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Post by Karma on Sept 16, 2020 5:32:51 GMT
It was painfully obvious that top 4 was the target every season in 2018. Solskjaer should do a Mourinho and come out swinging. It would be of greater impact because of his status. He won’t though. That’s one of the reasons they hired him.
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Post by kstandhand on Sept 16, 2020 6:30:25 GMT
It was painfully obvious that top 4 was the target every season in 2018. Solskjaer should do a Mourinho and come out swinging. It would be of greater impact because of his status. He won’t though. That’s one of the reasons they hired him. It's the very reason they hired him,crowd control & that he was cheap. A cheap yes man,something LVG & Jose were neither of!
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Post by kstandhand on Sept 16, 2020 10:13:34 GMT
Jadon Sancho: The Circus Strategy Football Bureau of Investigation Football Bureau of Investigation Follow Sep 15 · 8 min read
Manchester United’s media circus papers over debt-driven inertia Clockwork. Another summer, another excruciatingly dull Manchester United transfer saga. The starring role this summer has, of course, been awarded to Jadon Sancho. Lucky him. This might just be the most peculiar sage yet, for it is not remotely clear whether a bid has actually been placed. Rather, this has been a strange, circular media circus — an awkward, noncommittal dance — for the best part of two months.
Here’s the first punchline: Manchester United never wanted to wrap this up quickly — the media circus has been strategic. Ole wanted new players before the start of pre-season. Admirable; a true football man. But not remotely intelligent from the perspective of Ed Woodward and his merry band of financiers. Ole’s at the wheel, but he doesn’t get to choose the car. Right from the start of the summer, the Club’s strategy has been to consciously drag its heels through this 3-month window. To avoid fan outrage at the lack of urgency in the market — let alone the lack of tangible outcomes, the Club has happily orchestrated this seemingly never-ending media circus. If anybody is in any doubt whatsoever that the finances of a football club trump footballing strategy nine times out of ten, look no further than this as the archetypal example. Money rules this game.
The reason that the Club has elected to hide behind a frenzied media story is simple: money concerns. With every week that has gone by, the club’s accountants have been better able to assess the financial impact of the COVID-19 pandemic. With revenues falling, the question has been — and continues to be — to what extent costs have fallen in tandem. Important, too, is for how long this dynamic goes on. If revenues fall by more than costs, cash flows out of the door (“cash burn”). Bad news for club finances. The longer that this cash burn goes on, the trickier it is to justify spending more, particularly on wages.
To the external observer it may seem that Manchester United have been clueless in their approach to business; lost at transfer-market sea. From the Club’s perspective, however, they have been highly rational. Club financiers have been biding their time, cautiously assessing the lay of the land. At this stage, though, it is correct to question why Manchester United have been more cautious, and as a result more sluggish, than just about any other team in the Premier League. Indeed, Manchester United were, at one stage this window, the only Premier League side to have not signed a single player. Here’s the second punchline: Manchester United have backed themselves into a debt-dictated corner such that they have had little choice but to be more cautious than just about every other football club. More important than the magnitude of the debt pile is the terms and conditions attached to it. In borrowing from the financial markets, Manchester United has made certain contractual promises to its lenders. Where other debt-free clubs have significant flexibility to manoeuvre as they wish, Manchester United face unavoidable constraints. They — or more specifically the Glazer family — have tied the Club’s own hands by having to abide by certain rules imposed upon them by their lenders. These rules are known as ‘covenants’.
Manchester United has debt in the form of “Senior Secured Notes”. These are bonds, issued to debt investors, that are essentially very well protected in case anything goes wrong. If Manchester United were to go bankrupt, it would be the holders of the Senior Secured Notes that would recover their investment (specifically, the amount that they are owed) more quickly and with more certainty than any other investor. Part of the protection that covers Manchester United’s lenders — those investors who bought Manchester United Senior Secured Notes — are ‘covenants’. There are two types of covenants: ‘general covenants’, which basically keep Manchester United behaving as the lenders deem appropriate (e.g. no leftfield business mergers or acquisitions), and then there’s the far more impactful ‘financial covenants’. This financial covenant, in our opinion, explains much of the seemingly inexplicable behaviour exhibited by Manchester United in this window.
