In The Red – The Panorama Documentary
Well, I watched the Panorama documentary last night and, funnily enough, I didn’t think it was as bad as I thought it was going to be.
It was soooo one-sided that anyone with half a brain should have been able to see that it was basically a MUST propoganda film.
I’m actually more annoyed by the fact that I am forced to fund this kind of thing due to the TV Licence tax Fee.
Of course, the BBC made some attempt at putting it across as an impartial piece of documentary by saying on several occasions that they had invited certain people to comment such as the Glazers themselves, the FA and the Premier League but all had declined.
Which, of course, left the programme open to MUST activists such as Green and Drasgo to spout off as much as they wanted whilst the Glazers were substituted by silent but intentionally insulting and ridiculous garden gnomes.
Perhaps the funniest interview was with Drasgo who said something along the lines of “when the Glazers took control of Manchester United, they were given the keys to the vault and went in there with a forklift truck”.
He is still clearly in denial and doesn’t accept the fact that the Glazers do actually own the club.
The fact that the Glazers haven’t actually gone in with a forklift truck and helped themselves to Manchester United riches also seems to escape him.
No, where this documentary went wrong is down to the fact that even without Glazer input, they could, if they wished, have looked at the other side of the balance sheet. Oh yes, in case you didn’t realise (and if you were to rely on the BBC for your education then you would be forgiven), a balance sheet consists of TWO columns.
There has been an awful lot of money coming IN to Manchester United since the Glazers took over. That is kind of how they can afford to pay the interest on the debts.
No mention of this in the documentary.
Then we were shown a couple of the shopping malls that the Glazers own in America and they were pitiful. Empty lots and not a customer in sight. But they own more than a couple and some are making good profits. These weren’t shown or mentioned which was “unfortunate” because it might have provided a bit of balance.
And then we were made to feel even more resentment towards the Glazers because they “avoid tax”. You see, a natty little by-product of all these debts means that for the last five years, we haven’t spent a penny on corporation tax (something that is never taken into account by Andy Green when he puts out his “Cost of the Glazers” figures nor are the shareholder dividends or the salaries for the old Directors and other administration costs taken up by the PLC setup).
Ummm… again, that is part of the business model and the avoidance of tax is a consideration for ANY business-person.
Note. This is tax avoidance (legal) not tax evasion (illegal).
We were then told that in the last year or so they have sold one of their homes for $25 Million and one of their businesses for $75 Million… “Why?”, asks the BBC.
The inference is, of course, that they needed the money. What wasn’t mentioned was how much profit (if any) that they made on either of those deals.
If I had two homes, bought for £100k each and someone offered me £200k for one of them, I would probably sell whether I needed the money or not.
If I had a ton of businesses scattered all over the world and found that it was all getting a bit too much for me handle and someone offered me an attractive sum for one of them that I had perhaps lost a bit of interest in then I would probably sell.
Of course, with the Glazers declining to comment on these things all I and the BBC can do is speculate.
What it does show, however, is that contrary to what MUST have been saying all along is that the Glazers do have other means of raising cash if they need it without dipping their fingers into Manchester United coffers (or indeed driving a forklift truck into the vault).
Having said all that, I can’t sit here and pretend all is rosy under the Glazers. They are clearly feeling the pinch that the recession of the last couple of years has had on just about every business in the world and things do look a bit precarious.
However, I do find that I have a grudging respect for the Glazers. They have pulled off the most audacious ownership deal right under the noses of the whole world and, so far, have not only pulled it off but are making it work.
A perverse part of me wants to see this ownership played out to the end to see if they can pull it off in the long-term. I’m not happy that they are playing/gambling with my football club but so long as the team remains competitive on the field then I don’t really have a problem.
What I do want to see, however, is that they are given a level playing field and that is why I am against boycotts or season tickets and merchandise.
I want to see this debt reduced and eventually eliminated entirely as soon as possible and then see the Glazers take their cut of the profits each year and the rest staying in the club for player investment and ground development.
