zocoss

10 Apr 09, 11:57

Manchester United accounts reveal further losses for the football giant

MANCHESTER UNITED’S wage bill was a massive £121million last year — an increase of £29m.

The 30 per cent rise comes after improved deals for Wayne Rooney and Cristiano Ronaldo. United’s Premier League and Champions League Double last season saw them splash £13.3m in bonuses, compared to £8.6m the previous year.

Chief executive David Gill is United’s best-paid non-playing or non-coaching employee on £1.7m a year. The champions are still second in the big spenders table with Chelsea’s bill at £148m — a rise of 12 per cent.

Manchester United have posted the most spectacular profits for any British football club - while at the same time being part of its biggest debt.

Accounts to June 2008 reveal turnover at the club has risen an incredible 22% to £256.2million, underpinning a 7.5% increase in profits to £80.4million.

However, Red Football - the umbrella for United and its various offshoots - confirmed a loss of £44.8million, taking their overall debt to an eye-watering £649.4million.

Critics are bound to pounce on the figure as evidence of an unsustainable financial structure, questioning how it is possible for the Glazer family to make a profit if their losses are so high in a season as successful as the last one.

Yet Manchester United's owners have never given any impression of being too concerned about the debt mountain itself, the payments for which were restructured two years ago and currently takes £45.5million annually out of United's profits.

Instead they prefer to maintain a drive for profits at a club whose overall value is estimated at over £1billion. Whether, in the current financial climate, they can continue to squeeze even more from the United brand is open to doubt.

Attendance figures, while still extremely healthy, are showing signs of dipping slightly, suggesting further controversial increases in ticket prices might have more of a negative effect than has previously been the case.

Income from media streams, which show up a mammoth 30% rise to £90.7million, might offer more scope for improvement given the domestic Premier League TV deal has gone up five per cent, with the overseas contracts likely to exceed that figure.

skythewood

13 Apr 09, 09:43

80 million profits?

40 million loss?

650 million debt?

my understanding of profit is revenue minus cost..

loss is cost minus revenue...

If there was profit made, why is there an increase in debt?

Sienx

13 Apr 09, 11:26

sell berbatov can liao

brokenluv

13 Apr 09, 11:39

Originally posted by skythewood:

80 million profits?

40 million loss?

650 million debt?

my understanding of profit is revenue minus cost..

loss is cost minus revenue...

If there was profit made, why is there an increase in debt?

if im not wrong, the debt is on the current assets? like accounting?

alwaysdisturbed

13 Apr 09, 11:51

Originally posted by brokenluv:

if im not wrong, the debt is on the current assets? like accounting?

which includes players' valuation and depreciation?

dragg

13 Apr 09, 12:00

crazy wage bills.

zocoss

13 Apr 09, 12:05

Manchester United Declared The World's Richest Club Ahead Of Real Madrid - Report

There are concerns about the global economy at the moment, but football is continuing to coin it in as this year's Forbes rich list shows...

Manchester United have retained their position as the world's richest football club ahead of Real Madrid and join nine other Premier League teams in the top 25.

The Red Devils' are considered to be worth €1.42 billion by Forbes, well ahead of los Merengues, who are reported to be worth a figure of €1.03b.

Arsenal are, somewhat surprisingly, in third position, while Barcelona are in seventh place, despite their overall wealth increasing by 22 per cent from last year's summary.

Madrid and the Blaugrana are the only two Spanish representatives on the list. There are also four Italian sides, five teams from the Bundesliga, two French sides and the Old Firm representing Scotland.

The show of strength from the Premier League is highlighted by Tottenham Hotspur's position of 11th, which places them above Inter, Roma and Olympique Lyonnais.

Spurs have only won two League Cups in the last ten seasons and never qualified for the Champions League.

Chelsea's value only sees them make it into eighth place while Manchester City are back in 17th with a value of just €236 million, less than both Hamburg and Borussia Dortmund.

