Chelsea & Man U debts £ 1.5 bn !

[TheChosenOne]

Romans money is only lendsies !

http://www.guardian.co.uk/football/2008/may/20/premierleague.chelsea


Love it

 

[Defsta]

Anyone remember Leeds :lol:

 

[Chris12345]

Anyone remember Leeds :lol:

I've said it a million times before... whatever your opinion on him... Kenyon is no mug... Abramovich can't just walk away and leave them in the shite!

 

[yanno]

United's accounts showed the club's total creditors at £764m. United does have "external debt" - £666m owed to financial institutions, including £152m to hedge funds - taken on by the Glazer family when they bought the club in 2005, then loaded on to United itself. While United's loans incurred interest of £81m last year, the loan to Chelsea by Abramovich is interest-free.

http://www.guardian.co.uk/football/2008/may/20/premierleague.chelsea

So, thanks to the Glazers, hedge funds and banks can call Manure their bitch.

Chavski are only in trouble if Abramovich gets bored with football...

 

[Chris12345]

Chavski are only in trouble if Abramovich gets bored with football...

And even if he did... he still has to fund them for 5/10 years or something with some sort of "parachute payment" like system...

 

[joey55]

I don't know why people are so scared of debt. There is a huge difference between what happened at the like of Leeds, where they took loans out against things like the stadium to buy players and a leveraged buy out. Prem clubs have such a high value thesedays that it is unlikely many investors will come along and buy the clubs with the spare change in their pockets. Abramovich's are very rare, whilst Glazers and the likes are pretty common. Debt is a reallity and it's a reallity we'll have to accept sooner or later as when Enic sell, which eventually they will, whoever buys the club will almost certainly have borrowed money to do so. Also we aren't going to be paying for our stadium without borrowing money.

 

[hellava_tough]

I've said it a million times before... whatever your opinion on him... Kenyon is no mug... Abramovich can't just walk away and leave them in the shite!

No, but he can take a bullet to the brain and have his estate carved up by greedy oligarchs.

 

[yanno]

I don't know why people are so scared of debt. There is a huge difference between what happened at the like of Leeds, where they took loans out against things like the stadium to buy players and a leveraged buy out. Prem clubs have such a high value thesedays that it is unlikely many investors will come along and buy the clubs with the spare change in their pockets. Abramovich's are very rare, whilst Glazers and the likes are pretty common. Debt is a reallity and it's a reallity we'll have to accept sooner or later as when Enic sell, which eventually they will, whoever buys the club will almost certainly have borrowed money to do so. Also we aren't going to be paying for our stadium without borrowing money.

I think the Glazers' deal for Manure is a classic example of the folly of C21st capitalism. The Glazers could only afford to buy Man Utd by borrowing hundreds of millions of pounds. In other words, they could secure credit lines from banks and hedge funds, at fluctuating and exorbitant interest rates.

Currently, the first £81 million of any Man Utd profit is used to pay the interest on the loans the Glazers took out so they could say: "we own Man Utd". Unless of course they want to take out more debt to finance these interest payments, and create a giant Ponzi scheme.

What did Man Utd get for this huge debt and interest payments? Sweet FA. Just some American owners who want to rack up ticket and merchandising prices to get a Return On Investment which will go into their own back pockets.

It's insane. The Glazers don't genuinely own Man Utd. They have a hugely expensive mortgage on it, and they're paying the interest on that mortgage out of profits generated by the club. Which means the club can't use that money to buy better players.

It's all rubbish, and I sincerely hope ENIC don't sell to the likes of the Glazers.

 

[joey55]

I think the Glazers' deal for Manure is a classic example of the folly of C21st capitalism. The Glazers could only afford to buy Man Utd by borrowing hundreds of millions of pounds. In other words, they could secure credit lines from banks and hedge funds, at fluctuating and exorbitant interest rates.

Currently, the first £81 million of any Man Utd profit is used to pay the interest on the loans the Glazers took out so they could say: "we own Man Utd". Unless of course they want to take out more debt to finance these interest payments, and create a giant Ponzi scheme.

