Sir Alex Ferguson has effectively ruled out any new signings at Old Trafford this summer, declaring that he is happy with his squad and that the club’s younger players will be stronger than ever. In an interview many will see as code for United’s financial problems, Ferguson also denied a United bid for Wesley Sneijder last week.
It’s a subtle change in excuse for United’s lack of transfer activity, with Ferguson consistently defending the Glazer regime by declaring that no value exists in the transfer market over the past year.
This comes despite Ferguson being starved of funds after the sale of Cristiano Ronaldo for £80 million a year ago. Since Ronaldo’s exit Sir Alex has spent almost £40 million on Antonio Valenica, Mame Biram Diouf, Gabriel Obertan, Javier Hernández and Chris Smalling but received a combined fee of £14 million for Zoran Tosic and Ben Foster.
Under the Glazers’ declared business plan on takeover in 2005 £25 million net would be made available to Ferguson per season, meaning the Scot should have more than £100 million to spend this summer*.
Indeed, the last accounts published by the club showed £95 million cash in United’s bank account. But the January bond issued by the club enables the Glazer family to remove all that cash, with most analysts expecting that to take place at some point in the next financial quarter.
Perhaps even more puzzling than the club’s economics is Ferguson’s assertion that “another year” under his younger players’ belts ensures that the group will be stronger in the coming season. That might be true but there are no guarantees with younger players and few spent much time in the first team last season.
Of the younger group only Johnny Evans started more than 20 games for the first team, with Darron Gibson and Rafael da Silva each starting more than 10 games. Federico Macheda, Gabriel Obertan, Mame Biram Diouf, Danny Welbeck, Fabio da Silva and Ritchie de Laet hardly featured. Meanwhile Anderson, now into his third season with the club, had gone backwards before a winter knee injury ended the Brazilian’s season.
Indeed, United has more ageing starts likely to play a significant part in the new season than younger players, with Edwin van der Sar, Gary Neville, Ryan Giggs and Paul Scholes approaching their final seasons at the club. Each of the quartet started more than 20 games for the club last season, with the United’s average starting age actually one of the oldest in the Premier League.
In all likelihood United will enter the new season with the current squad. Smalling will add an extra, if totally unproven, body to Ferguson’s defensive options, while Hernández will hope to replicate his World Cup form in the Premier League. It’s a very tough ask for both players.
Perhaps even more important is Ferguson’s decision – albeit forced by the club’s financial predicament – to begin the new season without a creative heartbeat to the team. After all, Scholes’ decent end to the season masked increasingly inconsistent performances from the 35-year-old midfielder for most of the campaign.
The Scot will also hope that Rio Ferdinand’s injuries end, Michael Owen stays fit, Dimitar Berbatov finally proves he is a £30 million striker, Wayne Rooney doesn’t break a metatarsal, the young players grow up and Giggs, Scholes,Neville and van der Sar can roll back the years just one more time.
As they say – hope is no kind of strategy.
69 thoughts on “Fergie ends transfer talk with focus on youth”
I love fergie, but I hate his transfer policy. Sometime down the line he must throw the cards on the table. We have no money, and our squad is insufficient. To many old players, despite them being legends.
noooooooooooooooooooooooooo how can u do this to us for god sakkeeeeeeeeeeeeee :@:@@:@::@:@:@::@:@::@:@.
We will end worse then last year
United are going to struggle, finishing 5th behind Chelsea, Arsenal, City and Spurs is not impossible. The Glazer’s will milk United to pay for their problems back home, the old players won’t be able to cut it any more and the young ones are not good enough. Fergie won’t be able to coast any more, he will have to work hard and cope with pressure like he has not for 20 years. All empires come to an end and its time Uniteds did.
To pessimistic an article. We have a great youth system and should give them there shot next season. That way we can use some of the 90 million to secure our fiscal situation, and chuckle at Barca when the enter economic meltdown along with the rest of an almost bankrupt Spanish nation.
P.s. As for Man city – 2014 homegrown system will end their overtly lavish behaviour.
I second Maximus. The only way the younger players will step up is by being thrown at the caolface competing week in and week out.
I said this before and will say it again, i’m totally content to have a trophy-less season if it means we secure our future squad via the younger players stepping up.
Its about time SAF stopped insulting the intelligence of the supporters. We have been ripped off by the yanks and I wonder how he would feel if they asked him to give some of his salary towards their upkeep. If he really thinks that the ordinary supporters swollow the c*** about no value for money and funds available then he is out of touch with them. He is happy to go along with the charade because he will be quitting soon and its who ever that follows him that will have to rebuild and have very little funds to do so. This team is playing from memory and if a few injuries occur this season to key players then we could struggle to make the top 4. I wonder where that will leave the great Glazer plan for world domination. Unfortunatly it may take something like that for the majority of the supporters to eventually create enough of a fuss to get rid of the yanks.
even sir alex rule out signing any players ‘ still the same -> ( we dont have the chance win the title back ) i have the feeling we might end up at 3 – 4 place !!!!!! in debt and no money !!