This financial covenant — this protective legal clause — requires Manchester United to maintain a minimum level of profit. This exact clause is unique to Manchester United. Here, the definition of profit is ‘EBITDA’: Earnings Before Interest, Tax, Depreciation and Amortisation, which represents the profit from which its lenders can be paid the interest that they are owed. The financial covenant requires Manchester United to generate a minimum rolling 12-month EBITDA of £65mn. Essentially, every three months, Manchester United’s lenders will tally up the previous 12 months of profit (“EBITDA”) and test to see whether the total amounts to more than £65mn. If it does not, Manchester United are in trouble. The worst case scenario would be bankruptcy, and as a result the loss of the right to compete in the Premier League. The Club is very much aware that avoiding this is paramount. Here’s the third punchline: as time has gone on and the circus strategy has continued, the Club has become increasingly concerned that it will breach this financial covenant as it has become increasingly clear that profitability is severely challenged. This is why there has not been a marquee signing. This is why Manchester United have not signed Jadon Sancho. Every club in England faces financial difficulty, but not every club has to follow rules set by numerous financially-significant lenders. Before we go on to show the details on exactly why Manchester United are fretting that they might breach their financial covenant, allow us to first frame the impact that debt-based corporate strategies are having elsewhere in the league. The most heavily indebted club in the Premier League is Tottenham. They have spent just £30mn this window on players that will not strain the wage bill. Everton — the third most indebted club in the Premier League (after Manchester United in second place) — have spent just £42mn this window. Why? Because debt-laden clubs have debt investors to answer to. In the current climate, lenders are worried about the outlook for football clubs. As a result, heavily indebted clubs simply cannot behave like lowly indebted clubs such as Chelsea or Manchester City.
Now — brace yourself — here come the financial details on why Manchester United are increasingly worried about achieving this £65mn EBITDA minimum. First, revenues are declining because of a lack of Matchday revenue. Merchandise revenue is also likely to fall at the margin, given the more challenged economic backdrop and the discretionary nature of merchandise purchases. Luckily, however, the Club managed to secure Champions League football for the 2020/21 season, supporting revenues through the FY21 financial year.
Against these falling revenues, costs are likely to remain broadly flat. Let us first assume that the Club is unable to shift any of its current players, thus keeping the salary expense flat.
The combination of falling revenues and a relatively flat cost base is not good for EBITDA generation. Unless the cost base is reduced, Manchester United will most likely breach its covenant towards the back end of the 2020/21 season. As time has gone on, the Club’s financiers have undoubtedly become all the more concerned that profit will dip below this legally-imposed floor, and have therefore become increasingly unwilling to make salary-increasing signings.
Here’s the fourth punchline: to avoid confrontation with its lenders, Manchester United must decrease its wage bill. A signing like Sancho is simply impossible before other overpaid and underplayed squad members are moved on. This is where the consequences of a debt-fuelled strategy are amplified by what is, seemingly, Manchester United’s inability to operate efficiently in the market: if Manchester United’s salary bill was taken down to even the level of the next-highest salaried squad — Manchester City — the financial covenant would most likely be avoided, given that this would trim outgoings by c£5mn or quarter, or £20mn every year.
Furthermore, on paper, there is no reason why this shouldn’t be possible. Were Manchester United able to sell those players that are surplus to requirements, the Club’s wage bill would quite comfortably be brought down to the same level as Manchester City’s.
In effect, therefore, if the Club could find a way of selling these surplus squad players, there would suddenly be breathing room vis-a-vis the £65mn EBITDA covenant. In fact, on our numbers, it would leave the Club with sufficient room within its cost base to pay Sancho a salary in line with Marcus Rashford’s £200k/week without triggering the all-important covenant.
Therefore, despite the Club being effectively beholden to the lenders from which it borrows, there are undoubtedly actions that the Club could take to transition a marquee signing such as Sancho from the realms of the impossible to the entirely plausible. What is surely infuriating for Manchester United fans is that Woodward, the Glazers and their spreadsheet squad are on the one hand not making any further signings through fear of upsetting their lenders, yet on the other hand, they are not taking any action that would appease their lenders and strengthen their financial position. Rather, as it stands, the Club appears to be stuck in a state of pure inertia. Too concerned about their finances to take a step forward, but equally too inept to take mitigating action on its cost base. The result is that very little appears to be happening. For as long as Manchester United remain trapped in this limbo — for as long as they feel cornered by their covenants on one side and their wage bill on the other — it seems that the only strategy that the Club has been able to conjure up is a constructed media circus: pump up the rumours and let the fan base fuel their own misplaced optimism. Back in April when Ed Woodward said that this summer would not be ‘business as usual’ for Manchester United he was not being a master tactician. He was telling the truth. Knowing that inaction was simply not acceptable to the fan base, however, the rumour mill started to churn. Until Manchester United reduce their wage bill and give their lenders a greater degree of comfort, the circus strategy is here to stay. At present, it might be the only thing keeping fans from mass mutiny. Football Bureau of Investigation Delivering deeper football insights
Football Bureau of Investigation
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Post by Stew on Sept 16, 2020 10:56:28 GMT
Reading that, I now wish we’d lost to Leicester on the final day of the season.