Top 25 clubs: (€, 000,000's)

1 Manchester United 1,423
2 Real Madrid 1,030
3 Arsenal 913
4 Bayern Munich 845
5 Liverpool 768
6 Milan 753
7 Barcelona 730
8 Chelsea 609
9 Juventus 457
10 Schalke 04 388
11 Tottenham Hotspur 339
12 Olympique Lyonnais 322
13 Roma 290
14 Inter Milan 281
15 Hamburg 251
16 Borussia Dortmund 247
17 Manchester City 236
18 Werder Bremen 222
19 Newcastle United 217
20 Stuttgart 201
21 Aston Villa 183
21 Olympique de Marseille183
23 Celtic 166
24 Everton 158
25 Rangers 148

alwaysdisturbed

13 Apr 09, 12:20

richest in debts arh?

Sienx

13 Apr 09, 12:25

lol

brokenluv

13 Apr 09, 12:25

richest as in assets but not cash rich. The amount of wages paid out each week is absurd, several 100k/week players in a club.

alwaysdisturbed

13 Apr 09, 12:50

were debts taken into account?

zocoss

13 Apr 09, 13:00

Originally posted by skythewood:

80 million profits?

40 million loss?

650 million debt?

my understanding of profit is revenue minus cost..

loss is cost minus revenue...

If there was profit made, why is there an increase in debt?

Do not confuse "Red Football" with United... My guess is,

The turnover for 2008 as reveal is... £256.2 million. Profits = £80.4 million...

They have to service an annually interest of £45.5million out of the profits...

The loss incur could have been by its holding company "Red Football" which may not necessary be managing the club as its sole business...

So the £44.8 million loss, takes their overall debt to £649.4million... Of these, £510.69 million is taken out against the football club itself... The rest is with "Red Football" a holding company belonging to the Glazers...

Basically, the fooball club is doing well with record yearly profits... If they keep it going, the holding company will have no problem in servicing their loans... Its just a matter of time like 10 or 15 years before the loan is fully paid up... But by then, The Glazers who bought the club for $800m but took a loan of almost $600m... would own the club fully without any mortgage...

I can understand why they are not too worry by the loan sum as in time, what started out as a $200m investment could be worth over a billion. Even if they were to sell it now, I believe they would have made a handsome profit too maybe 100% given that that only came out with $200m... But I think they see more potential for the club and the league rather than to cash in now... The Premier League TV deals will add more to their income in the next few years... So like I said, its just a matter of time... And with these type of investors, they normally see long term...

zocoss

13 Apr 09, 13:01

Originally posted by alwaysdisturbed:

richest in debts arh?

Richest in value, worth...

Chris88110

13 Apr 09, 13:12

Originally posted by zocoss:

Richest in value, worth...

How they value players??

zocoss

13 Apr 09, 13:22

Originally posted by Chris88110:

How they value players??

I guess they value the brand and its track record on its income rather than on individual players... Just like they don't take into account how much Villa would cost but the overall debt Valencia the club owes...

In United's case, they can sell Ronaldo next season for $80 million and it still won't reflect on the debt amount... It will still remain the same only thing is, it could show up as extra or more profits in that accounting year...

skythewood

13 Apr 09, 13:25

Arsenal is rich ah... and they don't buy much players too... buy cheap ones and develop

SexyChin

13 Apr 09, 13:30

arsenal has the most amount of debts, according to http://www.forbes.com/lists/2009/34/soccer-values-09_Soccer-Team-Valuations_DOV.html

zocoss

13 Apr 09, 16:16

Originally posted by skythewood:

Arsenal is rich ah... and they don't buy much players too... buy cheap ones and develop

The reason Arsenal don't buy many expensive players could be they have been in debts for many years already... Since they started building their current stadium years back... And the bad thing over at Arsenal is, they have too many individual directors or shareholders all looking to see a quick returns in their shareholding...

Winning titles is not on their mind, making profits are more important to the current directors... Ever since David Dein left, they have not done well. They don't seem to balance it... Wenger has done a good job keeping them in the top 4 at the same time keep generating yearly profits by not spending too much each year... But even he knows they can't last very long this way and only the risk of losing out in the 4th CL spot made them buy Arshavin...

2cansam

13 Apr 09, 16:24

i think the debt may have been a result of the takeover by the Glazer Family. They are still in the process of repaying the debt incurred for buying over the club. They are using Man U as the business entity to re-finance their debt. Other than this, we have to take into account the big transfers that has taken place within their squad, they are spending more than 10 mil pounds on each player if i'm not wrong

Why they are able to sustain such a huge debt may lie in their massive fanbase across the globe, and one match alone is able to earn them lots of millions.

Don't worry, they are still the richest