“That way we can use some of the 90 million to secure our fiscal situation”
Do you even register how outrageous that statement is?
So experts predict that the Glazers will remove the allowed funds this quarter do they?
You mean the same experts who predicted they would have taken them last quarter?
Or the same experts who since 2005 till the Bond issue have been claiming that the next year will see the Glazers removing the funds they were allowed to under the borrowing agreement which they never did?
The problem with so many of these experts is they are either on MUST’s books or have a stake in MUST’s agenda, an agenda that at its core cares about the organisation of MUST rather than the supporters they claim to represent or the club they claim to support so their claims are often extreme and are always pure guesswork (And nearly every claim has yet to actually happen)
If you actually talk to people from the business world in the states they will actually tell you that paying off some of the bonds is not actually the obvious move that it would seem and infact they shouldn’t pay them off at all until they mature due to the way that the tax system works in the states.
I do personally believe they will like any owners take the money at some point and that some of this will obviously go towards paying off the PIKS BUT its certainly no where as clearcut that it will go out this quarter. And its also hard to get up in arms with them even taking the money when you live in the real world and realise any business owner is looking for a return at the end of the day (Cities Rich owners haven’t given them free money for example, they have just ok’d city to spend money that they don’t have using their riches to prevent the banks getting up in arms. And even when they wiped out the debts they just did what Abramovich did at Chelsea and pay off the external creditors but in return awarded preferential shares in return that pay a set dividend each year and will when the clubs are sold either need paid off by the new owners or will have to continue to be serviced
I agree with everything you say, however the point of the matter is that the Glasers took and are taking money from the club to finance their bad businesses in the US. This is hot running united as a business but taking from it to cover bad losses else where. If united was run as a stand alone business it would generate enough revenue to finance new investment in the team each year and still make money. The problem is that the yanks are using the money that supporters spend on the club to finance depth that they raised else where. Man Utd supporters are not interested in shopping malls in the states. A fair share of money generated should go towards spending on the team. Wheres the 25 million net per year that was promised.
Please show me WHERE in the accounts MUST’s claims that the Glazers are taking money out of the club to finance so called bad businesses else where?
Oh wait you can’t because the only money withdrawn are the normal and relatively small management fees of £10mill over 5 years for services rendered (Every business will have these going to directors for services they render to the business. The PLC had these) and the £10mill in Director loans (which are loans not money being taken)
Even their bad business’s in the states are being blown out of proportion. Real Estate and Retail are two markets that were hit very hard by the financial crisis so they have been hit on two fronts their personal liability on each property is limited and those struggling to be profitable in the current climate are better off going to the wall rather than using profits from elsewhere to prop it up because you will quickly throw more money to keep it going than your liability is and the chances of making the money back from the weaker ones becomes difficult even when the market gets back to pre crisis levels. Consolidating the holdings to focus on the ones that even in this crisis are making massive profits makes perfect business sense and is exactly what most companies that got bloated during the good years is doing to make them better businesses. The more worrying thing would have been if the group as a whole had made a loss meaning that they were all making a loss.
I would also like to add that there is more cash in the club DUE to the complex structure with the club being an asset of a holding company because the holding companies non-cash deductions such as Goodwill deductions actually save the club massive amounts of tax that would have to be paid from the cash in the club
The Glazers property business made $9.7m profit on almost 100% debt/equity ratio last year. United’s “massive” group profit in 2008/9 was about £6.4m despite the sale of Ronaldo. We’ll get the annual accounts for 2009/10 at the end of August.
As for the Glazers removing cash – the last quarter they hadn’t but they will. If not answer this question – why double your interest rate when the only benefit you get is being able to remove cash, if you don’t then enact that benefit? Because that’s what the Glazers did. If they don’t eventually pay down the PIK debt using club cash they’ll have doubled their interest rate for no reason at all.
I agree that they will take money out, but they should, they are business men not philanthropists. They are going to use whatever means to milk to the cash cow that is our club. Since they haven’t gone overboard yet and Fergie seems okay, i say hold on to your guns. No sense jumping off a trapeze without a safety net and I don’t see one.
The problem is people like you either
a) Don’t understand
b) Are intentionally ignore things
The profit figures you are talking about are those of the holding company. The holding companies accounts are structured in a way to INTENTIONALLY make a loss so the profit generating part (ie the club) is saved from paying tax.
The majority of the deductions made to achieve this are non-cash deductions, Goodwill being the most significant deduduction.
Also due to the way the club was bought where the Glazers took out the personal PIK and then ‘invested’ this money into the holding company to then use to buy the club there are book deductions for the interest on the PIK’s which lower the holding companies profits further.
