StevO Posted August 1, 2011 Report Share Posted August 1, 2011 (edited) Here was me thinking it was their ultra successful commercial activity that created numerous significant revenue streams, branding, marketing prior to and during the creation of the premier league that made them one of the richest clubs in the world. United are massively in debt, hence their fans protesting last season. And the thing with putting money in. Arsenal do it, I think it's called fan share. You can keep putting money into a trust, and the trust buys share. So you effectively have shares in the shares, but it released a lot of cash for the club over the years. The fans are a bit worried after their recent take over though, where they will stand in this fanshare. They have a website with plenty of info. Arsenalfanshare.com Edited August 1, 2011 by StevO Quote Link to comment Share on other sites More sharing options...
Hafnia Posted August 1, 2011 Report Share Posted August 1, 2011 I think you have your head firmly stuck in the sand if you honestly beleive that. The longer we remain at Goodison the further we will fall behind the big boys. Really? An increase in capacity that allows a further 16,000 fans in will generate a further £11m plus per year. The cost versus a new ground will be minimal in comparison. The spin offs from the increased capacity may draw in the interests of investors who can see the real potential of a club with 45,000 plus fans attending. Quote Link to comment Share on other sites More sharing options...
marcopaulo Posted August 1, 2011 Report Share Posted August 1, 2011 is there room for 16,000 more? Quote Link to comment Share on other sites More sharing options...
Hafnia Posted August 1, 2011 Report Share Posted August 1, 2011 is there room for 16,000 more? http://www.keioc.net/index.php?page=redevelopment-plans Quote Link to comment Share on other sites More sharing options...
StevO Posted August 1, 2011 Report Share Posted August 1, 2011 Just replacing the park end with a very modern stand (with a long term view to continue it around the rest of the groud) could make huge difference. Quote Link to comment Share on other sites More sharing options...
pax Posted August 1, 2011 Report Share Posted August 1, 2011 And you think this board could do for that Everton? Because I have zero faith in that being the case. Why do the board need to do it? Quote Link to comment Share on other sites More sharing options...
pax Posted August 1, 2011 Report Share Posted August 1, 2011 I think you have your head firmly stuck in the sand if you honestly beleive that. The longer we remain at Goodison the further we will fall behind the big boys. If Robert Elstone had said to me that he was going to charge me an extra £100 for my season ticket but promised we would spend £30M on players I would have been more than happy to hand over the dosh You know, there is the idea. There is something concrete to criticise the board for, lack of creative, forward and inventive thinking. When you buy a season ticket you get the option to pay an extra £100 that will go into a find to spend entirely on transfers and is held is a separate account, with regular updates on whats in the pot. I reckon at least 5000 to 10,000 would pay an extra £100 if this was the case. There is an easy £500k to £1 million per year ! Who knows, how much could be generated and if it fails and doesn't work, so what, you have lost nothing and it's cost nothing. Quote Link to comment Share on other sites More sharing options...
pax Posted August 1, 2011 Report Share Posted August 1, 2011 United are massively in debt, hence their fans protesting last season. So? Debt is not always a bad thing. For example i have a 50% mortgage on my house i bought in 2003. My house has doubled in value so the debt i took out to finance the purchase of my house was not bad debt, it was easily serviceable and always had potential to generate good profit for me. The debt Man Utd have looks to me to be serviceable and they look to be able to continue the spending needed to stay at the top. If both those things continue, who cares how much debt they have? Quote Link to comment Share on other sites More sharing options...
Romey 1878 Posted August 1, 2011 Report Share Posted August 1, 2011 Why do the board need to do it? It's not the board's job to create greater revenue streams, to find more ways to bring money into the club? What exactly do the board do then? Quote Link to comment Share on other sites More sharing options...
pax Posted August 1, 2011 Report Share Posted August 1, 2011 It's not the board's job to create greater revenue streams, to find more ways to bring money into the club? What exactly do the board do then? Yes, that is the boards job. They don't have to do it themselves though, they just need to employ the right people. Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 1, 2011 Report Share Posted August 1, 2011 So? Debt is not always a bad thing. For example i have a 50% mortgage on my house i bought in 2003. My house has doubled in value so the debt i took out to finance the purchase of my house was not bad debt, it was easily serviceable and always had potential to generate good profit for me. The debt Man Utd have looks to me to be serviceable and they look to be able to continue the spending needed to stay at the top. If both those things continue, who cares how much debt they have? From your point of view debt isn't a bad thing. Thing is you are working to something - owning your own home, which should increase in value. Debt within an established Football club is different, all it does is take money to service that debt, money that must come from operating profits. This of course then cuts into bottom line and as such something must give.......... Quote Link to comment Share on other sites More sharing options...
