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Post by Busby Boy on Jul 11, 2006 22:45:41 GMT
Rewd, it seems Red4Life didn't understand our new learning techniques...I think we're going to have to make him our first pupil! ;D
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Post by missunited on Jul 11, 2006 22:45:45 GMT
I think the worry a lot of people had with this though, was the fact the debt is being secured against club assets, and if ticket sales drop and that income becomes unstable then we could be in trouble. As said though, I don't know much about the financial stuff, so could be wrong. The current debt is secured against clubs assets. The loan in question would very likely be secured against tickets sale. Any loan taken up by a football club will be secured against the assets of the club in one form or another, unless it is a privat loan by the owner. United would be in the long term be better off owing money to a company who will have an interest in keeping the club going, such as the RBS rather than J P Morgan's high interest option which could be much more dangerous for the future of the club. |
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Chris
United Bench Warmer
Posts: 968
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Post by Chris on Jul 11, 2006 22:51:48 GMT
Rewd, it seems Red4Life didn't understand our new learning techniques...I think we're going to have to make him our first pupil! ;D I understood the first bit fine, you didn't go on to explain what happens if you couldn't pay your mate back  Missunited, thats makes sense then but im sure those in opposition will come out with an arguement against it, be it not enough funds for transfers or us becoming the next Leeds. |
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Post by redom on Jul 11, 2006 22:54:35 GMT
as i understand it the current debt being secured against club assets mean if things were to go tits up then whoever we owe the money to would take control of the club and be able to sell off different parts of the club to regain thier money i.e. players, stadium etc. so with this new proposal being dependant on ticket sales what would the consequences be if things went wrong?
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Post by missunited on Jul 11, 2006 22:56:08 GMT
Rewd, it seems Red4Life didn't understand our new learning techniques...I think we're going to have to make him our first pupil! ;D I understood the first bit fine, you didn't go on to explain what happens if you couldn't pay your mate back Missunited, thats makes sense then but im sure those in opposition will come out with an arguement against it, be it not enough funds for transfers or us becoming the next Leeds. Well the oposition is bound to come up with reasons why it will all go wrong for us, they aint got much better to do. It's easily explained... like if we cannot pay J P Morgan, then they will just say sod off and let the club go bankrupt. However with a lower interest loan with RBS, which we will most likely be able to pay, they would be more interested in negotiating with the club and making sure we'd stay where we are financially because it would be in their best interest as well. |
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Post by missunited on Jul 11, 2006 22:58:42 GMT
as i understand it the current debt being secured against club assets mean if things were to go tits up then whoever we owe the money to would take control of the club and be able to sell off different parts of the club to regain thier money i.e. players, stadium etc. so with this new proposal being dependant on ticket sales what would the consequences be if things went wrong? If that is the way they decide to secure it, the repayments will come from the ticket sales which is a constant and reliable income. If something was to go wrong, say we wouldn't earn as much money as expected, chances are RBS (as an example) would negotiate a new deal with United as it would be in their best interest as well as the clubs. A company as RBS knows you can earn money over time, whilst J P Morgan is more interested in a quick buck. |
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Post by redom on Jul 11, 2006 23:14:41 GMT
ok so they would be more likely to help united find a new solution to making repayments instead of just demanding their money with the threat of selling off club assets to make that money, but hypothetically if the glazers were unable to pay off the money they owed and there wasn't another solution would it still come down to RBS gaining control of the club as JP Morgan would now and being able to sell off what they want to get thier money? so in other words the debt is still secured against club assets but the repayments are dependant on ticket sales which as you said are a constant and reliable income for the club, im just tryin to understand the worst case scenario.
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Post by Busby Boy on Jul 11, 2006 23:28:23 GMT
I understand it's very hard not to think of the worst case scenario and I was like that before but you have to realise Manchester United are not only one of the biggest football clubs in the world but also one of the biggest brands in the world, the merchandise we sell yearly is more than some clubs would sell in ten. Manchester United, unless of a major collapse, will always sell and will always make money.
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Post by missunited on Jul 11, 2006 23:29:11 GMT
ok so they would be more likely to help united find a new solution to making repayments instead of just demanding their money with the threat of selling off club assets to make that money, but hypothetically if the glazers were unable to pay off the money they owed and there wasn't another solution would it still come down to RBS gaining control of the club as JP Morgan would now and being able to sell off what they want to get thier money? so in other words the debt is still secured against club assets but the repayments are dependant on ticket sales which as you said are a constant and reliable income for the club, im just tryin to understand the worst case scenario. Worst case scenario would probably be RBS gaining shares in the club, which they would be unlikely to sell like J P Morgan would do. Try looking at it like this... if we borrow money from a bank for the club, then that is the same as that bank owning a part of the club. If we don't manage the repayments this just becomes official. It is very unlikely we won't manage the down payments though, and we are currently managing fine with the loan agreement that is in place with J P Morgan. However the club (read as the glazers) will save money over time by re financing. The chances of United getting into financial troubles either way are small. |
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Post by redom on Jul 11, 2006 23:53:41 GMT
alright then i was just tryin to get a clearer picture of what this re financing COULD mean for the future of the club, i realise that looking at the worst case scenario may seem pessimistic but i wasnt suggestin that this will happen as if any club is able to handle this amount of debt i suppose its united i was just curious as to whether this new loan would siginificantly change the consequences if we were to fail with repayments  . cheers anyway now lets get back to increasing that debt and buying those 2 world class players  |
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Post by Carlito's Way on Jul 13, 2006 15:14:05 GMT
The new loan is a replacement for the two 250 million loans we have already. It means that the 250 mil loan with loan sharks, sorry hedge funds, at 20% interest will be replaced by one at 6% interest. If it comes off it will be the best news we've had since the Glazers took over.
As far as I can see, because Utd would not release their trading numbers when Glazer bid for the company, he was not able to get a loan for the whole 500 million he needed. He took a 250 million loan on the assets of the club and another 250 million at loan shark interest rates because of a lack of security. Now that he has the club and clearly the club finances and because the club's financial position has apparently improved over the last 12 months they're trying to get a fully secured loan of 500 million over 25 years at 6% to replace the two 250 million loans with Utd's future earnings as security.
That would mean interest payments of only around 30 million a year - the sort of money that a 750 million plc would expect to pay out in dividends.
So let's pray it comes off.
One thing that may not be too good - I don't know if the lack of any real transfer deals over the last 12 months is responsible for our improved financial situation. It would explain the lack of any news out of OT about new players and might suggest this will continue until things have been sorted out.
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