Ask yer self

[alcoblade]

Someone will have to educate me on how much debt we were in when he took over.

I don't know, but I'd be pretty sure it was less than £10M. It's £37M now, but we have an academy, a nice ground, and the income from the enterprise center and hotel. Personally, I don't think they've been worth it, but time will tell.

UTB

 

[lenners]

would you?

Yes, why not?
What's the point of having shedloads of dosh if you aren't going to do something useful with it?

 

[tomtheblade]

I don't know, but I'd be pretty sure it was less than £10M. It's £37M now, but we have an academy, a nice ground, and the income from the enterprise center and hotel. Personally, I don't think they've been worth it, but time will tell.

UTB

This is what i don't get. £37m sounds crippling to me, and it's worse than Wednesday, no? So how come we're purported to be so sound, financially?

I'm not a finance expert, so explanation is appreciated.

 

[Highbury_Blade]

I'm no finance expert either, but one thing i think that we have that wednesday don't is a a lot of assets, that if sold, would than cover the debt. Hotel, enterprise centre, academy, Chengdu, etc.

i'm not aware that wednesday have any significant assets beyond the stadium.

 

[DuncDisorderly]

This is what i don't get. £37m sounds crippling to me, and it's worse than Wednesday, no? So how come we're purported to be so sound, financially?

I'm not a finance expert, so explanation is appreciated.

As Highbury says, its about assets. If you take a look at the Disorderlys finances, lets say we owe around £100k including the mortgage. However, lets also say that the house is worth twice that plus a bit. We are a solid risk to lend to, because if it all goes wrong, the lender can force us to sell our property and there will be enough to pay everyone off. So as long as we keep the payments up, no-one gets excited about it. If we didn't have the house then being £100k in debt is a pretty perilious state to be in.

This is the clever bit of the McCabe plan. Most clubs (ignoring players) have nothing much in fixed assets apart from the stadium. I suppose you could say that Hillsborough is worth £35m, as that is what it would cost to replace it, but of course no-one would. If it all went tits up and Hillsborough had to be sold, it would only be worth its land value plus scrap and reclaimation, less demolition costs.

Of course they could turn it into a marina...

 

[beightonblade]

£37million debt OK if you have £37million plus in assets ,its called being solvent.

McCabe is a wealthy man and as sharp as a Blade, in the property market to a certain extent saw the crash cummin and did summat about it.(stitched Valad up like kippers for a starter) he has enuff cash/assets to do without investors and when he de listed wiped a lot of investors out.
Don't be fooled by the hype i'm certain he's off !

 

[Micalijo]

£37million debt OK if you have £37million plus in assets ,its called being solvent.

McCabe is a wealthy man and as sharp as a Blade, in the property market to a certain extent saw the crash cummin and did summat about it.(stitched Valad up like kippers for a starter) he has enuff cash/assets to do without investors and when he de listed wiped a lot of investors out.
Don't be fooled by the hype i'm certain he's off !

How did he stitch Valad up. He only got a small proportion of what he sold for didn't he? Still a fortune but Valad is worthless aint it? He got £30m cash didn't he as settlement on his original deal? Not sure.

Totally agree re assets and liabilities but there was talk of impairment in the accounts of these assets and whilst you say he sawe the crash coming I think he's pushed the boat out too far and I genuienly believe it has caused us to sell players when not altogether necessary. Perhaps it could have been worse and he has got the best portfolio for times like this but I don't buy this argument that he is some genius who gets dream deals every time he enters the market. Life aint like that. Obviously he's successful and astute but people don't just roll over for him and he aint immune to this recession.

 

[Revolution]

As Highbury says, its about assets. If you take a look at the Disorderlys finances, lets say we owe around £100k including the mortgage. However, lets also say that the house is worth twice that plus a bit. We are a solid risk to lend to, because if it all goes wrong, the lender can force us to sell our property and there will be enough to pay everyone off. So as long as we keep the payments up, no-one gets excited about it.