More cash has been kept in the club due to this than would have otherwise because the club hasn’t had to pay the nearly 90mill tax bill the would have been liable for
On the property business, first of all any retail or property business (let alone one that’s both) that made a profit last year is doing well. And then whats being forgotten is this profit was made despite a number of them making losses. Some of the centers are ones that in a good climate make a positive but not spectaule contribution but like most companies its these which become a liability in this kind of market. Its why the Glazers like a lot of business’s are choosing to let their weaker ventures goto the wall as the financial liability in doing so is low and its better than throwing your profits from elsewhere to keep them going.
As for the interest rate. First of all they HAVEN’T doubled it. Once again its the Anti Glazer crowd trying to push idiotic MUST agendas with lies. Its a 2% rise and it doesn’t change things massivly in the grand scale of things. Its what £4mill which yes is a lot for most of us but in a business sense its not a major differece and there are tax benefits for them in the states as the interest charges is a tax shield. Its why you see United paying off the Intrest they are due to pay yet the Glazers are rolling up the interest on the PIK’s. In the UK it makes sense to atleast pay off the interest and if you can pay down the debt a bit, in the States it can make more sense to rollup interest and not pay off the debt until in matures
The money being withdrawn from the club is to cover the depths that the Glazers raised on the club. They had no money to buy the club so they raised the money based on the business. The business is profitable because of the fan base which supports the team. The team is successful because of funds generated from fans which in the past was used to buy the best players. The only reason united are still competing is due to the management of SAF. However the team which wom the CL has not been reseeded and the present team is only a shadow of that team. The star players are either sold or are older and no replacements of similar quality are available. All the talk about money being made available is c***. Work out how much revenue utd generated since the Glazers took over, how much money came in from player sales and how much has been spent on players. Do you need a set of accounts to figure that out. In the past utd spent 30 million on a central defender and no one thought about value for money then. Based on the present value of money, how much is that 30 million worth today. And yet the supporters are told that the best midfielders at this years world cup are over valued at much less that this. I always thought that over time and with inflation that things got more expensive?
Oh ffs… another pseudo financial know-it-all, that reckons us plebs need a lesson in “real world business practice”… great… feel better?
Go on Mate… tell us all how things really work… and just ignore the fact that most of us don’t give a shit… because to be honest, we just want our club back the way it was… debt free… preferably without those parasites making one red cent.
oh well, life’s a little sneakier in the real world though….
The youth can only develop if they are given chance and I would rather they be given chance and go one season trophy less than buy big names. Why does it take young players in manutd long to develop? Where are the Mullers of Manutd?
I agree with you Alfonso Bedoya about the claim of “want “using 90 million to secure our fiscal situation ” being outrageous and wanting our club back..debt-free..I respect all the different opinions. All this sudden talk about relying on youth is same policy at the Glazers nfl team Tampa Bay Bucaneers when Joel Glazer denied claims they were cheap owners but said they had a policy of developing youth as against signing stars (Remember how United had a signing when we just lost the league to be a catalyst for the team in the following season but its different this time).Also fans there think Glazers not are spending on their team is because money is being spent on United.! What happens at the Tampa Bay Bucaneers can be a guide as to what may happen to United…high ticket prices causing tv blackouts , alienation of fans ,appointment of a rookie coach (read that as cheap)etc. What gets me is how our clubs money is being used to pay off all of these debts and this will affect our on- field performances in the near future .Thank you Ed for the article. Another thing ,in a strange way, ,Citys spending may have helped us as its woken some of fans up to the problems this debt is causing us just as the bond document did the same .
Its a pity to see a club like man utd to finish in the fifth place next season. Utd fans do not deserve this and rather deserve more respect from the part of sir alex, his staff, and his players. Without fans ,man utd would not have been existed even now if the club belong to the glazers. At least bring on sneijder to raise the morale of the fans. Just imagine for a moment fans do not buy their tickets, i don’t think sir alex and his family and the glazers will run the club. It is a fact that in modern football you should invest to be successful. Are you going to count on youth and to finish like arsenal. Common sir alex if you can’t take the challenge you better go for good of the club and the fans….
you stupid know nothing protesters need to grow up. we have the money but fergie knows we dont need to spend and in his time at united he has bearly everspent big or done lots of business in a market. this haves nothing to do with our financies which is in good shape despite those glaazers and thier stupid debt (barcelona do-u know, the club ran by fans-is in finanacial ruin ad neede a €150m loan just to pay wages……..sommething we dpnt have to do because we are alright, fact).
we have a fantastic team and greatly talented youth, we have always been about developing our own stars and bearly ever splash out on self labelled or media labelled big name players, there is no one out there better than what we bave at the club and ayone who thinks different are bitter delusional abus or gloryhunters. we are the biggest and most club.in football with the greatest manager of all time in sir alex ferguson. back the club or just leave, believe in united. we will regain our premier league.
we have the youth, we have the superstars, we have the overwhelming strenght in depth, we have an upcoming season where we will regain our title. show some faith in this magnificent side you claim to support.
we are the biggest and most famous club in football. no matter what the glazers d we will always be at the top and be successful, unless protesters succeed in their misson to ruin us out of spite – but the protesters will never succeed in that as we are to big and successfil and the glazers will never be able to ruin us either no matter their idiotic debt. we are manchester, we are united, we are manchester united, the biggest and most famous club in the world.
