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United hit by £58m losses last year. Updated.

by david Conn
http://www.guardian.co.uk/football/2008/may/06/manchesterunited.premierleague?gusrc=rss&feed=sport


With Manchester United powering to a probable second successive Premier League title and ready for a Champions League final, it appears that life at Old Trafford could hardly be rosier, but the club's accounts, now published in full, detail a significantly bleaker picture of the club's finances under the ownership of the Florida-based Glazer family.

Before the family's 2005 takeover, United prided itself on being the only Premier League club regularly to make a significant profit, to have cash in the bank and, unlike all the others, no debts. After the leveraged takeover, the Glazer family loaded their borrowings on to the club and the position has changed. The accounts for the company that the Glazers use to own United show total borrowings, in the year to June 30 2007, were up to £666m, by far the highest of any English football club, ever. The total owed to all creditors, including the banks, was up to £764m and includes £56m that United owe to other clubs in transfer fee instalments on players Sir Alex Ferguson has signed.

The total interest payable by the club on its borrowings was £81m, although only £42m was actually paid. The rest, which accrued on the millions owed to hedge funds, is allowed to roll up until the whole amount has to be repaid in 2016, or, alternatively, until the Glazers can refinance it. A total of £152m is currently owed to hedge funds, at 14.25% interest a year - £22m from 2007-08. Last year the Glazers tried to refinance but were unable to strike a deal with financial institutions, and a spokesman acknowledged that the credit crunch is making it more difficult now.

David Gill, United's chief executive, announced the headline results back in January, stressing that United's phenomenal money-making power, with 76,000 crowding into Old Trafford and the Premier League's huge TV rights deals, had produced record income of £210m and operating profits of £75m. The full accounts show, however, that even though United made a further £11m profit from buying and selling players, the interest and other accounting provisions pushed United into recording an overall loss of £58m.

The accounts also reveal that by far the highest proportion of income, £92.5m, is still generated on home match days, and although the club has announced more modest ticket price rises for next season than for the previous two, supporters groups continue to protest that they are paying the debts of a takeover they opposed. "It is outrageous that supporters are paying the huge interest on these borrowings, which are worrying for the club's future," said Sean Bones of the Manchester United Supporters Trust. "Our money is pouring out to pay the Glazers, while they have not put a penny into the club."

The spokesman for the Glazer family pointed to the club's success on the field, and in generating income off it, as evidence of the family's competent management. "The family continue to run United as a business," he said. "Their model is to encourage success on the pitch by backing Sir Alex Ferguson, and to grow revenues off it. The interest payments are more than covered by the cash generated."
 

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what a shame. so much money went to pay the interests each yr instead of using it for new arrivals. hope tt the glazers will not ruin united.
 

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The whole world revolves around debt and credit...i just can't wait till we get rid of it all! Imagine how much money we will have then :)
 

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This is a potential minefield of a subject ... :eek:

To the guys who posted above ... and any others
considering making a post ... I would recommend
you make sure you understand all the facts involved ...
or you could very well upset a lot of 'Old Timers' who
have followed United for many, many years.

Of course, we must accept 'freedom of speech' etc etc,
but at the same time I would like to keep the peace.

I've made the mistake of commenting on this subject a
few times and regretted it, lol...oops. Got told off big
time ... :eek:

I thought I knew more than I did ... and I made a few
people get mad as hell.

Just a friendly warning ... before you throw yourselves
to the lions ... :eek:
 

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carlyluvsunited said:
This is a potential minefield of a subject ... :eek:

To the guys who posted above ... and any others
considering making a post ... I would recommend
you make sure you understand all the facts involved ...
or you could very well upset a lot of 'Old Timers' who
have followed United for many, many years.

Of course, we must accept 'freedom of speech' etc etc,
but at the same time I would like to keep the peace.

I've made the mistake of commenting on this subject a
few times and regretted it, lol...oops. Got told off big
time ... :eek:

I thought I knew more than I did ... and I made a few
people get mad as hell.

Just a friendly warning ... before you throw yourselves
to the lions ... :eek:

One of the reason's why i Quoted

The whole world is in debt nothing to worry about, paper talk nothing more
 

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well, when the glazers took over tampa bay, they increased the club value by more than doulbe while reducing debt levels to about 10-15% of club value. If they can do the same with MUFc, get our value to £2billion, then i'd certianly not mind seeing debt levels of 10-15%. 2016 the debt may get paid off and we'll be left with large profit margins..

We all contribute to the club via sky anyway. Well, i go down the pub and buy a couple of pints actually, but ne'er the lessthe auld boys have a different argument, one of ethics and morality. If we look at something more tangible like finance - then i thinks things aren't that bad. It's still early days yet anyway, i'm sure we'll be making net profits before too long. And to be fair, i'd not mind paying the glazers pockets (is there any evidence that they have withdrawn money for their other personal affairs?) so long as we do a good summer of recruiting and squad strengthning. It's silverstuff that counts at the end of the day doesn't it?
:)
 

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carlyluvsunited said:
This is a potential minefield of a subject ... :eek:

To the guys who posted above ... and any others
considering making a post ... I would recommend
you make sure you understand all the facts involved ...
or you could very well upset a lot of 'Old Timers' who
have followed United for many, many years.

Of course, we must accept 'freedom of speech' etc etc,
but at the same time I would like to keep the peace.

I've made the mistake of commenting on this subject a
few times and regretted it, lol...oops. Got told off big
time ... :eek:

I thought I knew more than I did ... and I made a few
people get mad as hell.