These were the arguments advanced in favour of sub prime lending. That went well.

 

[lenners]

£37million debt OK if you have £37million plus in assets ,its called being solvent.

McCabe is a wealthy man and as sharp as a Blade, in the property market to a certain extent saw the crash cummin and did summat about it.(stitched Valad up like kippers for a starter) he has enuff cash/assets to do without investors and when he de listed wiped a lot of investors out.
Don't be fooled by the hype i'm certain he's off !

Hype? McCabe himself said he's not interested in a takeover and has put a couple of his sons on board.
How did he 'wipe a lot of investors out' by de-listing?

 

[beightonblade]

How did he stitch Valad up.

He had em over a barrel ............. interesting the Bank of Scotland were involved.... do a Google an have a read.

just my opinion of course

 

[beightonblade]

Hype? McCabe himself said he's not interested in a takeover and has put a couple of his sons on board.
How did he 'wipe a lot of investors out' by de-listing?

He said BT wern't going anall , directors can be removed as fast as there appointed, de listing the Blades the way it was done in my mind was un forgiveable.

 

[DuncDisorderly]

He said BT wern't going anall

Thats what he was very careful NOT to say in the now infamous RS interview. He said it was 'speculation' and he didn't want to contribute to it. It was pretty obvious at the time that BT was going to go, he knew it, we all knew it, but what was he going to say with the deal not done..?

 

[tomtheblade]

As Highbury says, its about assets. If you take a look at the Disorderlys finances, lets say we owe around £100k including the mortgage. However, lets also say that the house is worth twice that plus a bit. We are a solid risk to lend to, because if it all goes wrong, the lender can force us to sell our property and there will be enough to pay everyone off. So as long as we keep the payments up, no-one gets excited about it. If we didn't have the house then being £100k in debt is a pretty perilious state to be in.

This is the clever bit of the McCabe plan. Most clubs (ignoring players) have nothing much in fixed assets apart from the stadium. I suppose you could say that Hillsborough is worth £35m, as that is what it would cost to replace it, but of course no-one would. If it all went tits up and Hillsborough had to be sold, it would only be worth its land value plus scrap and reclaimation, less demolition costs.

Of course they could turn it into a marina...

ok cheers for that Duncs.

One thing i thought was that getting promoted to the Prem was an opportunity to wipe all our debts out and start afresh. Obviously we didn't do this. I know that a lot of the money that comes in is reinvested in the playing side in an attempt to stay up, but i can understand now why some teams use promotion as a way to wipe the slate clean, get relegated and then use their financial advantages in the champ to get promoted again with a much sounder base to attack staying in the premiership.

 

[Highbury_Blade]

ok cheers for that Duncs.

One thing i thought was that getting promoted to the Prem was an opportunity to wipe all our debts out and start afresh. Obviously we didn't do this. I know that a lot of the money that comes in is reinvested in the playing side in an attempt to stay up, but i can understand now why some teams use promotion as a way to wipe the slate clean, get relegated and then use their financial advantages in the champ to get promoted again with a much sounder base to attack staying in the premiership.

Well that possibly was our intention too.

But then we hired Bryan Robson.

 

[DuncDisorderly]

These were the arguments advanced in favour of sub prime lending. That went well.

No it isn't. Its the basic premise of all mortgage based property ownership.

Sub prime lending was about providing, almost 'no questions asked', huge sums of money for people to buy overvalued property (especially 'buy to let')without worrying about how they would make the repayments if it didn't all go to plan. It forced up the housing values to unrealistic levels, then crashed like a pack of cards. A classic market bubble. Greedy banks with insufficient regulation...

 

[lenners]

He said BT wern't going anall , directors can be removed as fast as there appointed, de listing the Blades the way it was done in my mind was un forgiveable.