Trigger Posted August 1, 2011 Report Share Posted August 1, 2011 Has anyone actually set up any sort of account for fan donations? Might sound stupid but this is an easy way to try and generate funds for the club, a club that can do with anything they can get their hands on. A few examples at varying levels. 30,000 people at £100 = £30 million 5000 people at £100 = £500,000 5000 people at £10 = £50,000 The likely hood is that you will get some donating £5, or £10 and some might put in a few k or even more. For me, something far more supportive and productive for the football club than something like 'The Peoples Group'. Something like this would create far more media attention for the club than any of these negative groups, it would be positive media attention for the club and also, if successful (on any level) it would show an investor the club has a loyal, supportive and unique fan base that would make the club seriously investable. If the club isn't investable as it stands (which is my opinion), the fans can make it investable to someone. Just a thought. Although I love the idea of fan donations, I would have thought there would be tax implications on the money raised. I'm not a tax expert, but pretty sure a football club doesn't hold any kind of charity status for tax free donations. Also I'm pretty sure 30,000 x £100 = £3m and NOT £30m. I have a view that things go in cycles, and i'll be interested to see when the "benefactor" model for the likes of Man City and Chelsea expires in 10-20 yrs what states the clubs are in. I personally think that the way our club is run currently is a pretty good model given the financial issues we've had over the years. It's a long way from perfect and we should always strive for me, but it could be a hell of a lot worse. Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 1, 2011 Report Share Posted August 1, 2011 Whilst I agree that we will eventually need a new stadium, it isnt realistically goin to happen in the next 5 years, and the likelihood is that it will be close to 10years before we could move in if the ball started rolling today. We cant afford to stand still for another 10 years, and we have to start thinking of developing what we have now incase in never happens. Put it this way, if you ran a restaurant that had the potential to expand and the kitchen was old, out dated and needed replacement, you wouldnt go out and try and find a plot of land to build a new restaurant unless you had the finances to do it. Instead you would gut it out, maybe extend if possible and focus on the design to increase capacity and improve efficiency. If this was Everton we would still be rubbing sticks together for fire... For me, rather than splashing cash on a stadium I would rather see players coming in. To use your restaurant analogy would I build premises before I knew I had some recipes the customers would like? The stadium as you say is a long way away, in fact a mere pipe dream so players to advance our current cause and create additional revenue streams, european football, cup runs, commercial ops around new players etc etc is a more realistic and worthwhile cause to work to Quote Link to comment Share on other sites More sharing options...
Trigger Posted August 1, 2011 Report Share Posted August 1, 2011 I think it reaches that chicken and egg situation. You'll never get the capital for the players from the loans you'd need unless you could show a potential growth in ticket/commercials revenues to borrow against. In order to do that you'd need a new stadium. Even if you ran the best commercial football club Everton could be without a new stadium it would never be enough to cover spend on lets say £30m on new talent. Lets say we spent we spent £30m on talent this transfer window on 3 players at £10m each and wages each of £35 a week and we did this by getting a loan of (completely plucked out of the air as I have no idea what current bank interest rates or timescales would be for suchg a large loan) =£30m to be paid back over 5 years at 5% Annual Interest. Approximately our repyment to the loan would be £5.5m to £6.6m per year for the loan and £5.5m for the 3 players wages per year. So we would have to grow our annual cash intake by well over the £12m (approx.) total to cover the additional costs without any investment at all to grow this cash. So we could do this by: - Increasing Gate Receipts and ticket sales from about £20m to £32m by doubling ticket prices - don;t forget Mr.Taxman will take a proportion of any increase. - Increasing our sponsorship , advertising from £7m a year to £19m+ - Getting sky to pay us £62m rather than £50m a year guarenteed each year for the next 5 years. Not an easy task to be honest. Would everyone be happy on here to double ticket prices? To be honest it's only quick fix I can see, but would probably be the most unpopular thing in the world. Quote Link to comment Share on other sites More sharing options...
