Man United

[Tyler]

their annual accounts are released tomorrow

 

interesting to see their operating profit

whatever it is it won't include the interest payments which are roughly 42m per annum

will the press mention this when analysing the numbers or just point to a great headline profit which doesn't tell the real story

 

for those of us who give out about merchandising and our failure to cash in on the liverpool brand, united also failed with this and flogged their brand to nike three or four years ago

at its peak it was a 20m business for them

[Kahnee]

Presumably the club still makes money out of shirts n such, though?

[Gunga Din]

i reckon they'll post record profits tomorrow

[stressederic]

i reckon they'll post record profits tomorrow

 

So do I. They won the league, gad a good run in the European Cup and got to the final of the FA Cup. In prize money alone, that'll help them out considerably. Add in merchandising etc and I imagine they're doing alright.

[Tyler]

no. united's sponsorship deal with nike also included united selling rights to merchandise to nike

 

united only made 2m profit on 21m turnover from merchandise

 

witness the various man united superstores worldwide that opened then closed

 

sometimes we hammer our club for not doing better but there is a misconception that united's merchandise and branding was a big success

 

fact is it wasn't

 

if profits tomorrow as announced are less than 40-45m then united or more importantly glazers are actually losing money on the deal

[RP]

no. united's sponsorship deal with nike also included united selling rights to merchandise to nike

 

united only made 2m profit on 21m turnover from merchandise

 

 

That sounds alright (and I assume that you made the figures up anyway?? Maybe not?).

 

And Nike obviously paid a huge sume for the rights.

 

Could you try and be a little more blinkered please? Thanks.

Edited January 10, 2008 by RP

[Tyler]

nope - figures are not made up

 

not sure how its blinkered

 

my point was that there is a popular misconceptio that united were hugely successful in commercialising their merchandising and they weren't really successful

 

secondly, most analysts believe (on any valuation model) that the glazers overpaid for united by about 250m - they paid approx 790m for it

 

operating profit or EBITDA which will be the headline figure tomorrow won't take account of interest which is approx 45m a year

 

maybe clubs are being bought with an eye to potentially being able to sell each game on tv or over internet but other than that difficult to see how united's income will grow by 80% as per glazer business plan

 

they'll prob post profits in region of 75m but this will be before in interest, depreciation and amortisation

so real profit closer to approx 5m

Edited January 10, 2008 by Tyler

[Tyler]

also compare against forecast ebitda of 89m for 2007 and 107m in 2008 from when they took over

 

if these numbers are not achieved then hedge funds have certain rights which kick in

Edited January 10, 2008 by Tyler

[Cobs]

if these numbers are not achieved then hedge funds have certain rights which kick in

can they kill Placcy?

[Tyler]

don't think so

 

may affect transfer budgets though

[Barnesy_10]

from the beeb

 

 

Success boosts Man Utd's finances

 

Manchester United have moved to the top of the UK's football financial league after reporting record turnover for 2006/07 of £245m ($481m), a 27% rise.

 

That puts them ahead of the £200.8m reported by Arsenal for last season, but behind Real Madrid of Spain, whose turnover was £263m for the same period.

 

Pre-tax profits rose 93% to £59.6m, as United won the Premier League.

 

The club, which says it has 333 million fans worldwide, also reached the FA Cup final and Champions League semi-final.

 

Those cup runs, during the second year of the Glazer family's ownership, helped to boost media revenues by 35% to £61.5m.

 

An update on the club's debt and interest repayments - the Glazer family borrowed heavily to buy the club for £790m in 2005 - will be made in the spring when the Glazer company accounts for Red Football are lodged.

 

Last May the annual interest payment was £62m, and in the autumn a club spokesman said debts continued "to be comfortably serviced by the business".

 

 

 

Chief executive David Gill said full houses at Old Trafford, plus the increases in media and sponsorship revenues "combined with team success to produce a substantial financial improvement".

 

"I am confident that the uplift in the Premier League television deal, together with our new sponsorship sales structure will enable the club to continue to increase its revenues and profitability to provide support to the team's quest for further on-field success," Mr Gill added.

 

Details of the new sponsorship structure, driven by the recently appointed commercial director Richard Arnold, have not been revealed.

 

But a spokesman said the club was looking forward to improved financial figures next year - when the results of an improved TV deal will come into effect - on the proviso that there is continued success on the playing field.

 

Manchester United once again disclosed the total payments made in the year to players' agents - £2.1m in 2006/07 as against £1.8m the previous season.

 

The club said it was the only one in the Premier League to reveal its payments to agents, and said other top flight teams should follow suit.

 

 

The extra seats afforded to Arsenal following its move from Highbury to the Emirates Stadium had been instrumental in the large rise in the club's turnover, as matchday revenues boomed.

 

At Manchester United matchday revenues were up 30% to £92.6m, reflecting the expansion of Old Trafford to a larger capacity of more than 76,000.

 

The £245m turnover figure is for its overall business, but Manchester United points out that more than £200m of that figure was for its core football activities.

 

The club said it had reduced its wages-to-turnover ratio to 43.6%, well within the 50% set by the Glazer family as a long-term aim.

Edited January 11, 2008 by Barnesy_10

[Maldini]

The club, which says it has 333 million fans worldwide

hahahahaha

[Guest 70400]

I would love for Tyler to explain how the ownership structure of United's (i.e. debt/equity mix) 'may affect transfer budgets.'