If we can do so well under the Glazers even with the debt, how well could we do once it is cleared?
As Andy Green is fond of saying… Time will tell…
Love United. BE United.
“A perverse part of me wants to see this ownership played out to the end to see if they can pull it off in the long-term… I want to see this debt reduced and eventually eliminated entirely as soon as possible”
So at least we now know where you’re coming from. Good to see which side of the fence people sit. You’re on both…. the Glazers and the deniers.
I’ll ask a simple question that requires a very simple answer.
Please explain how you expect either the club debt or the PIK debt to be reduced and what effect you expect that to have on Manchester United’s success on the pitch?
Your wish to see the debt eliminated has two major problems 1) There’s nothing in the business plan about debt reduction, 2) If United did, there is nothing in the coffers to ensure a successful team.
If you disagree show the figures that proves this wrong.
I’ve read all 322 pages of the bond document and there isn’t a single penny going into debt reduction at the club before 2017, just interest on the bond. Unless of course you mean the PIK debt, which is indeed probably going to be paid from club funds.
If the PIK debt is not paid by United – and the deniers keep saying it wont be – they’ll reach £600m by 2017, in addition to the £504m in bond debt. Where’s this £1.1bn going to be paid from then? Come on, surely a simple answer since you’re so confident United will be debt free under the Glazers.
Now let’s talk about revenues since you complain they were not addressed in the Panorama doc. The club itself expects this to be flat (read the bond doc and guidance) for the next few years. This leaves a simple equation. £95m operating income – £45m bond interest – effect of AON pre-payment = £42m free cash flow. If the Glazers take their 50% dividend (which they’re allowed to by the bond and you’re apparently happy with) that leaves the club with £17m per season to remain “successful on the pitch”. They’re also entitled to a further £6m in management fees per year.
If they don’t take a dividend there’s no PIK debt repayment and the debt builds. There’s still no bond debt repayment.
Most sickening is your “respect” for the Glazers’ “audacious” takeover. Speculative debt base leveraged buyout are not audacious, they’re highly risky for the business being taken over while reducing the exposure of the “audacious” acquirers.
Bet you have a shrine to Lehman Brothers too, right?
These great businessmen have seen the value of the Bucs fall rapidly (Forbes) off the back of a 3-13 losing season and a failure to sell out their games (Bucs own guidance), seen revenue before tax on their property business fall to just $9.7m (public documents) on the back of $500m debt (public documents), and loaded United with more than £500m debt (bond document) plus the £225m PIKS (Red Football Venture Ltd 2009 accounts).
yay! woop woop. the glazers are great.
how is it then, that despite playing in EVERY club game possible (FA Cup Final aside) that without the sale of Ronaldo, that we would’ve made a £40m LOSS last year?
this blog is so deluded it makes me hope that Rooney is sold just to see what kind of rubbish excuse/defence you’ll come up with then.
people like you are getting and will end up with exactly the kind of club you deserve.
@ United Rant
You make all kinds of assumptions about me in that comment, state them as “fact” and then demand that I answer those charges.
Talk about wanting to be judge, juror and executioner.
Firstly, I am not necessarily pro-Glazer but I AM anti-MUST/Red Knights. I think they are self-serving, attention seeking, trouble-causing, riot-rousing, truth-twisting people.
I hope that my position on THAT part is pefectly clear now.
You put a “simple” question to me (How do I expect the debt to be reduced etc) when you know full well that I don’t know the answer. I think you think I am Malcolm Glazer himself.
However, for what it is worth, I will add my opinion to the miriad others out there.
The bond is now in place and will remain in place for the foreseeable future. That part of the debt has now been “shelved” so to speak. The Glazers are satisfied that the 8% bond interest can be serviced from revenues generated.
The big issue is the PIKs.
Now, you again make an assumption that I am happy with them taking 50% dividend – I don’t recall saying anything like that but as you seem to know me better than I know myself, I will take your word for it.