Yes that’s right aj – people protesting against the Glazers want to ruin the club out of spite. These fans just want to destroy the club they love for the heck of it. Get real.
Its not out of spite its out of ignorance and due to letting MUST push their agenda which ISN’T about the good of the club onto you.
While there is justification for some concern MUST have used it and people lack of understanding to push an agenda that is damaging the club. Then by jumping into bed with the Vultures that the Red Knights are that were only interest in getting the club cheap to make mass profits and were willing to do anything to get it cheap (Including constant lies to us fans) has really shown MUST up for what they are, a power hungry group who are concerned only about getting power for their own reasons rather than wanting to ensure then represent the fans.
uttam-jug. you stupid know nothing glory hunter, fergie kows more about the game in bis litte finger tba your gamestation can tell you so sbut up and piss off. sir alex ferguson is god and hopefully never leaves.and stays forever, you do can run along gloryhunter back to your real club. we will win the league next season and to say we will be 5th sbows whag a sad gloryhunter you really are as all real supporters know we will win back our league ttle or at worst, come 2nd. sir alex is god, believe.
I don’t think uttam-jug is a United fan – but even if he was got to say I’m pretty fed up with commenters questioning another fan because they criticise club policy. As it stands I think this United squad will struggle next season. Not 5th but not champions either. I’m no glory hunter – I just believe that’s a realistic assessment of our current squad and the relative weakness is down to lack of investment in the squad. It’s great if Ferguson wants to bring young players through – after all only four (Evans, O’Shea, Brown, Fletcher) have become regulars in the first team in the last decade. But the truth is he’s only saying this because he’s got no money to spend. And that’s the Glazers fault.
Anyone who moans bout sir alex transfer activities knows nothing, for a decade he has used the no value line when being ripped off, for the best part of his time at utd he has done little moves in the market with one or two improvements, and ever since he arrived, sir alex have put the faith in the youth so either back the club or jog off and suppor a new club.
those who support glazers ‘ then pay up the debt !!
Those who support must, stop trying ruin our club out of selfishness and try suppporting the club, dump the publicity seekers and back the red devils or go away if hate us that much as it is you who trying do the damage.
You keep repeating this line aj but exactly how is MUST trying to “ruin the club”?
it not abt support the club.. we alway support the team whenever they play well or bad.. everybodys worry abt the debt. if you speak out for glazers then why not u and others support glazers and pay out the debt instead doing nothing !!!!!
The money issue aside, has any of the big PL teams other than city splashed the cash? No. Why? THERE IS NO TRUE VALUE IN THE GAME RIGHT NOW. We have signed two ten million quid players. Is that not enough for you? It was a few years ago when Vida and Evra came in. Are they not good enough to play for us? What’s up with these so called United fans moaning about a lack of a big name signing? We will do what we always do, buy young and create stars. Two years ago we all had high hopes for Kiko and Anderson. THEY HAVE TO PLAY TO DEVELOP. Bayern had 6 players in the Germany squad. Mostly youth and full of talent. And they have groomed them to play. This is the modern era. Not billionaire cash. Reality has set in for true clubs. For all Chelsea’s cash we have still won more trophies recently than Abramovich’s boys.
Schmeichel, Cantona, Bruce, Pally, Ole – not big name signings.
Ronaldo – not a big name.
Nani and Anderson – not big names but big prices.
Evra and Vidic – not big names.
Forlan – not a big name but we should have kept him lol.
Berbatov – 30 mill of wasted cash.
Hargreaves – Big name + big shame. We love him but he won’t play again.
Carrick – Big name – not good enough under pressure.
We will be there or there about top once more.
They do have to play to develop. Actually my point was that Ferguson didn’t play them last season. The older generation played a lot more than the kids. Perhaps it will change in the coming season and we’ll see how good they really are. The difference between United’s younger players and Germany’s is that the latter have actually performed at the highest level. Can’t say the same about Gibson, da Silvas, Macheda, Welbeck etc just yet. Let’s hope we’ll be able to say that in a year’s time.