Just a friendly warning ... before you throw yourselves
to the lions ... :eek:
people need to do alot of reading into this to make sure they are making informed posts.
or like carly has said peace will be a problem.
search the glazers in the search tool of the forum...
 

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Discussion Starter #11
pass_me_a_rizla said:
. And to be fair, i'd not mind paying the glazers pockets (is there any evidence that they have withdrawn money for their other personal affairs?) so long as we do a good summer of recruiting and squad strengthning. It's silverstuff that counts at the end of the day doesn't it?
:)

Actually, they had a very good summer the year before last when they sold v. Nistelrooy and bought Carrick. The team then won the league against most people's expectation. Last season really was beautiful.

They then went on a buying spree, spending 50mil on Nani, Anderson and Hargo+ some 6mil in loans for tevez(that';s just the initial loan, not counting his salary that people like to quote).

So if I were them, I would strengthen a bit this summer, but way less than last summer and ask the manager to how that the money was well-spent.

We cannot hope to finance the debt, if we spend every summer like we did last year.
 

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RedForceRising said:

They then went on a buying spree, spending 50mil
on Nani, Anderson and Hargo+ some 6mil in loans
for tevez(that';s just the initial loan, not counting
his salary that people like to quote).


We cannot hope to finance the debt, if we spend
every summer like we did last year.[/b]
RedForceRising said:

and includes £56m that United owe to other clubs
in transfer fee instalments on players Sir Alex Ferguson
has signed.
Don't forget that last summers signings have still to be paid for !!!!
 

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Installments have to be paid for, yes. I think that was the sweetener, a slighlty higher fee but spread out payments over 3/4 years. Also i do believe the Hargreaves money was already there from last summers transfer budget, accounted foor. and sew, we'll just add more debt to the club and get some weeley good twansfew targets while we will also sell some of our young but not able to make the breakthrough at united boys. should raise 10m from them voer this summer and reduce the wage bill significantly.

im going back to sleep. nght x
 

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Discussion Starter #14
carlyluvsunited said:
Don't forget that last summers signings have still to be paid for !!!!
That's absolutely true, those figures were up to June 30 2007. So we made a loss of 58millions Pounds in that fiscal year and then compounded it by spending 56mil++ on the new signings.

i'm not even going to start calculating the compounded interest, I'll leave that to you, but we started this fiscal year at least 114++ mil in the red.

If we take Gill's announcment that the operating profit was 75mill as the same for this year, we are going to be another 40 mil short this summer.

I just cannot see how we are going to continue shopping and service the debt at the same time.
 
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David Conn is very clued up on Uniteds finances
and writes a lot of very good truthfull articles giving
all the facts and figures to back up his writtings.
He is one of the few who says things exactly as they are.

It's worth doing a search for more of his articles if you
want more information.
.
 

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Discussion Starter #16
SALFORD RED said:
David Conn is very clued up on Uniteds finances
and writes a lot of very good truthfull articles giving
all the facts and figures to back up his writtings.
He is one of the few who says things exactly as they are.

It's worth doing a search for more of his articles if you
want more information.
.

Thanks for the info, Sal!

I will be searching for some other articles by him. It's one of the things that really have me concerned. All the talk about Fergie and his tactics sort of melt away in the sobering, glaring light of the serous state our finances are in.
 
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RedForceRising said:
Thanks for the info, Sal!

I will be searching for some other articles by him. It's one of the things that really have me concerned. All the talk about Fergie and his tactics sort of melt away in the sobering, glaring light of the serous state our finances are in.
I should have said that he is clued up about
the financial side of football, not just United.
His views and understanding of the real state of
football today is really an eye-opener to lots of fans.

Here's you go mate.
Only 35,000 references to search.:eek: :D
http://www.google.co.uk/search?hl=en&q="david+conn"&meta=
 

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:eek: so lets ride the wave of glory till the bubble bursts or doesnt as the case may be . whats the worst that could happen ? ------- who said leeds ?:D
 

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This is my first post on this subject (on this forum.) So won't go into great detail with my opinions on the subject. I was massivley opposed to the Glazer's coming. Went to The Apollo with Shareholders United (now MUST) so bin/skip some Nike/United wear.

This business can only be a going concern if United win a major trophy EVERY season, and reach the 1/4 finals of the CL, and finish in the top 3 of the league, for the next 10-15 seasons. Notice how I said 10-15 seasons, thats how long it is going to take to pay this interest off. Now, obviously, we've not seen, and most fans wouldn't look at, the annual report for the company which owns Manchester United, for 2008, as the year end isn't until June, so you're looking around August/September before meaningful figures coem out, but I'd argue that figures look more bleak than they did in 2007. The interest is pile-ing up at a higher rate than what we are actually paying. Not good. Imagine this with a simple term of your high street store card. Let alone the capital? This still has to be repaid? How are they hoping this will happen? On a serious note. There was talk of sale/leaseback of OT. Selling the ground rights.

All contentious issues, none of which has happened yet, and most fans are happy with this, espeically with the onfield success, so we're fine, right? No. I think Faz said "they wouldnt take over to go out of business" and thats quite right, but what are they here for? Someone else asked about personal gainings from the club. The ownership is quite complex, and to discover the dividends would be quite an effort, although if your that interested, go for it. I'd say they must be taking a fair dividend out of the club. More tax efficient than a salary for one. And you'll easily find salary figures in published accounts also, if you're looking for that sort of info.
 
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