Let us just say that they are now entitled to take that money. It doesn’t say anywhere that that they will, by the way, just that they could.
If they take that money as a dividend, it then becomes THEIR money.
If they choose to spend this money on a new house, a yacht or to pay off their personal debts then that is their business. It is not for you, me or David Gill to question.
Personally, I would like to see them take whatever they take as dividends to pay off those PIKs and get them out of the way ASAP and frankly, anyone who uses them as a stick to bash them with but at the same time denying them the right to pay them off is being grossly unfair.
I do believe that from the outset, Fergie was promised £25 Million per season for transfers and it is not difficult to see that this is quite easily achievable even with your (Andy Green’s) figures (maybe they will take less as dividends if there is a shortfall in order to fulfill their promise to the manager).
Bear in mind though that these figures could increase in the coming years as sponsorship and TV revenues increase.
As for my “respect” for the Glazers, I did actually say “grudging respect”.
I don’t like the fact that they have loaded debt onto a previously debt-free club but yes, I do think they must have balls the size of Old Trafford itself to do what they have done.
The only reason others haven’t tried it is not because of some airy-fairy “morals” which would prevent them from doing something similar, it is because they either didn’t think of it or the thought of dealing with debts into the hundred of millions would mean that they wouldn’t get more than five minutes’ sleep at night.
At the end of the day, only time will tell how this all unfolds. We were led to believe by MUST five years ago that Manchester United were doomed and all we have seen since then is possibly the most successful five years in the Club’s history.
I cannot predict the future and neither can you, Andy Green or the Glazers themselves.
The fact is however that the Glazers currently own the club.
Anyone who comes in will have to pay more for the club than the current debt and so we will be in a worse situation than currently.
And that’s the problem with the anti-Glazer protests. They are not going anywhere, no one will buy them out at the current valuation and the Government has no right whatsoever to get involved.
Turn up at the games next season waving the wrong coloured scarf if you must but I think you’re pissing up the wall with that.
As for the Lehman Brothers – never heard of them.
@ algernon radish
I think you will find that even Andy Green went to great lengths to stop MUST from reporting that United would have made a £40 Million loss without the sale of Ronaldo because it simply wasn’t true.
Don’t ask me to explain it – it involves financial boffinry far beyond the scope of my meagre brain (contract amortization and other such fascinating stuff) but if you go to Andersred Blog, you will find the explanation for it somewhere because that is where I read it.
As for being deluded… hmmm…
The Glazers own Manchester United. Fact of reality.
Waving green & gold scarfs will change this fact of reality. Delusional.
The Glazers as owners are entitled to take a “wage”. Fact of reality.
The Glazers should never take a penny from the club. They should run it out of the goodness of their hearts. Delusional.
The kind of club I would like is one which is debt-free and run by an owner who realises that in order to maintain the value of his investment, he has to ensure that the club continues to be a success on the pitch (the big sponsors don’t want to be associated with a loser). Given time and a fair crack of the whip then I genuinely believe that we have the potential for this under the Glazers.
@Red Devil
Mate, this is my first time on your blog. You replied to a comment of mine there on ROM (yes, MUST have their faults, but I assure you, while i’ve nothing against the Glazers personally, or even as business men, it is their ownership of United that has caused all this mess and it is them I am angry at) but completely off topic anyway, I’ve looked around your site and while I don’t agree with absolutely everything, I enjoy it. It’s nice to have another place for perhaps a different opinion. I’ll be back mate. Cheers.
Cheers Promised Land. I had a quick run over to your blog after reading your comments on ROM and I like it and have bookmarked it.
I did like your post on ROM. I think it sums up a lot of people. Not necessarily anti-Glazer but not pro-Glazer either. Just PRO-Manchester United and the desire to just watch the bloody football and enjoy the game without worrying about PIKs, Bonds, Interest and all the crap that football fans watch football to escape from!
I don’t expect everyone to agree with everything I write on here. As you say on your own blog. Everyone has an opinion and football is full of them.
It would be boring if it were otherwise!