As for value. The only value that used to count was winning trophies, now its about ensuring minimum expenditure. Ferdinand, Veron, Rooney, Berbatov – hardly represented value but United spent the money (sometimes successful, sometimes not) because the club believed investment was important in complementing a strong academy. The strategy is now different.
I think u are a spin doctor. I read many paragraphs of your article and they seem to be lifted off rom others. I bet you don’t have much insider information and all u r writing is based on 1/2 truths or worst still doctored stuff. You make me laugh with your article. lots of shit and rubbish sad to say.
Peter – If you’re making a charge of plagiarism you’d better come up with some evidence of that. You won’t because its not the case. Agree or disagree with the opinions, but this site has been about original writing for the past six years.
Ed is original you fuck muppets…..ffs, plastics chatting shite…it’s slmost like the glazers PR companies posting to drum up plastic support.
Facts are, we are in the shit, we have no money and Fergie wont play the kids (even though he says they are the reason we wont spend) as he knows they are not good enough.
This. In a nutshell.
I couldn’t agree more. Some of these people seem like Glazer plants
Those fans calling for senseless spending are plain stupid, imagine after the world cup fans are calling for the sign of Mesut oezil who is only 21, if Bremen don’t play him how did he grow, buy this buy that are this players not human beings? pls lets Fergie graduate all the youths lets give them two years in the premiership after that we can sell some and replace places that need. Ronaldo C played some useless football for four years before becoming a star, Flecher becomes a regular when he turns 24, lets give this boys a chance and we can make another 90m off real madrid, I am tipping obertan, diouf, macheda, king, to cost 120m each in the next 3 years. However all said, Sneijder can’t go wrong, he is a toughie the united way since we did not get david silver
Reminds me of Alan Hansen “you’ll never win anything with kids” statement, it just hope and pray that whoever wrote this ends up looking as stupid as he did at the end of the 95-96 season.
I think Fergie might have got sick of letter the young players leave only to find them going to win Champions League and the World Cup, he must be kicking himself for letting Pique go, the lad is class, looking more and more like Rio everytime I see him play, great passer, reads the game, hardly ever caught out of position. Then there’s Forlan, best player at the tournament. I for one will be glad to see the young crop of talent come through.
Well come on that’s not what I’ve said – this bunch of ‘kids’ is unproven and haven’t been played. I’m with youhough t I really hope they come good and win everything. Honestly though, I don’t see this crop as being as good as the class of ’92. Hope I’m proven completely wrong!
The ones coming through now might not be, mainly because we have a generation missing I feel where we would have had one or two gems, a few years ago we released pretty much our entire youth team! If we had kept Rossi and Pique alone that would have gone someway to strengthening the current team.
I think going forward that Pogba, both da Silva’s, Macheda, both Evans brothers, Cleverley, Josh King, Eikrem, Petrucci, Cathcart, Amos, Possebon, John Cofie with the addition of Hernandez and Smalling is an excellent pool of talent to call on in a couple of years, maybe not next season for all of them but I think 6 of the players above could see a good deal of action next season, ok not in the champions league but certainly the domestic cups and some of the “lesser teams” in the league.
There are so many ifs and buts about kids making it. Possebon looked very promising a couple of years ago, got a horrendous tackle and seems to have lost his nerve. Macheda burst on the scene but, injuries aside, seems to think he can run before he can walk. This time last year SAF suggested that Welbeck could make the squad for South Africa…..
SAF himself said many years ago that he ruined the careers of several young kids at Aberdeen by playing them too much too often. My own father told me that the sudden and unavoidable promotion of kids after Munich in 1958 ruined many promising prospects.
Some kids, Norman Whiteside and Rooney for example, are ready at 18, others take far longer.
In years past SAF liked to talk about ‘freshening up’ his squad, to prevent complacency. Even when he had possibly his best every midfield 4, Becks, Scholes, Keane and Giggs, he signed Veron. When Ince was at his peak he signed Keane and played him at full back for a while.
All this talk of no value in the market, happy with the squad, does not add up. Why cant SAF just say, we are skint, need to trust in the youngsters, at least that would be honest.
I haven’t commented on his reasons for doing so, I’m just glad that he is.
He has freshened up the squad a little with Hernandez who looks to be a very good buy anyway I don’t think Fergie has done too well over the years with big marquee buys, I would sooner he bought the likes of Evra and Vidic who you must admit didn’t jump out as obvious world class players, had you heard of them? I have said on other bloggs I would rather have a team of players who want to be at United, let City buy who they want, as soon as they have a few bad results they’ll be sulking, moaning, wanting to go out on loan. look at Chelsea, 30m shevchenko, 23m Crespo, 18m Veron, 13m Paulo Ferreira the list goes on, how much did they get in return for these guys? £84m spent, £0 in return. So when fergie talks about lack of re-sale value I would suggest it is this sort of thing he has in mind. Oh yeah and lets not forget Jo, I bet you had, hadn’t you? 19m how much of that will they get back?
