[funkdoctorspock]

Whats the real story. United are turning in record profits or United are losing money under Glazer's rule?

I simply don't understand how top different monetary reports can come out in less than 3 months.

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."

Football: United play for the double on back of £58m losses last year | Football | The Guardian

[ViSh23]

For me this things is becomig bad... i dont like that much... united was okay before glazer took the club, they need nothing.. there was no borrows or whatever things that could put the club to financial problems.. but with that glazer :@, it seems that years coming united will have problems...

Thats not fair, i cant even imagine one day united suffering for money!!!!!!

But there was a topic here itself that showed united was first in the list, about richest club in the world, with profits and so on.... me too i dont know whats happening here!!!

Glazer is using united fans for there own benefit... Rising the ticket prize!!!
Hop the Fans dont go there only for some top club clashes...

OT will not have biggest crowd.. they dont even care about that (glazer family)

Between what does they really except while they have bought United??? what they want to show or to prove!! :@

[simpsom]

oh my god!!i thought man utd have always been earning money!!just know that man utd actually are in debt.what will Glazer get anayway..the club always in debt because of him.
and worse of all,the supporter need to pay for that!!

[GocartMozart]

this is annoying. there's way too much uncertainty giong on here, and all it takes is a look at their audited statements. I'd love to have a look because I honestly don't trust the Guardian to read financial statements.

As far as the concept of the fans complaining about ticket prices, when I had to buy tickets I was also bothered by the pricing scheme, but not so much by the actual cost. 33 pounds for a great seat in the west end was brilliant and is far cheeper than to get a good seat to a Yankees, Giants or Knicks game, which requires I hand over my first born. The problem with the United scheme is that there are too many moving parts. This One United membership and all this shite is rubbish. If you want an extra 20 pounds a year, just raise my ticket price half a pound per match and get on with it. The reason they do it is because they want to get those 40 pounds from more than just the 76k that sit in the seats, but it's still uneeded.

The other thing that bothers me about this is that the fans really shouldn't be complaining in the first place. Yes it's your club, but if you don't' want to pay, don't go. It's quite simple. You have FC United. You want success, you want big name players, you want to act like the king of all club football, but to do that takes money. now these are the same people who sold their shares to Glazer in the first place. He didn't get to 28% control by not ptuting up his own money, and he definitely didn't do it by stealing the shares. If you sold them, it's your own fault that he's now fleasing you.

Finally this concept of Glazer not putting in his own money and having the cost of the debt be placed on the backs of the fans. It's spot on, but that's life. It's a business, and if I made an investment and needed to cover my loan payments, you sure as hell know I'll be raising my prices as well. That's the nature of how the world works. You're just lucky that we got the Glazers and the not Gilette and Hicks, or worse, that Thai pimp.

[TeKnIcIaN]

I'm not going to worry about this too much. First off, these statements are supposedly for last year (ending June, 2007) and people do restructuring financially - I seem to remember something about the Glazers doing this last year, even though they didn't actually refinance but I thought they "restructured" a bit. Even with these supposed losses, we still spent something over 65,000,000 pounds on new signings last year.

The only other reference I could find to the financial situation outside the Guardian paints a somewhat different picture. It says there was a £58m net loss last year, but that is improved over the £135m from the previous year.

PROFITS AND INTEREST COSTS RISE FOR GLAZERS – 4/5/08

The holding company that owns Manchester United saw both its interest costs and pre-tax profits rise last year, according to results the owners said represented a more stable financial footing. Red Football Joint Venture's interest on bank loans and overdrafts it refinanced in August 2006 was £42m for the 12 months to 30 June last year, compared with £27.2m for the previous 14 months. Earnings before interest, tax, depreciation and amortisation rose from £36.3m to £75.4m. Operating profit moved into the black reaching £7.1m following a loss of £37.2m. The overall loss for 2006-7 was £57.8m, smaller than the previous period's £135m. Net debt for the company owned by the Glazer Family rose from £603m to £666m. But that includes one-off costs for redeeming high-interest loans. However, had earnings been the same as 2006, the company would have fallen £6m short of covering its interest payment. A spokesman for the Glazers rejected suggestions this showed a vulnerability for a company reliant on the team's on-field success, which although it is currently being maintained, cannot be guaranteed.

