traditions and look upon their charges as nothing more than security in acquiring monies from financial institutions.

I know this sounds a little outlandish given the rivalries, but it would be fantastic if both UTD and Liverpool fans could organise a mass demonstration against both sets of Yank owners at Old Toilet on the 20th march, can you imagine a full house there giving both sets of Owners a clear and visual sign that they are not wanted here.

I know this sounds a little outlandish given the rivalries, but it would be fantastic if both UTD and Liverpool fans could organise a mass demonstration against both sets of Yank owners at Old Toilet on the 20th march, can you imagine a full house there giving both sets of Owners a clear and visual sign that they are not wanted here.

Very interesting idea that.

However, given the intense rivalry between the two groups of supporters, it's almost impossible to see them organising something on this scale.

This does raise another issue, though, when we consider the level of debt both clubs are in: is the history of rivalry, dispute and (sad to say) hatred between the two groups more important than the survival of the clubs themselves?

I wonder what SOS would say if someone raised this point and asked them to make the first steps? Especially when that video was released showing them chanting about Munich at one of the meetings. I know they chant about us week in, week out, but it's all about priorities, and my personal opinion is that if this can help raise awareness for the protests then it would be a good thing.

It's just hard to imagine a bigger stage for the protest, I can't imagine the number of people watching the match across the globe, it's one of the biggest footballing fixtures around.

It's just hard to imagine a bigger stage for the protest.

Exactly Ayrton and it would be sending out the message loud and clear.

I still don't understand how it is even legal for the clubs themselves to end up saddled with debt in this way. I've bought and sold businesses, even without a penny of my own cash going into the deal, but I've always been on the hook for the debt. Sure, I've had the business pay me enough so that I can repay the loans but I never could see a way of just saying "the debt belongs to the business".

I guess I'm just not smart enough.

That said, it seems clear to me that rules of ownership of football clubs have to change to stop this nonsense. It really gets my goat the way our mercenary pr**k owners not only load us up with debt but they also rape us for outlandish expenses whenever they deign to show up for a game.

Damn...getting wound up now. F***ing American owners, eh?

I see Platini is planning to introduce a champs lge rule where if the club operates at a loss for 3 years then it cant enter the champs lge.. maybe this will shake these guys up!!

How the F**k where the Glaziers and our clowns allowed buy Premiership clubs with bank money which they saddled onto the clubs. Where the F**k was the Premier League stopping this. It is a F***ing disgrace this was allowed to happen.

even better news the mancs are trying to sell 500m of bonds to put off repaying their debts. Best news ive had all day

What difference will selling 500m of bonds make to Untd ?

Glazer family takes £20m in fees & loans from Manchester United

http://www.guardian.co.uk/football/2010/jan/12/manchester-united-finances-glazer-family

• Six members of family revealed to have borrowed from club
• David Conn: How the Glazers have milked United for millions

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.

Another set of scumbags. No love lost on utd but the likes of our 2 muppetts and these other yanks at utd are killing football with greed. Hate the way the game is gone money hungry fookers killing clubs

Another set of scumbags. No love lost on utd but the likes of our 2 muppetts and these other yanks at utd are killing football with greed. Hate the way the game is gone money hungry fookers killing clubs

There's only one thing keeping the them afloat and that's the support base of the Mancs and our own, F***ing parasites of the first order.

I said it before and I'll say it again a mass demonstration should be arranged by both sets of fans in a show of unity against both sets of Owners for the show down on March the 20th, if that means invading RedCafe and Rawk to get things going then so be it.

There is no bigger show piece to get our points across and if both sets of fans in the crow had a Murielle in a similar way as to what had Sami had when leaving stating Yanks out in all four sides of the ground for the duration of the game, whilst its beamed across the world, it would surely make headlines around the globe.

So lets put our rivalries to one side for one game and show some Unity in forcing these leeches out.

I said it before and I'll say it again a mass demonstration should be arranged by both sets of fans in a show of unity against both sets of Owners for the show down on March the 20th, if that means invading RedCafe and Rawk to get things going then so be it.

There is no bigger show piece to get our points across and if both sets of fans in the crow had a Murielle in a similar way as to what had Sami had when leaving stating Yanks out in all four sides of the ground for the duration of the game, whilst its beamed across the world, it would surely make headlines around the globe.

So lets put our rivalries to one side for one game and show some Unity in forcing these leeches out.

Would never happen, they'd rather spend the whole game singing murderers to us!

Would never happen, they'd rather spend the whole game singing murderers to us!

As Rafa would say "Possibilities" if the possibility of it is there I'm sure something could be arranged it would be just getting the message across and adhering to it.

I said it before and I'll say it again a mass demonstration should be arranged by both sets of fans in a show of unity against both sets of Owners for the show down on March the 20th, if that means invading RedCafe and Rawk to get things going then so be it.