Everton_Worshiper Posted August 1, 2011 Report Share Posted August 1, 2011 The fan share approach that Arsenal have is far better than putting an extra £100 on the cost of a season ticket. When it comes down to it, fans will not pay the extra in masses because there is no control over what the money is used for. Plus, I could imagine the majority of fans have other priorities to spend their extra money on rather than giving it (indirectly) to overpaid footballers. Quote Link to comment Share on other sites More sharing options...
Romey 1878 Posted August 2, 2011 Report Share Posted August 2, 2011 Yes, that is the boards job. They don't have to do it themselves though, they just need to employ the right people. Which they have failed to do for a decade. Hence me having no faith that they could do it now. Quote Link to comment Share on other sites More sharing options...
pax Posted August 2, 2011 Report Share Posted August 2, 2011 From your point of view debt isn't a bad thing. Thing is you are working to something - owning your own home, which should increase in value. Debt within an established Football club is different, all it does is take money to service that debt, money that must come from operating profits. This of course then cuts into bottom line and as such something must give.......... No, i said not all debt is bad. Nearly every single company in the world has been run and built up using debt. The mortgage (debt) i took out on my house was not working to something as i was paying an interest only mortgage. I was relying on my judgement and research into the value of the house then and in the future. I got it right and had it not been for interest rates currently being on the floor, i'd have paid the mortgage off in full by now, but there is no point with my mortgage payments being so low. I put the cash into shares during the crash instead. So all the way through the process, i'm servicing the debt and using what cash i have to maximise my returns. When interest rates significantly rise and my mortgage becomes expensive, i'll get rid of the mortgage. It might be a simplistic model, but for me it's not that different from the way Glazer has bought and services his ownership of Man Utd. Glazer can sell that club for a very decent profit at any time. In fact i think there would be a bidding war between several parties for the club. It's tv revenue money, it's commercial activities around the world, Champions League money etc make sure that Man Utd is financially very strong and easily able to service the debt and continue spending the money it needs to to stay at the top. Ok, so there are some threats now. AF retiring and the emergence of Man City as a new competitor are quite big threats. But as far as i can see, Glazer is in a strong position unless there are things that we don't know about that changes that. Quote Link to comment Share on other sites More sharing options...
pax Posted August 2, 2011 Report Share Posted August 2, 2011 Lets say we spent we spent £30m on talent this transfer window on 3 players at £10m each and wages each of £35 a week and we did this by getting a loan of (completely plucked out of the air as I have no idea what current bank interest rates or timescales would be for suchg a large loan) =£30m to be paid back over 5 years at 5% Annual Interest. 5% would not be achievable. Any bank loan we get would have to have a 100% guaranteed and there is now way this club is in a position to do that. The only other option would be a loan on a huge interest rate. I do mean silly interest rate as there is a distinct possibility Everton would default on the loan and has the potential to go bust by taking on this level of debt. Quote Link to comment Share on other sites More sharing options...
Hafnia Posted August 2, 2011 Report Share Posted August 2, 2011 The analogy of paying off a mortgage (being a big debt) over a long period of time to own an asset is not lost on me for other reasons. Finch farm being one. An asset that in 20 years would likely to be worth a fortune relative to what we sold it for... Quote Link to comment Share on other sites More sharing options...
