More Budget Cuts

[lenners]

Anyone know owt about this Halabi bloke being mentioned elsewhere as an investor??

 

[jacknat]

throughout the whole recent saga, one thing really annoys me and that is the lack of honesty coming out of the club.

we've been told in the past about ambition ie. top ten club in five years etc

these types of announcements seem to occur at the same time as our season ticket renewals are due.

it's crap at the minute being a blade and i'm not a particually negative person!

a little bit of honesty would do wonders at the moment, it wouldn't make people feel much better but maybe a little more UNITED!

 

[Darren]

Here is part of Mawhinneys' report

"The latest statistics show that in the Championship, year on year,
players' wages increased by a further 24.1 per cent in the season 2008/09. In the Premier League, research indicates that player wages simply follow television income. The truth, however, is that as players` wages increase, club debt increases also.

The Premier League is the highest revenue generating league in the world, and the
Championship alone is the sixth highest football revenue generator in Europe. Yet that success seems to be founded on the promise of a virtuous circle - better players, more success, more revenue, profits. The reality is a zero sum game. Club A increases wages.

Club B matches them. Club C seeks to gain an edge. Club D tries to keep up. And no one
(except players and agents) makes money. This approach leads to massive inflation in terms of 'wages to revenue. In 2007/08 in the Championship, research from Deloitte shows that clubs spent an average of 87 per cent of revenue on players` wages. Is there any business in the world where such a percentage would be sustainable? Lots of clubs are chasing a dream paid for by their owner`s wealth. They are defying economic
gravity simply because their owners are rich. There is nothing wrong with that. Rich men have always been involved in football. But increasingly, being a rich man in football is not enough.

Today what is required is to be very rich. This trend has reached the point where the wealth of countries may soon start to influence the football scene. Millionaires cannot compete with billionaires. And billionaires cannot compete with national GDPs (gross domestic products).

The 'sustainability' of debt is becoming increasingly dependent on the infusion of non football related resources. That is not a sustainable business model and everyone in this room knows it.

I am told that a strength of our professional game is that it operates in a 'free market'; but the truth is that market freedom is limited. Any one of us can set up a business to make widgets
and from day one we can compete with other sellers of widgets. That is not true in the world of football. You can set up a team today, but you cannot play in our leagues today.

It would be more accurate to describe our structure as a 'closed market', though that in itself is simplistic. For example, those at the top of the Premier League play simultaneously in two closed markets - a domestic one, and a European one. One of the most important aspects of a closed market is that, over time, whatever happens in it affects all the members".



In my humble opinion McCabe is leading and others will follow, as finances in football tighten, small squads will be the norm and it will become a buyers market ESPECIALLY if the much talked about centralisation of wage control comes into force (wages as % of income)

This will, of course, mean the big clubs get bigger and the likelihood of a club challenging them becomes more and more remote.

Just to go all political for a moment (I know, surprising isn't it), I have always thought the way football has gone over the past 15-20 years is a prime example of what happens when you let the free market rip - you end up in a oligopolistic system where it is virtually impossible for new entrants to challenge the dominance of the major firms.

 

[Jim Chimmerney]

This seems way too cautious EVEN for us.

Finally, though the club are admitting that we have no further desire to get the "Quality" in that we keep hearing about. In a way this is a relief as its a bit more honesty from the club.

I seem to remember that when we went up last time, there was an article in the media about Ballack (after he signed for Chelsea on 120k a week) earning more in a week than us. I seem to remember that our wage bill at the time for the entire 1st team squad was 105k per week and the average was around 5k, with the likes of Unsworth and Jags on around 12k I think.

At 105k per week that would give an annual budget of 5.5million (approx).

So now we've been up, we've earned more cash, made large player sales, got Tevez cash and lots of larger investments and sponsorships and also had consistently higher attendances than when we went up and we still only reach a figure thats probably just above inflation... Back to the thread from a week a so ago then..

Where's the money gone?

Apparently we were going to be in a better position than most to come out of the "credit crunch". Ok so we've perhaps paid off some debt.

