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Media Avalanche of Glazer-Debt Stories Gathers Pace

The Guardian has been rattling off story after story on the Glazer debt, giving me an image of a press room chock full of Shakespearean monkeys rattling away feverishly at their keyboards. And, whilst some of them have gotten repetitive, quite a few of them have been good reads.

The blogosphere isn’t far behind though, and there is some good material going around over there too.

Leading off is, proper journalist David Conn’s piece, describing how the Glazer family have borrowed money from club coffers. The fact that our debt and the Glazer family debt is just about one and the same, being a fully family owned private entity, the club is sadly vulnerable to money being siphoned off without really being answerable to the fans.

That is a point made quite clear in the analysis in RoM; a pretty comprehensive analysis that weighs the pros and cons of the refinancing. However, an assertion made in the analysis — especially, the bit about the difference between Profit & Loss statement and Cash flow accounts — piqued my curiosity; in particular, this:

Similarly I read some comments on the lines of “If we had purchased Carlos Tevez for £25m, our profits would have been lower by £25m.” Again not correct. Players are the operating assets of a football club and any purchase made will reflect in the cash-flow statement and not in the Profit and loss statement [For context read the preceding paragraph too]

But does that mean we can buy player after player, yet not have it show in our P/L account? Isn’t money being spent (ie, leaving the club)? So isn’t this just accounting wizardry to make things look pretty? I am not an expert on accounting practices, so I’ll be grateful towards any expert who can shed more light on this.

The ever excellent football blog Pitch Invasion, sources an image via the Financial Times, giving a diagrammatic break-down of how the Glazers have ‘milked’ Manchester United.

United Rant reports on the existing fears on fans’ minds all along: that the Ronaldo money was mostly earmarked for debt.

* * *

A few thoughts on this whole situation:

Whilst most successful businesses can run with serviceable debt — in many cases, debt is a good indicator of growth for a business — the principles when applied for a football club is not sustainable in the long term. If the Glazers succeed it will be a miracle. And the exception. Not the rule.

The problem with such kind of ownership is the profits do not justify the investments. Other businesses grow by selling a product and being competitive by serving it. In football the product, as it were, is performance on the pitch, and an especially high performance level in United’s case to remain profitable. Very few clubs in major leagues in Europe are really that profitable. The Ronaldo money helped us to a profit. But how many Ronaldos do we need to sell every season? Also, the business model seems to rely on sustained period of success. Essentially that means it hinges on levels of human success/failure — be it the manager, or players, or poor transfer choices. That’s a lot of uncertainty if you think about it. [Not everyone has Ferguson. And even those who have a Ferguson, it’s not forever.]

So it doesn’t take Sherlock-like deduction skills to conclude the Glazer style of ownership is terribly flawed. As are most bids to buying clubs with the intent of making profits. It was the case back in the time of Martin Edwards, and it will be so in the times of Hicks-Gillet, and the Glazers. And it was also true when we were in the stock market.

I am once again tempted to quote from Simon Kuper’s book, and I paraphrase, “Buying a football club is not a business decision, it’s philanthropy.” Only sugar daddies of the Abramovich or Al-Nahyan scale can expect to buy a football club and not break a sweat. So supporter-run ownership of the Barcelona/Madrid/Schalke scale is the way to go. But, unfortunately, with the amount of debts we are in, we can consign the “let-every-United-supporter-contribute-X-pounds” line of thought to the realms of fantasy. Even if supporters stumped up the cash, there would always be another investor looking to buy it off the Glazers.

* * *

When news broke about the issue of bonds, there has been talk of how the resulting lowered interest payments could mean money spent on transfers. In fact the Mirror are reporting that the Glazers have handed Ferguson £75m to spend. But haven’t we heard Ferguson and club spokesmen go on about how they have £80m to spend? So I’ll believe that when I see it.



  1. Grognard

    16 January 2010 at 06:05

    @owen: If United were to ever consider selling Rooney it would be because the team was in major financial trouble, otherwise what would be the point selling such a good player who is loyal to the team? So the idea that first of all we would get 70 million for him is absurd. To then assume that all the money they got would go to buying two players to replace him might sound trendy and romantic but all it is fantasy. It’s never ever ever going to happen. We will be lucky if we get a mere 20 million for Berba and Nani together as their stock has dipped tremendously.

  2. owen

    16 January 2010 at 06:07

    @ NicoQB : Will the team lack in assists if you play Villa,Aguero and Di Maria???No.
    What Valencia had done this season so far is nothing less than world class standard.

  3. owen

    16 January 2010 at 06:15

    @ Grognard : We also sold Beckham who was too loyal and Through and Through United still.English Media has over-hyped Rooney so much that he can get 70 million.A good world cup will make Nani 15 million or more figure easily ,no doubt.Berba can easily bring 12 million.