Just won't happen.  More likely to see the Israeli's on the West Bank inviting the Palestinians in for a cuppa.

Just won't happen.  More likely to see the Israeli's on the West Bank inviting the Palestinians in for a cuppa.

Especially when the mancs have their mates in the press doing hatchet jobs on us!

If the Fiver was forced to apologise and resign every time we sent an ill-advised email to recipients who found them objectionable, production of the world's most tea-timely newsletter would have ceased moments after its maiden excursion more years ago than we care to remember. Luckily, our audience is more tolerant than Liverpool supporters' union Spirit of Shankly, who showcased the fabled Scouse sense of humour by swooning like Victorian ladies overcome by the vapours when a board member from "their" club responded to a series of emails from a disgruntled fan by inviting him to "Blow me, ****face".

The carefully worded email sent by Tom Hicks Jr, Dallas-based businessman and adult son of Liverpool owner Tom Sr, prompted howls of faux outrage and wounded indignation from Spirit of Shankly, who despite all their protestations to the contrary, were almost certainly beside themselves with delight that a fan had managed to prompt such a juvenile response from the Liverpool boardroom.

Having called for, and subsequently secured the resignation of Hicks Jr, who has since apologised for sending the email, SoS posted a statement on their website this afternoon. "Spirit of Shankly welcomes the resignation of Tom Hicks Junior from the board of Liverpool FC and its parent company," it chirruped. "This club has standards – on the field, off the field, on the terraces and in the boardroom." As luck would have it, the group made no mention of its own standards, which are so low that last year's end-of-season party climaxed with this rousing ditty making fun of the Munich air disaster.

While it could be argued that the raucous, mob-handed celebration of a plane crash in which 21 people died is considerably more offensive than some dumb Yank losing his rag and sending a chippy email, it's interesting that SoS chose not to disband or call for mass resignations from among their own rank-and-file in the wake of the notorious sing-along.

The Fiver is as wholeheartedly in favour of football fans sticking it to The Man as the next beret-wearing promoter of people-power, but we find it bewildering that the high standards expected from all connected with Liverpool FC "on the field, off the field, on the terraces and in the boardroom" evidently don't apply to those most anxious to see them rigidly enforced

As I've said before you might as well go the whole hog and rebrand the Guardian as the Manchester Daily News. Even more interesting is the fact the above piece had a link to the you tube vid so they can show even more fake outrage.

My question would be where is all this outrage when Utd's ahem faithful sing murderers at us every season at Old Trafford? Where's this outrage when you tube vids are uploaded of last seasons 4-1 when you've got some beaut in a Utd shirt banging the front of an upper tier stand encouraging the rest of the supporters to join in with him singing that song?

Where's the press outrage when Utd's own PLAYERS are singing "Without killing anyone we've won it three times" right in front of the TV cameras in Moscow.

I'd rather we stuck to getting shut of our own owners without their help thanks.

To be fair, I said at the time that heads should have rolled at the SOS for that event.

However, I am not a member for my own reasons and therefore Spirit of Shankly do not represent my own views. I do my own 'reprazenting'.

The Guardian would be well minded to consider that the SOS has a membership running in to the hundreds/low thousands.  The number of Liverpool fans around the globe who were sickened by both events runs in to the millions.

Its actually a top idea for getting our message across. The catch would be for the fans to say to themselves they are in this together for the future of their clubs. Do utd hate us more then they love themselves and vice versa?

I know this sounds a little outlandish given the rivalries, but it would be fantastic if both UTD and Liverpool fans could organise a mass demonstration against both sets of Yank owners at Old Toilet on the 20th march, can you imagine a full house there giving both sets of Owners a clear and visual sign that they are not wanted here.

Sounds good on face value. However, i don't think its got to the stage we hate our owners as much as yours yet!!. I agree there doing nothing to give us much confidence  United look bad on the pitch and like Liverpool, need to invest. I would love to get together with some of the supporters on this forum just so i could put face's to names  . Some of you sound a really good bunch of lads 

JEEZE LOUISE

Manchester United debt hits £716m

Debts at the parent company of Manchester United have increased to £716.5m ($1.17bn), according to its latest accounts.

The company, called Red Football Joint Venture, is owned by the Glazer family and secures its debts against the football club.

The accounts, for the year to June 2009, show United's debts passing £700m for the first time.

More than £68m was paid in interest alone, the accounts show.

Despite the debts, the club turned a profit of £6.4m for the year - a marked improvement on the £47m loss reported at the end of the 2007/08 season.

The accounts also show that player sales brought in a profit of £80.7m - the price paid by Real Madrid for Cristiano Ronaldo in the summer.

The increased size of Manchester United's debts, and the amount of money being used to pay interest on them, are likely to concern fans.

Earlier this year, the Glazer family, which has controlled Manchester United since 2005, announced plans for a £500m bond issue designed to reduce debt repayments.