But if we need to reduce so much, then why oh why are we planning to extend to a 44k capacity ground? We won't and don't fill our current capacity. So its a complete waste to extend the ground if we don't have the Premier league team to match.

We'll just end up with an expensive, empty ground with echos and no atmosphere. And all for a World Cup that probably won't end up in Sheffield anyway!

Up the Blades

It's as if we've spent 4 years flirting with being this 'top ten Premiership club', just to establish ourselves back as a Championship club again but this time with no debt.

Are we better off than we were 4 seasons ago, yes, well the club is. Is the 1st team any better off and are we anymore likely to get promotion than we were 4 seasons ago, I would say a definite no. We had the drive and determination to go for it 4 seasons ago, now we seemed resigned to ride the financial storm and hope for the best.

 

[Jim Chimmerney]

you end up in a oligopolistic system

Bergen - any chance you can expalin this one with a few pictures

 

[puppet]

I truly believe that the clubs in Hungary, China and Australia are a hinderance to investment. Other than that I agree entirely.

mccabe owns 2 of those himself, possibly even chengdu blades as well. its been one big farce that, claiming it would be any use to united.

 

[Wards]

Where is bloody Sam Hashimi when you need him/her?

 

[matth]

Anyone know owt about this Halabi bloke being mentioned elsewhere as an investor??

How's this for starters?

Downfall

In late 2007 the sports gym chain Esporta, which he had purchased for £460m, was forced into administration, costing Halabi at least £120m of his own money, as well as damaging his relationship with his main creditors Societe Generale[5].

January 2008 saw the former tycoon forced to sell his one third stake in the flagship Shard of Glass development in London for £30m - a stake that had been valued at over £130m just six months earlier[6].

Later that year, the Mentmore Towers project, which Halabi had purchased in 1997, with a view to turning into a six star hotel, ran into problems. The grade II listed building was mothballed, with essential maintenance work remaining undone as the project architects sued Halabi for unpaid fees. During summer 2008 English Heritage ranked three of Halibi's assets as "Buildings at Risk" showing their concern about the future for the important listed buildings concerned, and their maintenance.[7]

In June 2009, his group of property companies defaulted on $1.9billion of bonds. The debts in question had been secured on nine London properties, which had fallen in value by up to 50% since the start of the credit crunch, leaving them in negative equity[8].

On 21 August 2009 insolvency specialists MCR were appointed as liquidators of Buckingham Securities Holdings, Halabi's principal client advisory vehicle, reported The Daily Telegraph.

 

[raul]

You're all knocking him now, but just wait until all the other 91 mismanaged outfits all go bust and there's only us left. World domination awaits - and it'll all be down to the Chairman.


Just wish they'd all get a shifty on though.......I'd like to still be alive to see it.

 

[JJ Sefton]

Just to go all political for a moment (I know, surprising isn't it), I have always thought the way football has gone over the past 15-20 years is a prime example of what happens when you let the free market rip - you end up in a oligopolistic system where it is virtually impossible for new entrants to challenge the dominance of the major firms.

What product is this market in football producing?

 

[Sothall_Blade]

Meanwhile, we have plans to turn the Lane into a World Cup ready stadium, despite the fact that a) we are publicly saying that we don't have much money to be throwing around, b) there is absolutely no guarantee that we will be getting the World Cup, c) there is absolutely no guarantee that Sheffield would be one of the designated cities in the bid, and d) that even if we do get the World Cup, and Sheffield is one of the cities picked, even with the improvements there is no guarantee that we will be one of the host grounds, especially given there are plans to re-do/re-paint Hillsborough.

All true, but we've only applied for planning permission to improve the Stadium. I expect the work on The Kop will go ahead (and it IS a crap stand) but the South Stand Project will only ever happen if England/Sheffield/Bramall Lane are chosen for the World Cup.

 

[alcoblade]

it would be nice (but probably a pipe dream) if the club would clarify the situation with all the other clubs, outstanding debts and overall plans (stadium development, wage budgets etc). There's always the accounts, but they're very hard to interpret for the average Joe.

