The whole premise of this purchase arrangement has always been for the Glazers to stay in front in as much as far as what they paid for the business and what it is ultimately worth should they sell (their pay day).. so far we know that they paid a little more than £800m for the club (£790m plus costs).. the debt connected to the enterprise has grown to £666m at 30.06.07 plus the £261m Commerzbank loan which would be c£300m incl interests as at the same date 30.06.07

Thats £966m as at 30.06.07 and eighteen months later their exposure will be well over £1Bn.. the big question must be what is the value of the business now? and as their exposure continues to escalate when do they decide that the optimum time to liquidate should be?

This is taken from purely a Glazer perspective of course and as a club United continue to be a cash cow.. its just that it appears it wont generate ether enough for the Glazers to stay in front or appreciate enough as a capital asset over time for the Glazers to get their pay day and the current world economic woes won’t help them in the slightest..

this article is backwards. What Chelsea did over the last couple seasons (in terms of buying out the transfer market) is a copy of what United did throughout the 90′s in order to gain success. the only difference is that United happened to belt out some very good players from their youth team as well, which is something Chelsea has been attempting to do, just without as much success.

There are two elements to the Man Utd debt, the hedge funds and the senior debt. The hedge funds have no security over the club and no influence over it either. Yes, they have to be repaid but that is something the Glazers will do from their own resources or refinancing plans in time.

Manchester United is supporting the senior debt, which is around £265million to £275million. People need to recognize the cost of servicing the interest on that debt is not in excess of the what Man Utd were previously paying in dividends and corporation tax as a publicly quoted company.

The core of the senior debt will be repaid when the Glazers resell a part of their shares. For that to be done Man Utd should have enough successful seasons to drive share prices through the roof and that has already started.

The company is liquid and solvable, its finances are far from being at risk >>

Attn Jade: Sorry I got in on this late but mate you are so far wrong I’m shocked you are even commenting. For a start you fail to recognise that Manchester United Limited (formerly Manchester United PLC) is now ultimately owned (in the UK anyway) by Red Football Joint Venture Limted.

Yes there are initially two elements to the Man Utd debt (actually three as I will get to later) those being the hedge funds and the senior debt but for you to say the hedge funds have no security over the club is just plain wrong and your figures above confirm that you are not even aware of the refinancing that occurred a year ago in August 2006 when a new senior facility of £525m was arranged as well as a £50m revolving credit facility which has no doubt been utilised to some extent over the summer.

In addition to this there is also a £138m PIK loan remaining which you are no doubt referring to as part of the hedge fund loans but please don’t be mistaken these are the Glazers own personal risk, as this loan is in turn secured against the shares of Red Football Limited which in turn owns the assets of Man Utd Ltd.

Don’t believe me? Then read for yourselves here at:

http://www.chriselkins.co.uk/files/RedFootballJVLimited_2006.pdf

In particular read notes 31 to the accounts which detail the above. Also read note 18 which basically divulges that there are fixed and floating charges over the assets of the various group companies all of which means that everything of value, the stadium, training facilities, players registrations etc have been used as security for these loans.

So much for your implication that all charges against all group companies are not in “excess of what Man Utd were previously paying in dividends and corporation tax as a publicly quoted company”

The initial debt could now be as much as £720m on an asset they bought for £790m but don’t forget they supposedly (this is where the third tranche of the financing comes into it) put in £269m of their own money which we know was borrowed initially from Commerzbank. Where does this fit in the equation? Well Red Football Joint Venture Ltd is in turn owned by Red Football Shareholders Limited. In turn this is wholly owned by Red Football Limited Partnership (formed in US state of Nevada) with the ultimate controlling party being the Malcolm Glazer Revocable Trust established in Florida. See note 32.

I mention this to explain that somewhere along the line this £269m is being held, accounted for and ultimately serviced. I mention it also because no doubt the shares of the underling companies (which we know have in affect been mortgaged against every Manchester United asset) have also been used as security and therby raising the inherent risk. So this £269m loan attracting interest at lets say 7.5% or £20m pa needs also to be at least considered. Added to the senior debt and PIK loans it comes in at a cool minimum £80m pa and this is before early redemption fees and facility fees etc that have added up to well over 50m so far.

Ultimately what we are talking about here is that Manchester United Football Club and its fortunes are inexorably linked to the fortunes of the Glazer empire and we really do not know enough about this to make any real conclusions. We do know the economic climate is getting darker especially in the debt market and we also know that plans to refinance the business model of Red Football were recently put on hold when the market suddenly found it had no stomach for the restructure.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/22/cnmanu122.xml

Obviously the Glazers are waiting for expected additional revenue streams to hit the sport perhaps at the end of collective bargaining and may also be hopeing for continued capital appreciation of their acquisition. But they are taking a risk because at no time soon are they likely to break even having increased total entity debt from a purchase price of £790m to in excess of a Billion pounds including their initial stake. Meaning to break even they need to sell right now for at least a billion pounds!

The hope is the rest of the Glazers empire in being run a lot more cost effective than the MUFC franchise and also that cash flow throughout the empire is forthcoming. Ironically not being able to restructure has helped cash flow as the interest on the £139m PIKs attracting 14.25% pa is rolling in nature meaning that interest is added to principal and is payable on maturity (eleven years from Aug 2006 – see note 31). So this whole scenario could take years to play out yet with a worst case scenario of the Glazers needing to find nearly £600m in 2017 on an intial £139m debt which has continued compounding and they obviously haven’t got any other assets anywhere otherwise this debt would have been financed already.