Both these clubs would without doubt go bust within days of losing their owners where as United would have a number of potential suitors, who would buy City and pay back their owners for what has been invested? Same to be said for Chelsea.
Chelsea’s spending was scattergun and in many ways so is City’s. That’s not a sensible transfer strategy but I’m not convinced United’s is either. The best, most successful strategy is a mix of strengthening when needed and bringing through youth. United’s transfer strategy is solely limited to buying at the bottom of the market right now. I don’t see any sense investing in players for no reason but to not strengthen the squad simply because United can’t afford it makes as little sense either. It’s the new financial reality we’re in.
What we will have is Arsenal without having sold the likes of Henry, Viera, Pires.
Let’s just face it, it really isn’t good business sense for a football club to spend the amount of money that City, Chelsea and Real Madrid will. Add to this that UEFA rules in 2013 will mean that all football clubs will have to live within their means and United will pull away again as few other clubs could compete with us for what we would be allowed to spend under the new rules, it would be us Arsenal & Real who would be in the best position then. City would struggle unless between now and then they go and buy a few billions fans around the world and build a stadium to hold 75,000, same for Chelsea.
By then United will have tapped into the mobile markets they are going for now and will be raking in millions from selling United ring tones and what have you via mobile phones in Asia and Africa.
I am always optimistic, having said that I thought England had a slim chance of wining the world cup!!
Fortunately I’ve read the UEFA document in depth and it is not designed as a correction for debt but to stop sugar daddies. So yes United would be in a position of incredible strength – if it wasn’t for the Glazers. United’s profits are halved with interest repayments, then the Glazers start taking out dividends, management fees and loans. Point being United’s free cash is *very* small. There’s also the provision for a net debt ratio of 1:1 with revenues. United doesn’t meet this so in theory UEFA could kick the club out of the Champions League, although I very much doubt it.
But I do laugh when people cite the Glazers spin that the club will make billions from “mobile phones in Asia and Africa”. Really? ARPU (Average Revenue Per User) outside of Western markets is rarely above $5 a month and spending on content is a pittance. If you search for my name you’ll find I’ve actually written several reports on this topic. I’d be happy to tell the Glazer family but doubt they’d listen to me 🙂
People aren’t going to be spending millions on United content. They don’t now. MUTV is a loss-maker.
More to the point the Premier League sells these rights collectively in one package to overseas users so the club can’t just go sell its own content even if it wanted to. This is a total non-starter.
maybe glazers can’t afford buy real madrid that why they bought manchester utd !!! it very silly of borrowing money from bank to buy manchester utd .
@ Quinius Maximus. Are you even on the same planet? Use the 90 million to secure ‘our future’? The only way that applies, genius, is if you happen to be one of the Glazer’s, moonlighting on here under your chosen nom-de-plume, and are referring to the mountain of debt your family is foundering under both at home and abroad. The money the Glazer’s are looking to service under the terms of the bond issue is their PIK debt, which is their financial anchor, not United’s. They are stripping United’s coffers to service their own personal debt.
WE HAVE NO MONEY !!!
UNITED HAVE NO MONEY TO SPEND !!!
GLAZER TAKE OUR MONEY FOR THEIR BUSINESS !!!
NEXT SEASON ????
AS A UNITED FAN, I WISH THEM TO FINISH AS LOWEST AS POSSIBLE.
SO, GLAZERS WILL BE FORCED TO SELL THE CLUB….
WITHOUT GLAZERS, UNITED CAN BE THE BEST AGAIN.
To say that Asia’s don’t spend much on mobile I think is a little way from correct, China in particular are one of the largest users of mobile technology and other far eastern countries are used to gauge western market response to new ideas. Whilst not in % terms purely by the size of the country the market there is huge, next thing you’ll say is that we don’t have the fan base out there? United fan based is estimated at 71m in China, these sales are never going to bring in huge margins and are purely about volume. Africa I agree would be someway off from seeing any return on investment, even with the “World Cup Legacy”.
Also with regards to United selling of their own brand and merchandise via mobile technology: I fail to see how any agreement the premier league may have could prevent us selling and promoting our own brand? Also the agreement allows any club to exploit any rights that have not been sold by the Premier League or used by the purchaser of the agreement, this will be reviewed in 2012, it also only covers live footage and highlight packages.
I would like to point out that I don’t like the Glaziers either, I’m just not a doom and gloom merchant. Manchester United is a Super brand (37th 2009) and it is that which in my personal opinion the Glaziers wish to exploit. I really hope that one day we’re all sat here wondering what all the bother was about, I wonder how many fickle fans would hold their hands up and say they were wrong? No doubt they’ll all say we knew it would be alright.