StevO Posted August 2, 2011 Report Share Posted August 2, 2011 finch farm has been a mother of a fuck up! the sale cost compared with the rent is just lunacy! i know it free'd up cash short term, but long term it is just terrible. Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 2, 2011 Report Share Posted August 2, 2011 No, i said not all debt is bad. Nearly every single company in the world has been run and built up using debt. The mortgage (debt) i took out on my house was not working to something as i was paying an interest only mortgage. I was relying on my judgement and research into the value of the house then and in the future. I got it right and had it not been for interest rates currently being on the floor, i'd have paid the mortgage off in full by now, but there is no point with my mortgage payments being so low. I put the cash into shares during the crash instead. So all the way through the process, i'm servicing the debt and using what cash i have to maximise my returns. When interest rates significantly rise and my mortgage becomes expensive, i'll get rid of the mortgage. It might be a simplistic model, but for me it's not that different from the way Glazer has bought and services his ownership of Man Utd. Glazer can sell that club for a very decent profit at any time. In fact i think there would be a bidding war between several parties for the club. It's tv revenue money, it's commercial activities around the world, Champions League money etc make sure that Man Utd is financially very strong and easily able to service the debt and continue spending the money it needs to to stay at the top. Ok, so there are some threats now. AF retiring and the emergence of Man City as a new competitor are quite big threats. But as far as i can see, Glazer is in a strong position unless there are things that we don't know about that changes that. The point is that money is spent on servicing debt. Goldman Sachs believe United are over leveraged, Glazer financed the purchase through hedge funds, funds that bear no relation to Bank of England base rate. So if Man U operating profits are £250million but interest payments are £200million then thats only £50million left for players etc, granted still more than we have but leaves them trailing in the wake of their oil rich neighbours The bond sales they have had have been over subscribed but there is the suspicion this money is taken by the Glazers and not used to alleviate the debt burden they utilised to purchase the club. All in all its an exercise in futility to compare personal mortgages with finance raised upon global markets. Its apples and oranges. Whilst your own personal experience is one of sound investment and making finance work for you, businesses work in different ways. Macroeconomics and household budgets are 2 different things Quote Link to comment Share on other sites More sharing options...
pax Posted August 2, 2011 Report Share Posted August 2, 2011 The point is that money is spent on servicing debt. Goldman Sachs believe United are over leveraged, Glazer financed the purchase through hedge funds, funds that bear no relation to Bank of England base rate. So if Man U operating profits are £250million but interest payments are £200million then thats only £50million left for players etc, granted still more than we have but leaves them trailing in the wake of their oil rich neighbours The bond sales they have had have been over subscribed but there is the suspicion this money is taken by the Glazers and not used to alleviate the debt burden they utilised to purchase the club. All in all its an exercise in futility to compare personal mortgages with finance raised upon global markets. Its apples and oranges. Whilst your own personal experience is one of sound investment and making finance work for you, businesses work in different ways. Macroeconomics and household budgets are 2 different things Doesn't matter if money is spent on servicing debt if that debt is serviceable and doesn't negatively effect the business. Since the Glazers took over i see nothing that suggests the club is not fulfilling both of these. I'm not privy to detailed financial dealings of the club so i can only go on what i know, can't comment on what i don't know. Goldman Sachs? Well i work in the City, have done for 11 years and at one stage was employed by Goldman Sachs. It wouldn't surprise me if they do state the club is over leveraged and it wouldn't surprise me to find out they have something to gain by making these claims. I'm going to have to disagree with you on the oranges and apples analogy. The most complex financial structures are all created and based on simplistic theories. Anyway you don't think mortgages are part of a global market? Selling on shitty mortgage deals as sound investments is one of the main reasons the global financial meltdown occurred. I personally feel financial institutions and people who work in finance want to make it seem like the work they do is specialist, highly skilled and incredibly complex. The truth is vastly different. Quote Link to comment Share on other sites More sharing options...