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Post by kstandhand on Sept 16, 2020 11:01:35 GMT
Reading that, I now wish we’d lost to Leicester on the final day of the season. It makes grim reading tbh & also a lot of sense/reason to why this window is another one of bluff,bollocks & dare I say it OGS excuses in coming
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Post by ratbag on Sept 16, 2020 11:05:50 GMT
Reading that, I now wish we’d lost to Leicester on the final day of the season. If it would have got rid of the gimps then I am right with you... If only we could find a scarily rich person / organisation to buy us from those leeches...
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Post by Karma on Sept 16, 2020 11:07:11 GMT
Reading that, I now wish we’d lost to Leicester on the final day of the season. Now you know why I would have took relegation.
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Post by Bestie on Sept 16, 2020 12:03:04 GMT
Reading that, I now wish we’d lost to Leicester on the final day of the season. If it would have got rid of the gimps then I am right with you... If only we could find a scarily rich person / organisation to buy us from those leeches... When we're bankrupted over 65 million in debt against 600+ million in revenue the gimps will be gone.
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Post by ratbag on Sept 16, 2020 12:23:17 GMT
If it would have got rid of the gimps then I am right with you... If only we could find a scarily rich person / organisation to buy us from those leeches... When we're bankrupted over 65 million in debt against 600+ million in revenue the gimps will be gone. Can't happen soon enough...I really don't care now what it takes (even relegation) but they need to be gone...
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Post by kstandhand on Sept 16, 2020 12:34:10 GMT
When we're bankrupted over 65 million in debt against 600+ million in revenue the gimps will be gone. Can't happen soon enough...I really don't care now what it takes (even relegation) but they need to be gone... We'd all take that today, if it were a way out surely??
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Post by ratbag on Sept 16, 2020 12:39:03 GMT
Can't happen soon enough...I really don't care now what it takes (even relegation) but they need to be gone... We'd all take that today, if it were a way out surely?? Not sure...relegation is a biggie for any football fan...and can you imagine if we didn't get promoted in the first year like we did last time? In any case, it's probably moot as even in my worst nightmares I can't see relegation happening but regular mid-table is a possibility and that should severely affect revenue and then the gimps might sod off...
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Post by caino on Sept 16, 2020 13:08:47 GMT
insightful.
but also covers what we have been saying for ages.. get rid of the deadwood and have a plan to move forward.
theyre just incompetent, useless, horrible, ugly weasels. a parasite of a family
knowing how they operate, does anyone think they make players/managers sign NDA's to avoid having bad press
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Post by Karma on Sept 16, 2020 16:47:56 GMT
Yeah but tbf there were some on here who thought Jose should be doing better with what he had. Maybe he should have but the warning signs were still there. Too many bought the cultural reboot shite. It’s given the Glazers 18 months of breathing space.
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Post by JamBritRed on Sept 16, 2020 17:34:09 GMT
Jadon Sancho: The Circus Strategy Football Bureau of Investigation Football Bureau of Investigation Follow Sep 15 · 8 min read Manchester United’s media circus papers over debt-driven inertia Clockwork. Another summer, another excruciatingly dull Manchester United transfer saga. The starring role this summer has, of course, been awarded to Jadon Sancho. Lucky him. This might just be the most peculiar sage yet, for it is not remotely clear whether a bid has actually been placed. Rather, this has been a strange, circular media circus — an awkward, noncommittal dance — for the best part of two months............. Football Bureau of Investigation Thank you for posting this. It has somewhat soothed my spirit seeing how close to the brink those fuckers are to triggering these clauses. One of the few positives to come from COVID i suppose. If having the stadium closed for another 12 months will be the difference between them making it or falling afoul of the covenants then im sorry lads, i say keep it closed. I cant imagine that, along with missing out on CL qualification will be something the club's finances will be able to overcome.
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Post by Bestie on Sept 16, 2020 17:34:42 GMT
We'd all take that today, if it were a way out surely?? Not sure...relegation is a biggie for any football fan...and can you imagine if we didn't get promoted in the first year like we did last time? In any case, it's probably moot as even in my worst nightmares I can't see relegation happening but regular mid-table is a possibility and that should severely affect revenue and then the gimps might sod off... Meh. The Championship seems like brilliant fun to be honest.
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