What did Man Utd get for this huge debt and interest payments? Sweet FA. Just some American owners who want to rack up ticket and merchandising prices to get a Return On Investment which will go into their own back pockets.

It's insane. The Glazers don't genuinely own Man Utd. They have a hugely expensive mortgage on it, and they're paying the interest on that mortgage out of profits generated by the club. Which means the club can't use that money to buy better players.

It's all rubbish, and I sincerely hope ENIC don't sell to the likes of the Glazers.

But they will and they were actively trying to. Look at our accounts for the last couple of years. Those are essentially for sale signs for the likes of the Glazers. It was a point I was trying to make at the start of the season when people were heaping praise on Levy. Our whole strategy seemed to be about displaying that we can be competitive on the playing front, whilst at the same time still be able to generate sufficient profits to meet loans on any debts and this is without the new stadium or CL football. You can pretty much be sure that Levy doesn't feel the in the current economic environment we are that likely to attract a buyer and that is why we have seen a change in policy.

If, for example, we set up a yannoey55 private equity firm and were able to raise £350 million. A club finishing in 5th place, making large profits, with an appreciating squad value and massive potential for growth in terms of a bigger stadium and CL football is certainly something we'd be interested in. With the right strategy we could look to have secured ownership of the club for free.

 

[hellava_tough]

So in real terms what does this all mean? Are Man Utd going to be crippled by debt for the forseeable future? They seemed to spend big in the transfer market last year

PS I can understand bartering, but investment banking doesn't make any sense to me.

 

[yanno]

If, for example, we set up a yannoey55 private equity firm and were able to raise £350 million. A club finishing in 5th place, making large profits, with an appreciating squad value and massive potential for growth in terms of a bigger stadium and CL football is certainly something we'd be interested in. With the right strategy we could look to have secured ownership of the club for free.

Taking on debt to fund a new stadium with a much larger capacity when you have a large season ticket waiting list is one thing, and usually makes good business sense. It's precisely what the goons have done, and we are considering doing (although the credit crunch and the decline in commercial real estate values have almost certainly postponed the construction of any new White Hart Lane).

However, the Glazers' debt didn't fund a new Old Trafford. It primarily funded their takeover of the club, with the interest repayable out of Manure profits. That's a really crap deal for everyone apart from the Glazers.

 

[TheChosenOne]

I always said (Sir) Alan Sugar did well during and following his time at Spurs, having put up a load of guarantees and getting a nice earner for himself and his family during his time as Chairman, then selling the remainder of the vastly improved shares to ENIC recently.

Ebbsfleet Hotspur anyone ?

 

[joey55]

So in real terms what does this all mean? Are Man Utd going to be crippled by debt for the forseeable future? They seemed to spend big in the transfer market last year

PS I can understand bartering, but investment banking doesn't make any sense to me.

I'll give you a very simple example of how it works and why it's done. Say you want to buy Man Utd for £100. You don't have that money yourself, but have a solid coporate background and were CEO of a major company. So, given your background, people will lend you the £100. But, they want interest on it. But you are buying Utd as you see it really being worth more than £100 and if run efficiently should produce profits that not only cover the interest on the loan, but also pay the debt back. So in the end, you effectively get the club for free.

 

[joey55]

Taking on debt to fund a new stadium with a much larger capacity when you have a large season ticket waiting list is one thing, and usually makes good business sense. It's precisely what the goons have done, and we are considering doing (although the credit crunch and the decline in commercial real estate values have almost certainly postponed the construction of any new White Hart Lane).

However, the Glazers' debt didn't fund a new Old Trafford. It primarily funded their takeover of the club, with the interest repayable out of Manure profits. That's a really crap deal for everyone apart from the Glazers.

But that is the whole point. Enic are an investment vehicle and therefore will run the club in a way that offers them the maximum return on their investment. And as such will operate in a way that is most likley to bring interest from potential buyers and more often than not, these buyers will be the likes of the Glazers. This is why I sometimes get a bit frustrated with some of the prasie Enic get, and people saying thank God we aren't in debt and run by the likes of the Glazers, when indirectly that is what is most likley to happen and exaclty what Enic want to happen.