Wakers – put a dollar figure on it then. How much will United make from overseas content markets? Because I’m telling you now ARPU from mobile/Internet content outside Japan is negligible. More to the point the only content that commands any value in all the key markets United might want to exploit is live/re-broadcast premium content sold as a package via the Premier League. Ringtones/wallpapers – no money at all. We can argue if you like but I’m right on this and well published.
It’s the argument that was made about United’s commercialisation in previous years. “Look at the millions of fans” – today less than 1% of United’s revenue comes from overseas non-media spend. Truth is the football business is a quirk when it comes to “brands” – it’s almost impossible to monetise football outside of media rights (sold collectively) tickets (unless Old Trafford is going to miraculously expand there’s no more to come here) and commercial deals. The Glazers have done well to exploit regional exclusivity – think Turkish Airlines, South Africa wines and all that – but there is a ceiling. Even the Glazers own bond doc accepts they’re near the top of that one.
Point being United might be a “superbrand” but revenues are puny in comparison – not anywhere near 37th biggest, probably nowhere near 3000th biggest in the world – because it’s impossible to monetise the “brand value” in the way you espouse.
I think it’s worth noting that the reported profits for the Glazers’ privately held businesses aren’t very relevant at all. United is no longer a publicly held business; whereas publicly held businesses have a major incentive to maximise reported profits, privately held businesses have quite the opposite incentive. Reported profits in that context are usually just throwing money away to the taxman. This is true for United and for the Glazers’ commercial property business. All those “expenses” such as management fees and so on are simply a way of keeping profit away from the taxman.
The fact is that the Glazers are free, within legal constraints, to take money out of United or put it back in as much as they please. Therefore the club could have no money in the bank and still buy players if the owners make the money available. The fact that the club is currently sitting on a big pile of cash suggests that the Glazers are leaving there for PR reasons, or because it will probably be re-invested in the club in the near future, perhaps on new players.
I don’t claim to know if the Glazers’ long-term model for the club will work out or not, but I do think it’s pointless to seize on relatively arbitrary data points such as a private business’ reported profits in order to “prove” a pre-determined conclusion (i.e. that the club has no money). The owners can’t hide the state of the club’s revenues, and those at least are better than ever. After that point, like any private business, the club’s primary concern is to hide as much money from the taxman as is legally possible.
The Tampa Bay Buc’s precedent is not reassuring, but I draw comfort from the fact that the business fundamentals of football are completely different to the NFL: the NFL is a cartel, it’s quite possible to starve a club of investment and still make decent money out of it, as it can’t be relegated to a lower league. Football is the opposite: if United drops out of the top 4, it could theoretically enter a financial death-spiral. The Glazers seem to know this.
I’m always amazed how people post here pretending to be experts when they get the analysis so completely wrong. In the United States there is no law governing reporting of private business accounts as there is in the UK. So there’s no need for the Glazers to hide any profits from their US property business at all. Quite the opposite with their assets mortgaged at almost 100%. Indeed, the reason we know their lack of profitability in the US is the court filings from all the foreclosures (repossessions) on their strip malls. So the “arbitrary” data point of the Glazers’ US profits is absolutely key. Without these profits the only source for paying down the £225m PiK debt, accruing interest at 16.25% from August, is United and therefore no money spent on new players, contracts not renewed and possibly player sales. Get it now?
You’ve completely missed my point. Reread my post and tell me where I talk about financial reporting obligations (hint: I don’t).
But since you’ve decided to respond to my post with seriously misplaced condescension, I’m not going to bother discussing this with you.
Awww. Toys, pram… bye!
That sentence “whereas publicly held businesses have a major incentive to maximise reported profits, privately held businesses have quite the opposite incentive.” I didn’t mention obligations either. Call it “incentives” if you like. Really makes no difference in this case. Problem is, you are wrong when it comes to the Glazers’ US biz. Call it condescension if you like, but truth is you just lost the argument and stomped off in a huff.
He didn’t lose an argument because you choose to ignore the point. The point he mad was that while a Public company has reasons to enhance their profit levels for reasons like Share price a private company its about lowering the profit levels on the books to reduce their tax liability.
If as a private company you can hide profit in legal ways using non-cash deductions which keep the cash the business has in the orangistation rather than giving it to the taxman then its better.
And you keep banging on about the Glazers property business not making a profit. What you are forgetting is that we are not talking about a business that’s making a loss across the board. There are some of them making a loss and dragging the rest down in the grand scheme of things.
We should also remember that while the reported profits were $9.8mill that only tells half the story. Thats the combined amount from the whole group. However each center is completely separate so the amount of money they actually made in the year will be higher as a loss doesn’t take money out of the other centers. Infact as the worst performers the Glazers are choosing to let them goto the wall rather than funnel significant amounts into them to keep them going the amount of money actually being made will almost certainly be significantly higher than the reported figure
Unless we buy two or three players we won’t win anything.