The only way he'd agree to a takeover would be if someone had big money, could buy out all his interests etc. Not going to happen other than in your daydreams.
In the meantime, he keeps a hand on the tiller, watches the pennies, returns some of his cash and hopes the property market begins to turn, as it eventually will, which will make life easier for him and the club.
It's a long haul, whatever those voices are telling you about Trevor bringing in Sheikh Yer Money.

 

[Micalijo]

The only way he'd agree to a takeover would be if someone had big money, could buy out all his interests etc. Not going to happen other than in your daydreams.
In the meantime, he keeps a hand on the tiller, watches the pennies, returns some of his cash and hopes the property market begins to turn, as it eventually will, which will make life easier for him and the club.
It's a long haul, whatever those voices are telling you about Trevor bringing in Sheikh Yer Money.

I agree with that but my problem is that had it not been for the property debts, we would be in a relatively good position (25k crowds, good stadium) to do much better than what we are doing in terms of building a squad for the future rather than this pathetic make do type of team we keep seeing.

However well intentioned Blades Realty was, it aint worked and if it ever does, it will be years and years as you say.

 

[Mad Mick]

No it isn't. Its the basic premise of all mortgage based property ownership.

Sub prime lending was about providing, almost 'no questions asked', huge sums of money for people to buy overvalued property (especially 'buy to let')without worrying about how they would make the repayments if it didn't all go to plan. It forced up the housing values to unrealistic levels, then crashed like a pack of cards. A classic market bubble. Greedy banks with insufficient regulation...

Sorry to disagree Dunc, but Sub Prime lending is simply lending to applicants who's credit rating is not good. Obviously the opposite is Prime, borrowers with good credit records.
The other types of mortgages you mention are self certification [No Proof of Income]. They may in theory be reasonable case's, but the problem was they were never vetted properly, this meant you couldn't tell the good from the bad.
Regarding Buy to Let's. The problem here was lender's asking for minimum deposit's, so when the brown stuff hit the fan, not enough equity in the properties. So if you had to sell, you were stuffed.
Now going back to the original point. you would hardly describe lending to SUFC as sub prime. In any case commercial mortgages almost always demand a substantial deposit. Although, as commercial property values have fallen by around 50%, the buffer between the value of the properties and any loans will have shrunk dramatically.

 

[beightonblade]

What investor wud invest in the Blades to be a minor shareholder wi no say in what happens and no return on investment on the horizon?

Why appoint Sir Clevor Trevor on BIG money when a 30 bob accountant cud cut costs?

Me i think McCabe has bitten off more than he can chew with the Blades and wants out sooner rather than later.

Time will tell.

 

[beightonblade]

Thats what he was very careful NOT to say in the now infamous RS interview. He said it was 'speculation' and he didn't want to contribute to it. It was pretty obvious at the time that BT was going to go, he knew it, we all knew it, but what was he going to say with the deal not done..?

That may be true, is it whats called being clever with words?
ask most Blades what they thought about McCabe and the BT comments.

 

[Revolution]

Now going back to the original point. you would hardly describe lending to SUFC as sub prime. In any case commercial mortgages almost always demand a substantial deposit. Although, as commercial property values have fallen by around 50%, the buffer between the value of the properties and any loans will have shrunk dramatically.

Quite. Sub prime is a bit of an exaggeration, but United's lending is in no way like a bog standard mortgage.

For a start, as Mick says, commercial property is well down and is much more volatile than housing.

Secondly, of course, you can meet your mortgage as you have a regular salary. United's income is not that certain. Some of the clubs that have had all this trouble we have allegedly been avoiding by not taking risks have been brought down property debts. Southampton and Darlington are two examples.

Also, there is an argument that mortgages are a necessity (or at least highly advantageous as opposed to a lifetime of renting). That is not the case for a football club.

Finally, it amuses me that the same people who applaud United's fire selling and transfer market "prudence" are so sanguine about the club running into significant debt (albeit secured) due to non football related activities. that strikes me as doublethink.

