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+--- Thread: Glazers, Bond Issue and Debt (/Thread-Glazers-Bond-Issue-and-Debt)
RE: Glazers, Bond Issue and Debt - Noucamp99 - 22-01-2010
When Real Madrid’s new President Florentino Pérez announced his massive summer spending spree, the first thought I had was: How can Real Madrid afford to sign superstars like Kaka and Ronaldo? They are not owned by a Russian oligarch or Arab sheikh, so where does Real find the money to outspend everyone?
The reason is Real’s massive revenue stream. Deloitte has named them the richest team in the word for the last four seasons (Manchester United is second) with revenues of €366m (£290m). One large source of revenue is gate receipts. Real have the third-highest average attendance in Europe.
Another huge revenue stream is Real’s TV contract. In 2006, Madrid they signed a seven-year deal with MediaPro guaranteeing €1.1 billion for their domestic league TV rights. That works out at about £135 million a season from their domestic league rights, which is more than twice what United receive.
Another advantage that Madrid has over its European competitors are the tax laws in Spain. Spain’s tax laws mean foreign players pay tax at about 23 percent for the first five years that they are in the country. So if Real wants to pay Kaka £8 million after tax, it would cost them about £10 million a year, whereas it would cost Manchester United £16 million (thanks to the new 50 percent top marginal rate in England).
Over five years, that’s a difference of £30 million on just one player. Multiply that £30 million by three or four players and it is easy to see why Real can afford the salaries they can.
Finally, there’s Real’s status as, effectively, a non-profit social trust. This means they do not need to generate £30 million a year just to service their debt (like United). Most of Madrid’s dent is held with local banks, many of whom are under political and social pressure not to tighten the screws. Real are too big and too important to fail or to come under the kind of debt pressures that affect traditional clubs. The club’s social, political, and economic significance dwarfs that of any other club in the world.
In that sense, they play by a different set of rules.
Add in Real’s history as being one of the most glamorous teams in the world, and it is easy to see why superstars continue to flock to the Bernabeu.
Source: bleachreport.com
RE: Glazers, Bond Issue and Debt - Bennthered - 22-01-2010
Arseholes! LOL
surely every team should play from a level playingfield!
RE: Glazers, Bond Issue and Debt - Vazza - 22-01-2010
Spanish Goverment pores money over Real madrid!
RE: Glazers, Bond Issue and Debt - Phil-M.U.F.C. - 22-01-2010
United raise cash through bonds
Deal could allow club's owners more flexibility
Manchester United have successfully raised £504million through a controversial bond issue that has caused some opposition from fans.
The money will enable United to pay off most of the club's current £509m debt and could help the Glazer family tackle the £202m payment in loans which continues to grow.
Red Devils officials, including chief executive David Gill, have been on a world tour to drum up interest in the bonds, which will run until February 2017.
Doubt was cast over the prospects of being able to sell them, but they have been over-subscribed.
However, the interest payment on the bonds will be £45m compared to the current £41million on the bank loans.
A spokesman for the Glazer family claimed the deal will bring a 'transparency' to United's finances for the next seven years.
The deal is expected to give the club's owners more flexibility in the running of the Old Trafford outfit, and could bring them leeway to make some new signings.
source: skysports.com
RE: Glazers, Bond Issue and Debt - RambleOnRed - 23-01-2010
Another link with the bond issue and it's success.
http://www.telegraph.co.uk/sport/football/leagues/premierleague/manutd/7055830/Successful-500m-Manchester-United-bond-issue-gives-Glazer-family-breathing-space.html
A few excerpts,
Quote:The seven-year bond will run to Feb 1 2017, and the Glazers will have to begin making the first interest payments to investors in August this year, coinciding with the first slice of domestic television revenue.
Demand from US investors was stronger than anticipated however, and the US dollar issue of $425 million will offer a lower rate, 8.375 per cent, indicating the strength of interest.
The bond issue was twice oversubscribed, a level of interest that represents an endorsement of United’s financial position from the unsentimental investment community.
RE: Glazers, Bond Issue and Debt - Noucamp99 - 23-01-2010
Personally, they can spin this loan any way they want. I am not convinced that come 2017, they will have raised enough revenue to pay off the £45million in interest to the bond owners. Not good. Not good at all!
RE: Glazers, Bond Issue and Debt - Noucamp99 - 23-01-2010
Full piece from the BBC website, which I can understan, lol:
Manchester United have successfully raised £504m through a bond issue, which will cover most of what the club owe to international banks.
The deal means the Premier League club will be able to pay off nearly all their outstanding debts of £509m.
They will face an annual interest bill of £45m a year on the bonds.
The sale comes after figures showed debts at the club's parent firm, Red Football Joint Venture, rose to £716.5m ($1.17bn) in the year to June 2009.
Pounds and dollars
The bond was sold in two tranches, one of £250m with a coupon rate - or interest rate - to bond holders of 8.75%, and another tranche of $425m with a coupon rate of 8.375%.
However, unlike the debt at present secured against the club, the seven-year bonds will not mature until 1 February 2017.
The annual interest bill on the bonds is close to the £41.2m in interest paid in the last financial year.
But by converting the money owed to banks into a bond, it means the club will be free of the potentially strict financial conditions imposed by lenders.
On Thursday, it was confirmed that the club had signed a three-year sponsorship deal with Turkish Airlines to take over as the club's official carrier.
Source: bbc.co.uk
RE: Glazers, Bond Issue and Debt - deadlyblock - 25-01-2010
i wish someone very rich with REAL PASSION football would buy us stupid glazers had to come in our life and people who are hurt is us fans LUHG
RE: Glazers, Bond Issue and Debt - Noucamp99 - 25-01-2010
I can't see that happening so easily. The cost to buy the debt would be prohibitive, but maybe a group or consortium, but you've got to hope they pass the fit and proper person test.
There doesn't seem to be any light at the end of a very long and very dark tunnel!
RE: Glazers, Bond Issue and Debt - Noucamp99 - 25-01-2010
A guy at work said he'd read this over the weekend. I haven't seen it, but it follows the removal of the free breakfasts for all staff, too.
Debt-ridden Manchester United has discontinued free hot meals and soft drinks to their loyal workers' on match days as part of their cost cutting measures.
The Old Trafford workers now have to settle for a sarnie and tap water, and have been told that they would have to pay three pounds for match programmes, which they used to get for free.
"Everything at the club is now about how we can save money. Over the past year staff have noticed the penny pinching," News of the World quoted a United insider, as saying.
"On match days we used to be given a meal from the kitchens and allowed soft drinks from the bars but that has now been stopped. Now we are only allowed tap water and a packed lunch of a sandwich, fruit and a sugary snack," the insider added.
Earlier, it was revealed that the debts of Manchester United's parent company, the Red Football Joint Venture Ltd, had swollen from 699 million pounds to 716.5 million pounds.
Several workers have also voiced strong discontent over the club's methods to try and save money on lower-paid staff. "It's stupid because the kitchens throw out huge amounts of uneaten food every weekend. Staff were also allowed to take home match programmes, but now they have to be surrendered," the insider said. "We were often allowed to keep some of the hospitality gifts people left behind like cufflinks, mugs and pens. Again they have to be surrendered and are all used again. Everyone who works for the club is a Manchester United fan and we all worry about what is happening to the club," insider added.
source: oneindia.com (was in the Sun, but can't see that at work)