Wednesday 23 March 2011

fate of Manchester United? (updated 29/3)

Red Football JV Limited had a loss of 105million pound in 2009-10 seaseon.

Despite Manchester United is one of the wealthiest club in the world, however the parent company of the club, Red Football JV Limited, was heavily affected by the debt. Thanks Glazer.

The structure of the club ownership is as follow:

Glazer family > Red Football JV > Red Football Limited > Manchester United Limited > subsidiaries (including the team itself, MUTV, etc.)

(intermediate holding company ignored , source)

Manchester United Limited was healthy. Red Football Limited had a EBIT of £27.3 million, but the total recognized losses of the financial year was £84.3 million due to the interest expenditure, which it had a net debt of £357.8M.

That's not the full story, Red Football JV Limited 2009-10 result, which could be obtained in the "Companies House", shown the group had a pre-tax loss of £109M, which isn't a good sign. In 2008-09 season the pre-tax profit of RFJV was £21.6M, which mainly due to the sale of Ronaldo (profit of selling players in 2008-09 season was £80.7M) The net debt was £566M in 2008-09 season.

Glazer is clever. He borrowed money to buy a hen which can lay golden egg. And bankrupt of the parent company did not affect the team itself. When the parent company was liquidated, the banker still able to sell the subsidiary without affecting the business. The net asset of RFJV was stood at £37.M in 2008-09 season. Sound inexpensive? But Glazer rejected an offer of £1.6 billion from Qatar ruling family. That's is, if Qatari only buy the the team itself and Glazer needed to clear the debt by its means, he still received net cash of about £1 billion, and if the Qatari bore the debt, that's mean it would cost more than £2billion. Glazer borrowed money to buy Manchester United, it is a good profit as he did not take his own money to buy it, but now he is the owner, and he knew there are potential  buyers, and the family can borrow easy money from the group, just let see Glazer when he sold it for a new world record.

Wednesday 2 March 2011

Post-Tsunami of economy? Half-yearly result of Football industry (2010-11)

Team

Net income (loss)

Arsenal Holdings plc

-£2.52M

Red Football Ltd.

-£6.27M

Tottenham Hotspur plc

£4.24M

Birmingham International Holdings Ltd

-HK$65.47M

Rangers FC plc

£9.02M

Celtic plc

£7.06M

Juventus FC Spa

-€39.50M

AS Roma Spa

-€14.93M

SS Lazio

€7.36M

SL Benfica - Futebol, SAD

€0.53M

Sporting Clube de Portugal - Futebol, SAD

€2.46M

FC Porto - Futebol, SAD

€6.32M