Glazers hit by debt payment rise

[BBC Sport]

Manchester United's owners the Glazer family are hit with a steep rise in their annual debt payments after exceeding their limit on overall borrowings

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[King James]

Just sell the club already!

 

[Bodell]

I don't know why these Americans don't just leave. We've got them at Derby. I've not seen one of them to well. Just taking more and more money out of the club.

 

[sunilvk7]

Nothing new. It will increase year by year and eventually get to the point where Glazers have to sell with no other option. Some rich Billionaire will take over and clear the debts.

 

[Mike.]

Nothing new. It will increase year by year and eventually get to the point where Glazers have to sell with no other option. Some rich Billionaire will take over and clear the debts.

or they will keep sucking the life of out manchester first by selling our assets

 

[sunilvk7]

what does it mean ?

this might help, not my writing so i take no credit for it at all

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At the end of Q2 this year (January) it was:

Bonds : £540m @ 8.75% = £47m per year interest
PIK: £217m @ 14.25% = £31m per year interest
Total: £78m per year interest on £757m of debt

Assuming none of the PIK debt has been paid down then that £217m will have grown to around £237m right now:

This is what it will change to very soon.

Bonds : £540m @ 8.75% = £47m per year interest
PIK: £237m @ 16.25% = £39m per year interest
Total: £86m per year interest on £777m of debt


Basic cashflow breakdown to see how likely this debt can be serviced.

If they take the £70m plus their £25m dividend today to pay down PIk then the new PIK debt will be around £142m (bringing it back to close to what it was after the refinancing of 2006):

Bonds : £540m @ 8.75% = £47m per year interest
PIK: £142m @ 16.25% = £23m per year interest
Total: £70m per year interest on £682m of debt

Basically that £95m cash will have been used to pay off the interest that the PIK debt has accrued in the last few years.

Once that has been done the Glazers will then think that the debt is under control. The bond debt is fixed (some currency fluctuations because $250m of the bonds is in dollars) at around £47m interest. And by also taking their £25m per year cash dividend they can also pay the interest on the lower PIK debt.

So long as they can keep grabbing £70m a year, every year, out of profits then they can stop the debt growing any further and then refinance again in 2017. That's on top of their £10m per year management and consultancy fees of course.

We make enough profit to do that so long as we keep being succesful, so long as we keep more or less covering our costs in player transfers, so long as we keep a check on player wages, so long as TV revenues hold up, and so long as 76,000 mugs keep turning up every week.

By 2017 we'll have paid over £800m just in interest payments since the takeover, plus over £200m in other Glazer Costs.
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so by 2017, 12 yrs after the glazer takeover, the glazers will have bled over £1b (yes, one billion pounds) out of manchester united and more importantly out of the supporters pockets.
please note...that is JUST the interest paid + glazer costs. NOT one penny paid off the debt.

 

[Zebedee]

If the next tv deal breaks the collective bargaining arrangement, there will be no need to keep Manchester United within the top four in order to service debt.

 

[ErikAaquist]

I worry a bit reading this. Could it be a potential downfall for Manchester United unless the Glazers **** off within the next 7 years?

 

[MisterStubbs]

just **** Glazer's, don't you relise you are no longer ******* wanted here?

LUHG

 

[Mike.]

I worry a bit reading this. Could it be a potential downfall for Manchester United unless the Glazers **** off within the next 7 years?

there is a dangerously high chance of that yes. its a sad state of affairs in football in this country when we allow our two greatest footballing institutions to end up ike this

 

[ErikAaquist]

Ach, that's so absurd. ******* greedy ********.

 

[*Paul*]

Stupid Glazers, why don't they go and ruin some other club, like Everton .

 

[rephlex]

The club should stick Gary Neville on the board when he retires. The Glaziers have no chance of withstanding the wind-up merchant's non-stop complaining and starting arguments for the sake of it, and should sell within the year to escape Gary's "charm".

 

[Cal.]

I think the only solution is to call in Gazza to negotiate with them. They'd sell out ASAP.

 

[Mike.]

getting rid of the glazers will be brutally difficult, im not even sure it can be done before the damage is irreparable

 

[iNickStuff]

getting rid of the glazers will be brutally difficult, im not even sure it can be done before the damage is irreparable

It's going to be a long time before Manchester United can smell the roses again at this point.

 

[Chaz Sexington]

<3 Glazers!

 

[Scott]

Well this is what is wrong with yanks.

Apart from joe he is class

 

[eFusion]

If Man Utd is put up for sale(and that's a big 'if'), and Kenny Huang walks away from Liverpool, then who knows, he might bid for United. In which case, they'll be getting the £800m investment that was originally meant for us.:'(