[Tyler]

I am not precisely sure of the debt/equity mix as the glazers refinanced some of the monies this year but effectively there are financial targets and milestones built into the financing documents

 

if these are not reached then financiers have certain rights which kick in - these range from taking control of the club to veotes on certain spending which would include transfer spending

[sutty]

Apparently 44% of the turnover goes into the players pockets and that percentage is probably better than ours

 

The logical extension of this is that I am giving Dirk Kuyt 20 quid a week, Mike is giving Leto 20 quid a week and Big Wayne is giving Jonny Rockets 20 quid a week.

 

I found this thought annoying

[Tyler]

their ebitda of 79m is short of the target of 89m and well short of where they expect to be in 2008 - 108m

[Stevie H]

Apparently 44% of the turnover goes into the players pockets and that percentage is probably better than ours

 

The logical extension of this is that I am giving Dirk Kuyt 20 quid a week, Mike is giving Leto 20 quid a week and Big Wayne is giving Jonny Rockets 20 quid a week.

 

I found this thought annoying

lol. it's like 'sponsor a player'.

[Coyler]

The £245m turnover figure is for its overall business, but Manchester United points out that more than £200m of that figure was for its core football activities.

 

The club said it had reduced its wages-to-turnover ratio to 43.6%, well within the 50% set by the Glazer family as a long-term aim.

 

I don't get this. Why are they making a differentiation between the core football activities and the overall business and does this have anything to do with the wages ratio being way, way below what was a "longterm aim" already?

[Spion kop]

Big ground = big money!

[John am Rhein]

I would love for Tyler to explain how the ownership structure of United's (i.e. debt/equity mix) 'may affect transfer budgets.'

 

Bet you'd love to have won 5 european cups as well.

 

face it, you're inferior subhuman vermin.

[whitewidow]

I would love for Tyler to explain how the ownership structure of United's (i.e. debt/equity mix) 'may affect transfer budgets.'

 

The "mix" and structure will set the tone for the targets for business growth and by extension monies available for anything (including transfer budgets etc).....

 

Anything more specific than that is supposition - unless you happen to work for Och-Ziff et al or one of their advisors (who will push the covenants on their deals on their behalf) and therefore know all the covenants, targets, dates and penalties.

[Ahmed Dimwitson]

their ebitda of 79m is short of the target of 89m and well short of where they expect to be in 2008 - 108m

¨

 

FFS - you are ridiculous, please tell me you are a financial advisor or something.

 

Take a look at the below paragraph:

 

Manchester United have moved to the top of the UK's football financial league after reporting record turnover for 2006/07 of £245m ($481m), a 27% rise.

 

That puts them ahead of the £200.8m reported by Arsenal for last season, but behind Real Madrid of Spain, whose turnover was £263m for the same period.

 

Pre-tax profits rose 93% to £59.6m, as United won the Premier League.

 

___

 

The turnover is merely 245 millions and of that they haveve a pre-tax profit of nearly 60 million i.e. after financial items, that is f***ing amazing figures. It appears to be a highly profitable business and a money making machine. Been in audit quite a while and it certainely is rare to see a companies profit being 1/5 of its turnover.

 

They clearly activate the transfers fees though.

Edited January 11, 2008 by Ahmed Dimwitson

[AE]

¨

 

FFS - you are ridiculous, please tell me you are a financial advisor or something.

 

Take a look at the below paragraph:

 

Manchester United have moved to the top of the UK's football financial league after reporting record turnover for 2006/07 of £245m ($481m), a 27% rise.

 

That puts them ahead of the £200.8m reported by Arsenal for last season, but behind Real Madrid of Spain, whose turnover was £263m for the same period.

 

Pre-tax profits rose 93% to £59.6m, as United won the Premier League.

 

___

 

The turnover is merely 245 millions and of that they haveve a pre-tax profit of nearly 60 million i.e. after financial items, that is f***ing amazing figures. It appears to be a highly profitable business and a money making machine. Been in audit quite a while and it certainely is rare to see a companies profit being 1/5 of its turnover.

 

They clearly activate the transfers fees though.

 

It is very good.

So wages are 43.6% ish? = £106 mil

Debt payments = £62 mil

Agents Payments = £2 mil

Profit = £60 mil

 

So running the stadium, police bill, hotels, match day costs etc and all other associated costs are £15mil

 

You are right they are very well run.

 

Oh and transfer fees, the erm £70m or so fit in were?

Edited January 11, 2008 by AE

[Tyler]

¨

 

FFS - you are ridiculous, please tell me you are a financial advisor or something.

 

Take a look at the below paragraph:

 

Manchester United have moved to the top of the UK's football financial league after reporting record turnover for 2006/07 of £245m ($481m), a 27% rise.

 

That puts them ahead of the £200.8m reported by Arsenal for last season, but behind Real Madrid of Spain, whose turnover was £263m for the same period.

 

Pre-tax profits rose 93% to £59.6m, as United won the Premier League.

 

___

 

The turnover is merely 245 millions and of that they haveve a pre-tax profit of nearly 60 million i.e. after financial items, that is f***ing amazing figures. It appears to be a highly profitable business and a money making machine. Been in audit quite a while and it certainely is rare to see a companies profit being 1/5 of its turnover.

 

They clearly activate the transfers fees though.

 

EBITA of 79m

We are told interest payments are approx 62m a year

Depreciation and amortisation is in region of 25m a year

 

Free cash flow is less than 5

true value of a business is ability to generate cash and not profits

[Guest 70400]

Bet you'd love to have won 5 european cups as well.

 

face it, you're inferior subhuman vermin.