UTD finances explained

This topic contains 9 replies, has 5 voices, and was last updated by  united_we_win 7 years, 2 months ago.

Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • #1418787

    concernedfan
    Participant
    • :

    A very simple to understand presentation about UTD’s debt and finances:

    #1418802
    MacGuffin
    MacGuffin
    Participant
    • :

    Interesting but fairly obvious that income has risen making the debt less of a problem. Even so it does not explain how United and top clubs can spend so much on players as a percent of income bearing in mind revenue is not profit, there are expenses.

    Another point.
    The video says that revenues 2005-2015 have increased 251% and TV revenues have increased 225%. This means our growth in 10 years has been not much more than inflation and industry growth. The Glazers were touted as super businessmen who would bring us growth but the growth would have come anyway. They saw it coming and rode the tide. Fair play they made money for themselves but have not done for United. Where would we be without them and with the billion pounds their ownership cost us.

    #1418806
    hatters
    hatters
    Participant
    • :

    The main reason why the club (and football clubs in general) can afford the huge transfers fees we pay relative to operating profit is staggered payments.

    Every deal is different but the vast majority of deals, especially the big ones, are paid off over 3 years.

    For example, I read an interesting article on transfers in the summer which explained that although the overall deal value for Mkhitaryan is 26 million, our initial payment was about 10 milliin quid with the rest being paid off over 3 years.

    Football player registrations, just like any asset a business might purchase, are purchased using a huge range of payment terms.

    #1418828
    MacGuffin
    MacGuffin
    Participant
    • :

    @hatters – Spreading payment still means it has to be paid. Lets take your example of payments being spread over 3 years. In summer 2014 we spent 145m. So come 2017 50m final installment must be added to the 1st installments of whoever we buy that year.

    Yes there is a small reduction in effective cost because the repayment is fixed but due to inflation and revenue growth it will be easier to pay. But the spending to profit ratio is still high.

    If you earn 35k pa of which 30k goes for overheads leaving you with 5k disposable income you can spend 15k on home improvement with a 3 year repayment scheme BUT you cannot do that every year because repayments will be higher than net income.

    Explain how it is done so I can go on spending spree every year.

    #1418834
    hatters
    hatters
    Participant
    • :

    @macguffin. I really would be lying if I gave you a granular explanation as to how it is done. My guess is there is a mixture of transfer payments being spread out over years, Ed signing on more and more sponsors to negotiate better credit terms on current accounts using swelling revenues, re-financing of principle debt, and possible investment activity. I am not from a finance background so I can’t really explain the neat little bean-counter tricks that keep us afloat.

    What I do know, though, is that these bubbles usually burst and I am certain that Mourinho has some money but will have to sell off some players and reduce the wage budget. Schneiderlin is already gone, removing Memphis, Rooney and Schweinsteiger for example would give Mourinho a hell of a lot more to spend in the summer.

    #1418846
    Alfie07
    Alfie07
    Participant
    • :

    In 2016 we made an operating profit of nearly £70m. That is after accounting for the transfers prior to that (in accounts the transfer fees are accounted for over the length of the players contract). Profit does not equate to cash, but we make huge amounts of cash each year which we can spend on players.

    I disagree with the statement that because revenues have increased 251% and TV revenues have increased 225% that it means our growth in 10 years has been not much more than inflation and industry growth. Revenues are separate to the TV revenue. The TV growth has been immense and is shared between the rest of the PL (and beyond in fact), we lead the way with revenue growth with our commercial deals and sponsorship growth – others follow though not always to the same extent and the fact that we lead gives us the advantage.

    Our revenue growth would have outstripped that of most other clubs – excluding those clubs set up to try and bypass FFP. (last section is badly worded, but you should get my drift)

    #1418956
    MacGuffin
    MacGuffin
    Participant
    • :

    @hatters – You cant give an explanation and neither does the video. I accept juggling payments saves some pennies but what about the pounds. Financial tricks and deferments dont make 90m Pogba cost only 9m do they.

    @Alfie – Yes we make huge amounts of cash, and we spend huge amounts of cash and players cost huge amounts. I’m looking for rough details and doing the maths. I’ll look at the accounts.

    As regards growth, my point is the Glazers were hailed as business whiz kids who, using their acumen, would make us richer. I’m saying we’ve got richer but thats in spite of the Glazers not because of them. Compare our growth the past decade with other clubs and industry growth. Its comparable. If its slightly more its because the United brand is more sellable so gains more. Our growth rate has not been much more (if any) than other clubs. Look at the Deloittes top 20 list for 2005 and 2015.

    #1419268
    Alfie07
    Alfie07
    Participant
    • :

    Another £70m growth in commercial revenue last season. Highest grossing club (despite poor sterling performance against the Euro).

    http://m.bbc.co.uk/sport/football/38655480

    #1419270
    Alfie07
    Alfie07
    Participant
    • :

    Dan Jones, partner in the Sports Business Group at Deloitte, said Manchester United’s record revenues were achieved by “phenomenal commercial revenue growth”.

    He added: “In recent years, their ability to secure commercial partnerships with value in excess of that achievable by their peers has been the crucial factor in enabling the club to regain their place at the top of the money league.

    #1419272

    united_we_win
    Participant
    • :

    Role on griezman next !

Viewing 10 posts - 1 through 10 (of 10 total)

You must be logged in to reply this topic.