 

[hellava_tough]

I'll give you a very simple example of how it works and why it's done. Say you want to buy Man Utd for £100. You don't have that money yourself, but have a solid coporate background and were CEO of a major company. So, given your background, people will lend you the £100. But, they want interest on it. But you are buying Utd as you see it really being worth more than £100 and if run efficiently should produce profits that not only cover the interest on the loan, but also pay the debt back. So in the end, you effectively get the club for free.

Thanks for that Joey.

I understood that much, but what I was really asking is that if Man Utd are crippled by debt why is it that they still spend big in the transfer market?

 

[stemark44]

The Glaziers are not investing money in Utd - the loans they took to buy out the club are a massive burden on Uniteds profits!

 

[hellava_tough]

The Glaziers are not investing money in Utd - the loans they took to buy out the club are a massive burden on Uniteds profits!

Was that in reply to my question?

 

[yanno]

But that is the whole point. Enic are an investment vehicle and therefore will run the club in a way that offers them the maximum return on their investment. And as such will operate in a way that is most likley to bring interest from potential buyers and more often than not, these buyers will be the likes of the Glazers. This is why I sometimes get a bit frustrated with some of the prasie Enic get, and people saying thank God we aren't in debt and run by the likes of the Glazers, when indirectly that is what is most likley to happen and exaclty what Enic want to happen.

You're correct of course that ENIC is an investment vehicle and as such wants to maximize Return On Investment. This is probably one balance sheet reason why Levy is always keen to stress that he usually makes a profit on signings (ie that most players we've signed recently have been sold for more than they cost us).

But, and it's a big 'but', ENIC didn't lump us with £81 million pounds pa worth of interest payments to finance their takeover of Tottenham. None of us are Nostradamus and we can't predict the future - even uber-speculator Joe Lewis got stiffed by the Fed & JP Morgan over Bear Stearns. However, I would be mightily p*ssed off if ENIC sold Spurs to a buyer who was financing their takeover out of future club profits (the Glazer model).

 

[joey55]

You're correct of course that ENIC is an investment vehicle and as such wants to maximize Return On Investment. This is probably one balance sheet reason why Levy is always keen to stress that he usually makes a profit on signings (ie that most players we've signed recently have been sold for more than they cost us).

But, and it's a big 'but', ENIC didn't lump us with £81 million pounds pa worth of interest payments to finance their takeover of Tottenham. None of us are Nostradamus and we can't predict the future - even uber-speculator Joe Lewis got stiffed by the Fed & JP Morgan over Bear Stearns. However, I would be mightily p*ssed off if ENIC sold Spurs to a buyer who was financing their takeover out of future club profits (the Glazer model).

You'd be pissed off, but isn't there an argument to say you should be pretty narked now! You've got a bit of a financial background, from I can gather, and therefore surely you'd be surprised if a potential buyer came with any other idea. Therefore, should you not be slightly pissed off already? As I said earlier, if you look at the way the club has been run in the last few years, what type of buyer would you say they have been trying to attract? I'd say more than any club in Europe we've been run in a way that targets potential investors such as the Glazers. So isn't there an argument to say that enic are in effect looking to plunge us into to debt? You are right in saying these deals are good for the likes of the glazers, but they are also good for the people who actively try to attract the lies of the Glazers.

Basically, what i'm saying is that you'll be pissed off at something that is predicatbly going to happen and therefore shouldn't you be a little pissed with the people that are actively looking/hoping it will happen? I've been for a while now and I'm just glad that I don't see the conditions for a takeover so favourable as they were, which looks as if it will resort in a change of policy for the short term at least.

 

[Kendall]

I've said it a million times before... whatever your opinion on him... Kenyon is no mug... Abramovich can't just walk away and leave them in the shite!

You mean like Mileson couldn't to Gretna?

If Abrahmovic got ill, for example, I'm pretty sure he could recall the loan, and if he died his family could definitely insist on it's repayment