There is some good news of course and that is the Glazers will need to continue investing in the club even if the business model as a whole is not profitable otherwise they are in danger of their investment losing value but the problem will come when and if cash can not be internally generated because of the debt repayment and the inability to restructure (which we have already seen). Equally theres just no way they can pay off the loans they have in anycase and will just struggle on, hopeing to at least pay off the senior debt interest. At some stage something will have to give and they will look for a way out but when will the value of the business be worth more than their overall exposure assuming its in excess of a billion pounds now?

So would you perhaps like to rethink whether “the company is liquid and solvable” with “its finances far from being at risk”?

As for Chelsea, well thats another story.

> I assume you can provide evidence of this to the relevant authorities, because as
> you are well aware, Wenger only ever gave a cash donation to the ASEC Academy &
> has never ever received a single penny back from them. If you are stating you
> have evidence that is incorrect them I’m sure you will have no problem
> providing it??

The evidence was already provided here:
http://news.bbc.co.uk/1/hi/programmes/newsnight/5036342.stm

The matter was investigated by the PL. They decided no PL rules were broken. Which is great because no-one said any PL rules were breached. It’s Fifa rules that are breached relating Uefa competition.

During the period of the loan Arsenal used “Goal” to support Beveren in return for control on the board. They received profits from sales of Ivorian players (like Eboue).

Wenger himself invested 300k in the Ivory Coast academy in 2002 and expected over 300% profits. Like when Toure was bought direct from the Academy. But when question Wenger “didn’t see it” that way. It was merely a philanthropic gesture and not an investment (expecting a return) at all. Yeah, right. Copies of the documents proving Wenger’s involvement are linked in a popup off http://news.bbc.co.uk/1/hi/programmes/newsnight/5037494.stm

Did Arsene open all his bank acounts to the PL investigation? Why isn’t he involved in the Stevens enquiry for bungs? Why don’t Uefa investigate the clains seeing as its Fifa’s rules that have jurisdiction in Uefa competitions that’s in question?

Arsenal original denied any involvement in Beveren through Goal, but were forced to admit it. Wenger doesn’t deny giving money to the academy, but he calls ita donation not an investment. All the essentials of the investigation are therefore true. It’s all up to whether you believe the statements from Guillou and the un-named Beveren diretor that confirms the accusations outright. Arsenal and Wenger are confirmed liars in this matter already – no-one in their right mind would believe them.

The funniest thing of all is that the Belgian police investigated Beveren trying to find Chelsea and Abramovich. Instead they found Arsenal and Wenger. Classic.

While i’m a manchester united fan, i wont blame chelsea for overbuying. look, its simple, every team wants to win…even watford or doncaster fans (no disrespect meant)sometimes dream one day their team will be champions. so when roman took over u cant blame him for overspending to make his team competitive. these days winning is almost everything (its said that its this way now).

However, there is no denying that the chelsea way over the last few years has changed the way transfer market operates. some players went to chelsea for high prices then played little part in the title run-ins (SWP example). u almost had the impression chelsea simply bought players other teams were interested just to thwart their opponents…thats y we were so happy we managed to get the premiership trophy back to old trafford last season.

i think, though, it will be unfair to blame chelsea for inflated prices. Rio, Rooney and Veron came before the Roman era…and, correct me if am wrong, only shevchenko’s price surpassed them. we must not try to justify or excuse united’s spending, coz, as i said earlier, swashbuckling spending is nothing new at OT and dates back to the 50′s. each club has its own traditions and culture and united has always been a glamorous club with lotsa stars and attacking football…while we remain very famous for our youth system which dates back to the 40s, no manager of manchester united has ever been afraid to reach for their pockets if need be.

Regards

- they massively inflate player’s transfer value

***See my above post; they are not the sole reason for it, and it is unfair to criticize the Blues for doing so.

- have a manager with a huge ego, and players(drogba)

***I’ll give you that; it is not endearing to other fans, and I am not happy about it myself.

- try to present everything as a struggle

***It is for us, but it only seems petty because they are in a position other clubs will kill to be in, but again, also not endearing.

- jose’s reported falling out with roman over transfers, many chelsea fans support jose over this but when does he reach into his own pockets

***Of course supporters will favor a manager who wants to improve the team. If Mourinho didn’t produce results, the fans wouldn’t back him so much, but when he wins two league titles and says he needs more money for players to get a third, the supporters are going to believe him and push for it; remember, supporters don’t care about profits, only pitch results; executives have to balance both.

- play boring football alot of the time

***I rsent when everyone says this; more posession means you have more time to strike and the opponents have less. If you watch their games, they alter their style for different opponents. It’s really not fair to criticize winning football, but I know casual fans and rivals hate it because it works, and who wants to watch your rival lose to Chelsea or flip on a game for fun that isn’t high paced? No one. But hey, it’s not like Arsenal has never killed the clock before.

- and finally,they tapped up cashley cole

***Don’t hate the Blues because he couldn’t get a contract done, blame him or Arsenal management for not getting a deal done.