We shouldn't get too upset about a YP article, but IF true, it raises major concerns about the use of the Tevez and Walker / Naughton money, and the actual impact of things like the enterprise center, the academy, the worldwide links.

I'm pretty sure that worldwide, it's only Chengdu that have any impact (positive or negative) on our fortunes. The rest is McCabe's issue.

My worry is that as a property man, McCabe is becoming focused on the world cup bid and stadium development. Previous statements have said that these would only go ahead subject to us becoming an "established" premiership club. This is surely not possible given the timescales. Surely bids would have to be solid within the next year or two. Not nearly enough time for us to have ANY need for a 44,000 seater stadium. The world cup will come and go, along with the 3 "nothing" games we'd get. The half empty stadium and millstone of debt will be with us for a long, long time. It's this issue, if no other, that'd I'd like clarifying.

UTB

 

[Sothall_Blade]

Surely bids would have to be solid within the next year or two

The decision will be made in December 2010. We vastly improve our chances of winning the bid by having firm plans and planning permission. I don't think United have to actually BUILD anything in advance of the decision.

 

[TonyAgana]

The decision will be made in December 2010. We vastly improve our chances of winning the bid by having firm plans and planning permission. I don't think United have to actually BUILD anything in advance of the decision.

Perfectly fair comment given that most World Cup hosts don't have anywhere near enough facilities up until a few months before the actual event. Same with the Olympics.

 

[beightonblade]

I'm keeping mi gob shut !

Wonder who the new management will be ?

 

[Highbury_Blade]

I'm pretty sure that worldwide, it's only Chengdu that have any impact (positive or negative) on our fortunes. The rest is McCabe's issue.


UTB

Not necessarily. If McCabe decides that he wants to call in his loans from us to fund a championship winning side in Hungary, then that will impact on us.

After all, Ferencvaros are a far more likely bet to get to the champions league money than we are, and at far less outlay too. If I was a businessman I know which team I’d be investing more in.

 

[TonyAgana]

I'm keeping mi gob shut !

Wonder who the new management will be ?

Open your gob, go on, BB. Put your exact predictions down in black and white (well, black and very light grey). I'd genuinely like to see what you think will happen as you appear to be quite confident in putting forward your teasers.

 

[Highbury_Blade]

The decision will be made in December 2010. We vastly improve our chances of winning the bid by having firm plans and planning permission. I don't think United have to actually BUILD anything in advance of the decision.

No, but presumedly we have to commit to building something.

 

[Micalijo]

Indeed. Though the global links presumably add value even if we don't own them.

Speaking of which, where are all the Sao Paulo youth players that were destined to join?

I know we are all speculating but I just don't see any value in these tie-ups and the Chengdu ownership could be a real problem in my opinion. People want clean investments these days ie SUFC Ltd. I suppose McCabe could sell Ltd from plc keeping plc as owners of Chengdue if he fancies a few car parks in Chengdu.

I do get involved in a few company sales and when the deals complete, everything on the consideration payable slate is backed up by actual figures. Stock, debt, assets, cash etc. The only variable is what can loosely be described as goodwill but usually that can be traced back to a profit multiple. Say for example, the net assets (excl. goodwill) of a business are £1m. If the annual profit is £500k the purchaser may say I'll give you 5 times profit making £2.5m total. The goodwill is therefore £1.5m - or more accurately the purchaser has paid £1.5m more than the company is worth on that day because he sees a chance of mamking more than the £1.5m over the next few years.

There is no way imo that an investor will say 'and by the way I'll give you £500k as well for the 'player agreement' you have with West Coast.' Let us say the next Messi is currently a 13 years old lad with WCM. Will we ever see him - no way. It is worthless imo.

 

[Flatulent_Bob]

I think a £200K investment which gets us into the Chinese market is a bargain and will be attractive for anyone else wanting to get their business into this potentially huge area.

 

[Micalijo]

I think a £200K investment which gets us into the Chinese market is a bargain and will be attractive for anyone else wanting to get their business into this potentially huge area.