Confidence was partly based on the sponsorship deal with AIG worth £18m a year over five years and another with Nike that will bring in £303m in the next 13 years. Gate receipts from the expanded stadium rose 28 per cent to £96.2m. Receipts from television and other media rose from £46m to £61.5m.

FootballEconomy.com

The thing that gives me the most peace of mind is that United is currently valued at something like £1.2 billion. In the worst case scenario, it would be fairly easy to find someone willing to invest for a stake in the club should the Glazers need bailing out.

Nevertheless, after a highly financed financial venture like the takeover of United by the Glazers, this kind of debt situation is to be expected. Not everyone can write cheques like Abramovich can. The real question comes when you look at how quickly they can climb out of the losses incurred during the capital investment and it looks like they are managing to do just that, and in fine form too. Under normal circumstances, anyone who manages a £77m improvement in the books from one year to the next would be hailed as a hero.

[Dirtycheat]

i dont mean to sound naive but we are supposedly the most popular club in the world. We have something like 330 million fans world wide. Thats more than the population of the usa. We can even start our own country if we can find some land to steal.

If you set up some sort of donation fund and ask fans and players etc to donate, i think in 1 or 2 years most the debt would have been dealt with.

I dont know much about finance but 14% interest seems ridiculously high considering how much money is being borrowed.

i dont mind the glaziers, they seem like nice people but this debt is ridiculous. How on earth will the ever pay it off?

[Prongs]

This was expected, when you buy a house on loan, you always pay off the credit and interest over a period of 20 years or more.

Yes not needed, but this was always that could happen when we left the door open and became public. I'm sure they know what they are doing, and even if they aren't, we are so much of an attractive proposition, that something will come out of it.

[GocartMozart]

Originally Posted by Dirtycheat

i dont mean to sound naive but we are supposedly the most popular club in the world. We have something like 330 million fans world wide. Thats more than the population of the usa. We can even start our own country if we can find some land to steal.

If you set up some sort of donation fund and ask fans and players etc to donate, i think in 1 or 2 years most the debt would have been dealt with.

I dont know much about finance but 14% interest seems ridiculously high considering how much money is being borrowed.

i dont mind the glaziers, they seem like nice people but this debt is ridiculous. How on earth will the ever pay it off?

ummm, so you'd basicallly be giving united away to Glazer for free?

leave your donations for setting up enterprise in Africa, the world doesn't revolve around Manchester United and neither do they need your money. This is the thing, we don't own the club, we have no responsibility to keep it affloat, just like we don't have to buy a ticket or a scarf. We pay for a product which is the entertainment. The loyalty, the additional visceral benefits that are part of being part of the fanbase, is extra but it doesn't bind me to think that I have to help that fat bastard pay off his debt when I still have my own to deal with.

330? wow. yeah I'd love to make a Republik of Mancunia. great idea!

[Dirtycheat]

Originally Posted by GocartMozart

ummm, so you'd basicallly be giving united away to Glazer for free?

leave your donations for setting up enterprise in Africa, the world doesn't revolve around Manchester United and neither do they need your money. This is the thing, we don't own the club, we have no responsibility to keep it affloat, just like we don't have to buy a ticket or a scarf. We pay for a product which is the entertainment. The loyalty, the additional visceral benefits that are part of being part of the fanbase, is extra but it doesn't bind me to think that I have to help that fat bastard pay off his debt when I still have my own to deal with.

330? wow. yeah I'd love to make a Republik of Mancunia. great idea!

i agree with your first point, i didnt think that through.If it was still a private company maybe it would have made more sense. Id rather pay off the debt than see united sell players and assets to make the numbers work though.

I dont agree with the second point though. Its not all about entertainment and it isnt some sort of product, tv program or west end show. I think fans do have a bit of responsibility to help the club out when and if it needs it. I do understand what you mean and Im not saying you have to pay off their debts but im just saying, hypothetically if worst come to worst, should they need to pay off the debt urgently, there is probably enough of us to be able to help them with that without putting ourselves into debt too much.

we should also declare independence. Manchester probably inst enough for us all to live. We may need to take over france too

[ZEUS]

The only way for the fans to help in financial issues is for them to go to the stadium, buy scarves, shirts etc.

DC, when you wrote about donation it sounded like Manchester Untied is a charity organization. The Glazers are rich people, they have lots of money, they will find a way to solve this problem.