what a shame :-D
From The Guardian
Manchester United posted a £66.5m loss in the first nine months of their fiscal yearas financing costs and one-time items more than offset increasing media, matchday and commercial revenues.
The accounts of Red Football Ltd, United's holding company, released today, show a £40.6m one-off charge linked to closing down an interest rate swap – or protection that companies buy against interest rate increases – that the firm had to pay when it swapped its loan debt with a bond earlier this year. The company posted a £19m non-cash foreign exchange loss due to the increase in the US dollar against sterling, which makes the bonds that United issued in dollars more expensive. The remaining £7m contained other costs including those related to debt issue.
United posted a £9.3m profit on the disposal of players that was far behind last year, when they sold Cristiano Ronaldo to Real Madrid for £80m."The loss shows that the business model doesn't work unless there are player sales," said Philip Long, partner at PKF accountants and business advisers, who has worked on football deals. "It's an absolute mess – when the full-year interest is accounted in and there are no items like last year's sale of Ronaldo, what's going to happen?"
Rising player salaries pushed staff costs up by 7% to £94.5m, from £87.9m, in line with the company's revenue, Manchester United said. The club face rising interest on £225m of payment-in-kind (PIK) loans, incurred in 2005 when the Glazer family bought the club. The PIK interest payments to investors, including hedge funds, are due to increase to 16.25% from 14.25% in August because of the firm's high debts. Apart from the PIK loans, United also have £520.9m of debt but the accounts showed that a £70m facility available to pay down PIK debt has not been used.
The bonds, sold in February at about 98 pence to the pound, trade between 93p and 94p, putting investors at a loss. "All the high-yield market is down," a person familiar with the bond issue said. "And it's a football deal, which doesn't fit into some asset managers' investment strategies."
Bondholders were cheered by boosting media revenue, to £76.8m, which helped lift earnings before interest, taxes, depreciation and amortisation to £82.1m, up from £63.4m over the same period last year, the company said.
During a conference call, management warned investors that four-quarter growth may be lower because of fewer Premier League games to be played during the period – due to a calendar issue – and the team's elimination from the 2009-10 Champions League in the quarter-finals, having reached the semi-finals in the two previous years.
The company, which said it has £95.9m in cash reserves, is trying to push up advance ticket sales, warning fans that their season tickets will be passed on unless they make a payment. A club email to executive members seen by the Guardian said: "If you do not renew your Old Trafford executive facility for the forthcoming 2010-11 season before the renewal deadline of 31 May, your facility will automatically be released to the seasonal hospitality waiting list." The email said this is now a "matter of urgency".
The club reiterated that United are not for sale. "The board notes recent press speculation regarding a possible bid for Manchester United," the club said. "The owners remain fully committed to their long-term ownership of the club. Manchester United is not for sale and the owners will not entertain any offers."
The Glazer family are keen to hold on to their investment, despite their unpopularity among the fans, who blame them for loading the club with debt and turning it into a commercial venture. The owners, however, do not want to capitalise their investment until revenue-boosting new technology develops, allowing access to live games and more content through mobile phones, a person familiar with the situation has told the Guardian.
The Red Knights, a group of more than 10 wealthy investors led by the Goldman Sachs chief economist Jim O'Neill, declined to say whether their planned offer was still being prepared.
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