Perfectly sound point Bob but what exactly do you mean by 'Chinese market'. Are you suggesting Chinese people can afford to buy £30 football shirts? Or, are you saying that for example if Panasonic or Red Bull bought Chengdu they have a decent marketing base for low cost? I can see that, but I don't really think it is worth anything significant to SUFC. The buyer would be taking all the risks and consequently pays very little.

The potential benefits are just so far in the future as to be meaningless. Yes China is developing but SUFC will not reap any benefit I'm afraid imo.

 

[Wards]

Open your gob, go on, BB. Put your exact predictions down in black and white (well, black and very light grey). I'd genuinely like to see what you think will happen as you appear to be quite confident in putting forward your teasers.

You'll never get anything approaching a straight answer :thumbup:

 

[Northyorksblade]

you end up in a oligopolistic system where it is virtually impossible for new entrants to challenge the dominance of the major firms.

Has anyone in the history of mankind, apart from Darren, ever used that word? I think he made it up.

 

[Bramley]

Has anyone actually found a link to this on the YP website? Or a link to this anywhere?

 

[alcoblade]

Not necessarily. If McCabe decides that he wants to call in his loans from us to fund a championship winning side in Hungary, then that will impact on us.

After all, Ferencvaros are a far more likely bet to get to the champions league money than we are, and at far less outlay too. If I was a businessman I know which team I’d be investing more in.

ah, but that's a very different issue. All chairman have outaide interests that might affect the way they invest in their other interests. It would be harsh and not really tangeable to hold this as a negative. I'm talking about the interests within the club structure.

UTB

 

[alcoblade]

The decision will be made in December 2010. We vastly improve our chances of winning the bid by having firm plans and planning permission. I don't think United have to actually BUILD anything in advance of the decision.

But then by December 2010, when the decision's made, surely we're committed to following through with the stadium development. It's impossible for us, within that time, to become a club that could justify a 44,000 capacity stadium. Being an established premiership club was one of the initial specs, if memory serves.

UTB

 

[Bramley]

No, but presumedly we have to commit to building something.

Not at all, we'll have 3 years permission within which we'll need to activate it (then it will be indefinitely permitted) by satisfying conditions and getting a Building Inspector out. Basically its a doddle to get the permission activated at minimal cost (notwithstanding structural reports, land remediation reports, involved in the Planning Application) indefinitely. Obviously this adds value in two respects: (i) the FA will see we've got our house in order, and; (ii) it'll add (some) value if someone is looking to take us over.

 

[beightonblade]

Open your gob, go on, BB. Put your exact predictions down in black and white (well, black and very light grey). I'd genuinely like to see what you think will happen as you appear to be quite confident in putting forward your teasers.

Hey up Tony ..............

Just mi humble opinion Its clear to me McCabe has been doing the preparation to introduce new investors the credit crunch mixed things up a bit but when i said yonks ago he wud de-list get the cheats money and sell up i was ridiculled well he de-listed and got the cheats money now i think it will be gently gently ..... new investors then goodbye......
the only thing i am confused about is the freehold to BDTBL..... one thought wud be McCabe retains it and leases it back to The Blades. he like property Mr McCabe.

time will tell Tony.

 

[Bramley]

The decision will be made in December 2010. We vastly improve our chances of winning the bid by having firm plans and planning permission. I don't think United have to actually BUILD anything in advance of the decision.

Pretty much correct.

 

[Bramley]

Hey up Tony ..............

Just mi humble opinion Its clear to me McCabe has been doing the preparation to introduce new investors the credit crunch mixed things up a bit but when i said yonks ago he wud de-list get the cheats money and sell up i was ridiculled well he de-listed and got the cheats money now i think it will be gently gently ..... new investors then goodbye......
the only thing i am confused about is the freehold to BDTBL..... one thought wud be McCabe retains it and leases it back to The Blades. he like property Mr McCabe.

time will tell Tony.

Cheats money is coming to us incrementally over a period of time. So if McCabe walks in the next few years he certainly won't see most of it.