Well, let me add one point.
Some players we have must step up in ways I do not think possible. So yes, the last line about “hope” is totally applicable. We need a midfielder and a striker. And with Rio down for the count, we probably need a centre back as well. But I see no trophies if we don’t buy.
Ed you seem to have forgotten shirt sales etc.. I’m confident that we make a bob or two there.
It’s all by the by anyway, I get the impression that you are just one of those fans that will never be happy. Did you used to write lots of things about the days of United being a PLC? Have you complained about every take over ever discussed for United? You will no doubt want the club to be run by the fans just like Barcelona, then we would be in trouble. We could always float again and see what that brings.
The other thing with regards to the clubs debt is that I feel the mortgage they have on the club as long as it remain below the value of the club whilst not ideal can always be covered should they sell up, most of us have a mortgage, we invest in our houses to maintain or increase the value and the Glaziers I feel will do the same.
So you can stop putting words in my mouth – everything I write on United is on this website, so go take a look if you want to know my opinion on club ownership. The Barca model is a good one bar it promotes an arms race. Fans always demanding more purchases, pressure on the president to deliver. What’s far better is a model where the fans have a stake – significant such as in Germany – and financial fair play regulation is enforced.
As for shirt sales once against you’re badly misinformed. Not for the first time I might add. United has a fixed term, fixed price contract with Nike for shirt sales. In any case only a small percentage of shirt sales – I saw a recent stat on this in the New York Times – outside the UK are officially licensed products so even if United could profit from a huge increase in sales most fans in growth markets by black market goods.
The mortgage analogy really is way off. This is a better analogy since you want to go down that route. You owned your house, somebody came and bought it off you but is still making you pay the mortgage interest without ever paying off the capital. Worse they’ve decided to dip into your bank account to pay off the mortgage on another house as well. They promised some house improvements but instead sold off your kitchen and the bathroom and made you live in an ever ageing house. Still with me?
No Value out there??? We had Real eating out of our hands when they wanted Ronaldo!! why didnt we ask for Sneijder and Robben plus 50 or 60 million!! Take it or leave it??? they would have gone for it and we would have had 2 of the best performers of last season!! Sneijder went too Inter for 12 million????? Now we are reported as wanting him for 30 million??? I called this last summer , surely someone at the club could have seen this as well??
Ed are you suggesting United was owned by the fans prior to the Glaziers then? The PLC which in case you forget were also complained about time and time again and I don’t recall Magnier and McManus being that big a reds nor that popular.
I’m really not trying to get at you, I’m just a bit sick of hearing fans complaining about this, I have never heard anything positive about anyone who has owned, or wanted to own the club, be that Edwards, Murdoch or Knighton although it now seems most would be happy to back to either of these previous owners, one day we might think the same about the Glaziers, you never know.
Not matter what the structure of Manchester United there will be a lot of United fans unhappy, who would ever buy a business for close to a billion and not want to get some return on it? Anyone who invests that kind of money will want something in return, it’s just the way it is. Very few people exist who can throw away £1bn on a hobby, the few that do already own another club across town and but for what they’re spending we would not be so unhappy with what we have.
No – the term “you” is relative to the analogy. The “you” being the club in this case. People were unhappy with the PLC but we got a fans forum, the option to buy shares (35,000 did) and a seat at the AGM. Yes, people were unhappy with Edwards too, and frankly he did almost nothing but almost bankrupt the club. As for the Glazers – they’ve loaded the club with £722m debt. Even Martin Edwards wouldn’t do that.
But I guess I don’t get your point – you want me to be positive about the debt situation? The best I can do is… at least we’re not Scouse.
Lol Ed, or Barcelona, couldn’t pay the players wages last month and had to take out loan, could be Pompey, Leeds, the list goes on.
I would like United fans to be positive that United are still here, still in champs league, finished a very close 2nd to a team that have spent 100’s of millions, finished well above another that has trillions in the bank, got further in the champs league than a club that spent 250m on about 5 players.
If united never bought another player as long as I live I will still support them and so would you. We are like children who have had it all for a while and who’s dad got made redundant and are now watching the other kids have their day and it’s not nice, but there are kids still far worse off than we are.
@ Walter, I agree with you, we could have got Robben and Sneijder last season, in fact we could have had our pick on their squad, with hindsight they would have been great purchases, but few people would have bet on Bayern having the champs league run they had and the same could be said for Inter. At the start of the campaign they were both outsiders for the competition.
I might be wrong but the fact that fergie didn’t do a deal like that would suggest he didn’t want them rather couldn’t afford them.
Ed, we’ll have Liverpool’s fate. (probably end up 6th or 7th). Fergie thinks he can still pull out a miracle (again) but we are heading fast out of top four. But let’s face it when “you pay peanuts you buy monkeys”