quote:
Yes, the debt is on the books of United as with the operating entity of any LBO, but with a healthy solvency position, when the Glazers exit so too does the debt. Their available sale proceeds get $-for-$ deducted by the debt balance as the buyer retires the existing debt. The Glazers would also get $-for-$ credit for any Cash on the books - so if the Glazers didn't take out dividends as in the green line in the above chart, they would just get that cash added to their sale proceeds. Again, with no insolvency concerns, debt and equity (dividend) decisions do not impact the club. They're a matter of Glazer preference.

The way the club operates the debt causes huge issues. Bc United is totally self sufficient that debt also hinders what United can do as whole not just with buying players. It’s a big reason they have been so proactive with cutting the wage bill down and why the club can’t be proactive with doing other things. This is when outside investing from the owners becomes crucial. Yet we are getting none. Also bc that debt lays on the books of the club it has now become injected in the potential selling price of the club. Any potential buyers of the club will have to pay that debt off as well buying the asking price for United.

No one is saying the serviceable debt wasn’t a brilliant way to buy the club, but it turned out to be extremely shite ownership when you force the club to take its own profits to pay off the debt your purchase put on the club and then take money out of its profits.

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How many of the protestors frustrated with the current $x debt balance are aware that the Glazers will earn $x less of sale proceeds as the outstanding debt of the club is retired in the closing wires? Protestors aren't dumb for not understanding higher finance, but the debt/dividends are a distractor - it does not impact the current performance/viability of the team and it is not going to exceed the Glazers' lifespan as owners.

Like I posted above the value of the club if it is to be sold has been analyzed to include the debt so the glazers will laugh all the way to the bank if they do sell.

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This is a microcosm - spending a lot of money inefficiently is not a shortcoming of providing the financial resources needed. It actually serves to better destroy the "Glazers are cheap" arguments.

Management/organizational issues above all.

I think we are saying the same thing here, yes they are cheap and they hired the wrong people who wasted the clubs money, which ended up making United as a club spend more. Nothing is coming out the Glazers pockets and in the long they just take from the club.

Hopefully they decide to invest their own money into United to help us be successful again bc that would just raise the value of the club.

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Posted by RemouladeSawce

Uranus

Member since Sep 2008

16694 posts

Posted on 6/25/21 at 6:35 am to StraightCashHomey21

quote:
financial analysts and others have spent time going through United’s reports and other things. That are saying the opposite he is.

I am saying that with insolvency not a concern, the debt/dividend choices made by the Glazers over the last decade (as they have led the league on wage/transfer spend) do not impact the club's performance and will not saddle the club long-term as the leveraging-up will get wiped out at closing by the new owners. This is correct and not open to interpretation.

Equity analysts being concerned at potential impact to stock price as the leverage ramps up aren't wrong, but they're not making the points you're arguing.

United's at a $3-4+ billion valuation today. If the Glazers sell today the owners miss out on ~$600 million of that as the debtholders are paid out first. The owners then just have to live with their $2.4 billion net exit. Short or long-term club financial viability/security not in question and never has been.

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Posted by RemouladeSawce

Uranus

Member since Sep 2008

16694 posts

Posted on 6/25/21 at 7:02 am to StraightCashHomey21

quote:
Nothing is coming out the Glazers pockets and in the long they just take from the club. Hopefully they decide to invest their own money into United to help us be successful again bc that would just raise the value of the club. Hopefully they decide to invest their own money into United to help us be successful again bc that would just raise the value of the club.

The highest wage bill in the EPL by far is coming out of the Glazers' pockets. The problem is that despite their many shortcomings as owners there's still too much left over. It's rightly infuriating.

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It’s awesome we are so self sufficient that the owners take money out of the club instead of paying off the debt they put on the club

Going back to the OP, my argument was just that the Glazers are not screwing the club long-term by the above 2 choices. If they load up on debt it means they get less at sale as the debt is wiped off the books and the club ends up free and clear of it. If they want to be greedy and simply can't wait for return and need dividends it means they sell with less cash on the books and less credit for it.

The Glazers are genuinely fricking the club with their other decisions as discussed.

This post was edited on 6/25/21 at 7:03 am

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Posted by StraightCashHomey21

Aberdeen,NC

Member since Jul 2009

126568 posts

Posted on 6/25/21 at 7:17 am to RemouladeSawce

quote:
The highest wage bill in the EPL by far is coming out of the Glazers' pockets. The problem is that despite their many shortcomings as owners there's still too much left over. It's rightly infuriating.

How is it coming out of their pockets? The club is completely self sufficient without ownership injecting money. Honestly you are the first person I’ve seen say that wages are being paid by the glazers pockets and not United’s books.

quote:
Going back to the OP, my argument was just that the Glazers are not screwing the club long-term by the above 2 choices. If they load up on debt it means they get less at sale as the debt is wiped off the books and the club ends up free and clear of it. If they want to be greedy and simply can't wait for return and need dividends it means they sell with less cash on the books and less credit for it.

The Glazers are genuinely fricking the club with their other decisions as discussed.

Their mismanagement on all fronts especially since SAF retired and Gill left combined lack of investment from their own money had hurt the club.

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Posted by theOG

Member since Feb 2010

10747 posts

Posted on 6/25/21 at 10:08 am to StraightCashHomey21

quote:
Yes I’m sure it’s over my head and the dozens of financial analysts and others have spent time going through United’s reports and other things. That are saying the opposite he is.

Calm down chief, I’m messing with you.

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You don’t even understand this whole situation and nothing you say should be taken seriously after you said these protest didn’t happen when we were winning titles.

Agree, you took me to school on that one (no bs).

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Posted by crazy4lsu

Member since May 2005

39151 posts

Posted on 6/25/21 at 10:16 am to RemouladeSawce

quote:
They should be dinged for punting on Old Trafford upgrades but the conventional wisdom that the owners of team with the highest wage bill in the EPL BY FAR that constantly overpays in the transfer market is milking the club of its worth is just not accurate. The only difference between United and the clubs above them in that chart is that the Glazers are so greedy that they explicitly want more of their investment monetized (via dividends) before Sale instead of waiting for it all in one go. That's it.

The difference between the Glazers and the Oil Baron owners is that the Glazers see the club as an investment vehicle, when the Oil Baron clubs see it as a sporting vehicle. That explains literally everything else. The Glazers don't understand the sport, because it isn't a business in a traditional sense. It's only been made to imitate a business through various commercial enterprises, as football clubs, as designed and designated in Europe, were not thought of as businesses until very recently.

quote:
The club's in the middle of a league title drought due to organizational and personnel failings (replacing football people/sport club organizational design with non-football people/commercial emphasis), not because of the capital structure the Glazers prefer for their investment.

Again, I'd argue this is one in the same, because the Glazers think of the club as a business who happens to play football, when in fact it is a sporting club whose brand value is secondary to what happens on the field, in a very real sense. It's very hard for American owners to understand this aspect of international soccer.

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