 

[beightonblade]

commercial properties down 50%..... that may be true in sum cases in others sum prices are UP !

As with all properties/investments sum perform better than others for me i think commercial property will cum back faster than residential.

McCabe swithched very quick to good perfoming property commercial deals sum in conjunction with his favourite bank, the amount of government/council projects he his involved in is impressive and gold plated returns...... smart owd bugger !

 

[raul]

How about this

Kev wants an Aston Vanquish that costs £180k. Kev has 180k in the bank. Kev spends the 180k on 15 Renault Clios and goes into the car rental business on the basis that in x years time the income generated will have replaced his 180k and provided enough profit to buy the Aston Martin effectively for no money.

Is that the basic reasoning behind all the myriad companies' we're embroiled in?

 

[Flatulent_Bob]

What we've been ripped off by paying £12,000 a piece for a French hairdressers car?

Its simply about McCabe attempting to increase our revenue by diversifying into other areas to give us medium to long term benefits. I think all these decisions were sound but instead of seeing the benefits now the economic climate has put this back a couple of years. It depends on how you think we should be run, personally I think we will get the benefits we just have to wait. It's entirely due to the world wide financial position otherwise I think we would already be seeing the benefits.

 

[Mad Mick]

commercial properties down 50%..... that may be true in sum cases in others sum prices are UP !

As with all properties/investments sum perform better than others for me i think commercial property will cum back faster than residential.

McCabe swithched very quick to good perfoming property commercial deals sum in conjunction with his favourite bank, the amount of government/council projects he his involved in is impressive and gold plated returns...... smart owd bugger !

When I say 50% I'm talking generally. There will always be exceptions. For instance you buy a site in a run down area for peanuts and it gets developed, all of a sudden that property could be in demand. Also there would be differences based on geography and also the type of commercial property we are talking about. For instance retail, office, factory, warehouse. Also there is the size of the property to take into account. So there are a lot of variables.
In actual fact if you were buying UK commercial property from the Eurozone, you could get a real bargain. Just factor in the strength of the Euro and you could pick up many properties at around one third of their price of a couple of years ago. In actual fact I think I've convinced myself to go and buy one, anyone got a few million to spare?

 

[beightonblade]

When I say 50% I'm talking generally. There will always be exceptions. For instance you buy a site in a run down area for peanuts and it gets developed, all of a sudden that property could be in demand. Also there would be differences based on geography and also the type of commercial property we are talking about. For instance retail, office, factory, warehouse. Also there is the size of the property to take into account. So there are a lot of variables.
In actual fact if you were buying UK commercial property from the Eurozone, you could get a real bargain. Just factor in the strength of the Euro and you could pick up many properties at around one third of their price of a couple of years ago. In actual fact I think I've convinced myself to go and buy one, anyone got a few million to spare?

I remember the euro at £=148 just about reight me thinks.....invest in the UK? not for me at any price...just wait until after the election and see the HUGE tax increases.... whats the betting main residences start attracting Capital Gains Tax !

 

[Autumn]

McCabe Jr will be around for a while me thinks.

This made me chuckle, he can't tell who are players from the groundkeepers when they are all on the pitch, hence the different kits they all now wear.

 

[lenners]

What investor wud invest in the Blades to be a minor shareholder wi no say in what happens and no return on investment on the horizon?

Why appoint Sir Clevor Trevor on BIG money when a 30 bob accountant cud cut costs?

Me i think McCabe has bitten off more than he can chew with the Blades and wants out sooner rather than later.

Time will tell.

Not many - especially when United's assets aren't making any money (other than the football side)
Which is why we haven't had anyone rushing to pump money in.
As for Trevor, he's a bloke with experience at large football clubs, with the know-how, with the aim being fairly major surgery allied to trying to keep the team competitive.
It's a fairly humdrum, realistic scenario Beighton.