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Our Debt

Discussion in 'Manchester United' started by cytrax, May 31, 2017.

  1. cytrax

    cytrax Well-Known Member

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    #1
  2. Red Hadron Collider

    Red Hadron Collider The Hammerhead

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  3. glazerfodder

    glazerfodder Well-Known Member

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    The majority of our debt is raised in dollars in the US financial markets and has seen a 27% increase simply because of the collapse of the £GBP against the $US since 'Brexit' - in effect, the debt has stood still but currency fluctuations have seen it increase. For that same period the club's operating profits increased, coincidentally, in almost equal proportion, effectively 'wiping-out' the debt increase. If currency fluctuations ease in the coming years the debt will decrease in real terms and our profits will become just that - real profit, rather than simply balancing the debt as at present.
     
    #3
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  4. cytrax

    cytrax Well-Known Member

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    I'm probably going to follow this up and read our financial reports given we are a public company. But the most significant item there that you mentioned is the exchange rate which has been very volatile since Brexit.
     
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  5. The RDBD

    The RDBD Well-Known Member

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    So prior to the Leave result, what has been the Glazers'
    typical/average annual debt repayment sum ??

    All that matters from their side is that they are making decent
    inroads into the total debt every year.
     
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  6. cytrax

    cytrax Well-Known Member

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    It sounds more like they use the club to enrich their pocket before considering paying the debt. Given how much we've made over the years, that debt should be way lower than what it is.
     
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  7. cytrax

    cytrax Well-Known Member

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    Top 10 clubs by debt
    1. Manchester United - €536m

    2. Benfica - €336m

    3. Inter - €306m

    4. Valencia - €285m

    5. QPR - €279m

    6. AC Milan - €249m

    7. CSKA Moscow - €224m

    8. Galatasaray - €222m

    9. Juventus - €209m

    10. Roma - €208m

    http://www.independent.co.uk/news/m...all-landscape-qpr-glazer-family-a7523761.html

    Glazers have basically made no fukin attempts to repay the debt. It's been 12 years since they took over. Surely we've made more than €50 in profit/year to have way lower debt.
     
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  8. glazerfodder

    glazerfodder Well-Known Member

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    Sadly, in the Glazer's eyes, the club is no more than an appreciating asset that they borrowed money to buy. No different than you or I getting a mortgage to buy a house - while we pay off our debt, there is a good chance the value of the house will go up and at the end of the term (or before then if someone steps in and wants to buy), when we sell up, we get a nice profit. If someone came along and offered £1.5 billion for the club right now the Glazers would sell in a flash - they would repay their debt - but that repayment would come out of the vast profit they had made, so no real cost to them. If they simply paid off the debt from the operating profits per annum it would effectively reduce the profitability (value) of the club.
     
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  9. cytrax

    cytrax Well-Known Member

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    But the profit that we makes goes directly into their coffers. I don't see how diverting some of that profit to the debt would reduce our profitability. It's not dilutive to pay down the debt. If anything, it would allow them to start building solid balanced sheets. If they weren't such greedy dks, they probably would have had sizable amount paid off without impacting profitability.
     
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  10. theevilreddevil

    theevilreddevil Well-Known Member

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    I like it when other clubs fans cry wondering how we can spend all this money on players and not breaking FFP rules because they don't understand the debt and refuse to accept as a club we are debt free. They like to believe we are in debt because we over spend on players:azn:<laugh><laugh>
     
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  11. The RDBD

    The RDBD Well-Known Member

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    What is there to not understand ??
    The Glazers are in debt, not Man Utd FC.

    The only on-paper danger is if the creditors call the debt in,
    and the Glazers asset-strip the club (sell key players etc)
    to repay their debts (to avoid selling any of their existing stake) .
     
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  12. glazerfodder

    glazerfodder Well-Known Member

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    In which case they sell the club ................ win win for us.
     
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  13. King Shergar

    King Shergar Well-Known Member

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    Whilst we have still won trophys under the Glazers, I've always felt it is despite them, rather than because of them. I think we would be in a much better place now if it wasn't for them.

    It always bugs me that Fergies last 7-8 years he was never given the money to spend that the very top clubs where given. Although he still managed to win a lot, he'd of completely dominated Europe IMO if he had the mega transfer budgets other teams had.
     
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  14. cytrax

    cytrax Well-Known Member

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    That is what pisses me off. They literally robbed the club through those years and bragged about the success. If we didn't spend any decent money through those years and winning with Cleverley and Fletcher in the middle of the part, what the heck did they do with the money?
     
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  15. Swarbs

    Swarbs Well-Known Member
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    They paid the debt down. It went from around $900 million after they first bought us to around $600 million today. The money was there for SAF if he wanted and needed it, but he chose not to - he was always the one to declare there was no value in the market and he could compete for the PL with the players he had. And he always did.

    It's only since his retirement and we've moved on to lesser managers who need to spend hundreds of millions each season just to get into the CL that the debt has stopped falling. Net cash spend on transfers has been around £100 million a year for each of the last three years. Would you rather the cash we generated went to paying off the Glazer's debt rather than being available to the manager?

    We paid £13 million in interest last year after refinancing the debt, it is a drop in the ocean compared to our £500 million plus in revenue. So whilst the debt is a bit of a worry, it has no impact on our ability to sign players.
     
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  16. The RDBD

    The RDBD Well-Known Member

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    The Glazers are trying to do both (funds available to ensure the
    club maintains/increases its on-pitch success while using some of the
    available annual profits to reduce their total debt) .

    Maintain the "virtuous" circle, and preventing the "vicious" circle arising.
     
    #16
  17. King Shergar

    King Shergar Well-Known Member

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    I think if the Glazers hadn't taken over though Fergie would have spent more. He was just looking after the best interests of the club, by saving the money and making do with the players he had. As he was obviously aware of the debt himself.

    The managers we've had since don't have the same affiliation with the club as Fergie had, so they are quite happy to throw loads of money at it rather than repay the debt. They aren't as bothered about the long term future of the club in the same way Fergie was.

    Especially after Ronaldo left, we really didn't spend the money to compete, and it was only down to Fergie's clever tactics, and his man management of being able to make average players play out of their skin, that we still won the PL.

    This is why everything came crashing down after he left, David Moyes or any other manager for that matter was guaranteed to have a nightmare first season. As no one else could get Fergies players to play the way he could.
     
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  18. Chief

    Chief Northern Simpleton
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    This is where we've always disagreed. I don't think he had as much money to spend as he should have an he was definitely restricted. The purse strings were clipped and he toed the line.

    He did it very well but the knock on effect was the squad he left behind, which was inadequate. If you believe the common consensus he did it on purpose to make himself look good, which is patently ludicrous.
     
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  19. King Shergar

    King Shergar Well-Known Member

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    Do you think it is the same with Arsene Wenger? As it seems to be a thing with these long term managers apparently looking after the clubs finances, and refusing to spend the cash when it is there to spend.

    Fergie was never shy to spend money during other periods of his time as manager. So I tend to agree with you that he was either toeing the line, or he was concerned about the debt so didn't spend.
     
    #19
  20. Tel (they/them)

    Tel (they/them) Sucky’s Bailiff

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    I think the emphasis has been on building the brand since the Glazers arrived. The kit deals and sponsor deals we're pulling in now are unheard of. If the club had focused on reducing it's debt, perhaps it wouldn't have seen such significant growth.

    If United repaid big chunks off that debt regularly, then perhaps fans would moan that the club is more concerned with paying the Glazer's bills than it is trading players etc.
     
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