    Selling one good and 2 average players is never bad if you are going to use this money to get 2 proven stars and 1 who will be.Who knows , in future Aguero can also be loyal and fan favourite for Utd.Di Maria had already mentioned that his dream is to be at United

  4. owen

    16 January 2010 at 06:23

    CSKA Moscow winger Milos Krasic has rejected an approach from Roberto Mancini’s Manchester City, saying he only wants to join Manchester United or Arsenal.

    But Old Fergie will not go after him as he will have to pay from his own pocket.

  5. Redrich

    16 January 2010 at 06:25

    @owen: Aguero is too small for the PL and not what United need right now – a big, strong CF who, in the mode of Alan Shearer, can give as got as he gets.
    Aguero would be window dressing for a solid team, adding another dimension. but for United he would be a disaster, a distraction, and a big waste of money!

  6. owen

    16 January 2010 at 06:36

    @ Redrich : Who are the big CF available in the market.Djeko will never come.Aguero is 21 i think .So time is there to adjust the play.He is much talented.So it will not take more than half season .This too small for PL theory is too old and rubbish as a lot of players have proved it wrong.
    If correct,Fergie even tried to get him in the summer window.

  7. owen

    16 January 2010 at 06:37

    Why is this REPLY button not working for me? 👿

  8. Grognard

    16 January 2010 at 07:05

    @owen: Selling Beckham had nothing to do with money. It was a decision made by the manager due to personal issues between him and Beckham that he felt were irreconcilable. Rooney has no such issues with the manager or the club and so selling him would have to be a desperate for cash move. Also, you are reading what I am writing mate. You are naive to believe that selling Rooney would mean the money would go back to buying players. If Rooney was to be sold, it would be to help out the debt and nothing else. There would be no money for players.

  9. owen

    16 January 2010 at 07:53

    @ Grognard: But there are also rumours that Manager has been provided 75 million to buy without selling anyone 🙄

  10. CraigMc

    16 January 2010 at 08:41

    @tom: United are NOT making Rooney look like a greedy player mate – truth is HE is a greedy fuck. I mean to ask for 140,000 quid a week in United’s presentr economic crisis – well it aint going to happen is it? Rooney is pricing himself out of the market if HE doesn’t moderate his demands!

  11. CraigMc

    16 January 2010 at 08:43

    @Redrich: Name the spark and the games this season that Rooney’s spark has won for us please!

  12. CraigMc

    16 January 2010 at 08:51

    @Redrich: ABC – United proved they miss the assists by NANI 😆 . Talking about Nani, there are a good of United faithful on ROM suggesting his re-instatement to left side of MF – think they are a bit fed up with the Obertan and Welbeck non contributions to the United cause. ABC, United missing the assists by Nani 😉 😆

  13. CraigMc

    16 January 2010 at 08:52

    @Redrich: Who else mate? You got something worthwhile to say then???? 😆 😆

  14. Grognard

    16 January 2010 at 09:46

    @owen: I’ll believe that when I see the purchases.

  15. tom

    16 January 2010 at 12:47

    @CraigMc: rooney’s management has a responsibilty to ask for wages that he is entitled to.every player has a sense of worth and in a professional game they need t o be paid their worth. i remember vieri feeling cheated when playing for lazio. he was scoring all the goals and wasnt one of the highest payed player in the team. della pana , (budha ) was. he asked for his contract to be regonotiated and ended up been transferred to inter for a world record fee. my point is wether you agree with the amounts players are receiving or not they must be paid somewhere around market value. the plight of the club doesnt come in to it. rooney taking a huge pay cut will not make a huge difference to uniteds plight. for example lets assume rooney accepts his current wages in his new contract. how do you think he would take it if united signed a world class player at market value. i would feel cheated regardless of my earnings. especially if the world class player turns out to be another budha or berba. if united dont pay market value then they want sign class players but enter liverpools world of speculating that the prestige of the club will turn an ordinary player into world class. united must decide if rooney is world class. to me he is world class and should receive the same renumeration that other world class players receive. there is no point in going through matches and tallying the missess and so called poor decisions. believe your eyes. remeber the reason why matches end up 1-0 1-1 2- 1, etc because it takes alot of work and class to put the ball in the net. if scoring was easy we would have basketball scores. now, united is a world class club and we fans deserve world class player.

  16. colver

    16 January 2010 at 14:48

    The Cascarino assessment was a bit harsh. It is supposed to be based on PERFORMANCE, and given how terrible our squad is we are doing pretty well. Defensive injuries explain a lot of our recent drop in form, and with EVDS back and a fit first choice defence we will stabilise.

    My main worry is what will happen when Rooney has a typical goal drought because I really do not see anyone who can make up for any goal shortfall. I really wasn’t expecting Rooney to score this many goals in the first half of the season and you cannot deny that has played a huge part in us staying within touching distance of the title.

    I was hoping Owen would come into the team and chip in 10-15 Premier League goals but we never play him. Berbatov just never looks like being prolific for us, and while Valencia has impressed me with his goal return, I do not see many goals coming from midfield.

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