pete0 Posted August 2, 2011 Report Share Posted August 2, 2011 (edited) The point is that money is spent on servicing debt. Goldman Sachs believe United are over leveraged, Glazer financed the purchase through hedge funds, funds that bear no relation to Bank of England base rate. So if Man U operating profits are £250million but interest payments are £200million then thats only £50million left for players etc, granted still more than we have but leaves them trailing in the wake of their oil rich neighbours The bond sales they have had have been over subscribed but there is the suspicion this money is taken by the Glazers and not used to alleviate the debt burden they utilised to purchase the club. All in all its an exercise in futility to compare personal mortgages with finance raised upon global markets. Its apples and oranges. Whilst your own personal experience is one of sound investment and making finance work for you, businesses work in different ways. Macroeconomics and household budgets are 2 different things This, plus Economics > Business studies. Am guessing Pax done BS Edited August 2, 2011 by pete0 Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 2, 2011 Report Share Posted August 2, 2011 (edited) 2017 would appear to be the D-Day for Man Utd. That is when they must repay the bonds that purchased Man Utd. The whole deal is highly complex, Red Football Ltd is a company set up by Glazer to buy Utd. It has 2 parent companies in the UK and above those companies is Red Football LLC (based in Delaware), its is believed this company is owned by the Nevada based Red Football Limited Partnership which is owned by a variety of Glazer family trusts The current debt is somewhere in the region of £550million. £250 million in outstanding bonds and £300million of bonds secured against the clubs assets. Whilst the debt remains manageable it does negatively affect the business. Without the debt they may never have sold Ronaldo, they would have more money for new players. Yeah they keep buying but they could buy more if not saddled with debt. For sure the experts now nothing, if they did we wouldnt be in a global financial whirlwind. However where Utd are concerned the facts are the facts and the debt is having a detrimental affect. There is the issue late last year of of the clubs PIK (payment in kind) loans being cleared to the tune of £250million with not a word as to where this money came from. Edited August 2, 2011 by codders78 Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 2, 2011 Report Share Posted August 2, 2011 Anyhoo, I don't want to get bogged down in a economics discussion, particularly one about Man Utd finances as I couldn't give a flying fuck about them. I care about one club's finances and that is ours. Quote Link to comment Share on other sites More sharing options...
pax Posted August 2, 2011 Report Share Posted August 2, 2011 Anyhoo, I don't want to get bogged down in a economics discussion, particularly one about Man Utd finances as I couldn't give a flying fuck about them. I care about one club's finances and that is ours. Agreed. Quote Link to comment Share on other sites More sharing options...
pax Posted August 2, 2011 Report Share Posted August 2, 2011 This, plus Economics > Business studies. Am guessing Pax done BS Quote Link to comment Share on other sites More sharing options...
codders78 Posted August 2, 2011 Report Share Posted August 2, 2011 Agreed. Interesting though it was Quote Link to comment Share on other sites More sharing options...
Romey 1878 Posted August 2, 2011 Report Share Posted August 2, 2011 http://thisisfutbol.com/2011/08/blogs/bill-kenwright-chairman-how Quote Link to comment Share on other sites More sharing options...
Bailey Posted August 2, 2011 Report Share Posted August 2, 2011 Just replacing the park end with a very modern stand (with a long term view to continue it around the rest of the groud) could make huge difference. I agree So? Debt is not always a bad thing. For example i have a 50% mortgage on my house i bought in 2003. My house has doubled in value so the debt i took out to finance the purchase of my house was not bad debt, it was easily serviceable and always had potential to generate good profit for me. The debt Man Utd have looks to me to be serviceable and they look to be able to continue the spending needed to stay at the top. If both those things continue, who cares how much debt they have? Man U (or any other businessman owned club) would be fucked if they pulled out though. Debt 'can' be ok if you have someone there to pay it off which isnt always guarenteed. From your point of view debt isn't a bad thing. Thing is you are working to something - owning your own home, which should increase in value. Debt within an established Football club is different, all it does is take money to service that debt, money that must come from operating profits. This of course then cuts into bottom line and as such something must give.......... Completely Agree For me, rather than splashing cash on a stadium I would rather see players coming in. To use your restaurant analogy would I build premises before I knew I had some recipes the customers would like? The stadium as you say is a long way away, in fact a mere pipe dream so players to advance our current cause and create additional revenue streams, european football, cup runs, commercial ops around new players etc etc is a more realistic and worthwhile cause to work to The only thing is players dont guarentee you success. As a very relevant example, look at the team we have now compared to the CL Qualifying team. The current teams players are better, cost more, get paid more in wages, yet have consistently finshed below 4th. Plus you only have to look at the likes of how long it took Man City & Spurs to get into the CL and they have both spent much more than we could ever generate! The fan share approach that Arsenal have is far better than putting an extra £100 on the cost of a season ticket. When it comes down to it, fans will not pay the extra in masses because there is no control over what the money is used for. Plus, I could imagine the majority of fans have other priorities to spend their extra money on rather than giving it (indirectly) to overpaid footballers. I agree with this in bold. Quote Link to comment Share on other sites More sharing options...
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