Platini's latest comments - 'cheats' that owe 1.5 billion

gosplan

Found this article in the Sunday Times this week rather interesting:

http://www.timesonline.co.uk/tol/sport/columnists/rod_liddle/article4087699.ece

I have to say I agree in some way with Platini on this. Obviously business has merged with football and created a new entity but something is wrong when the two teams contesting the champions league final owe 1.5 billion between them.

This isn't a jibe at Man U or anything. They just had savvy staff who brought the club public and were eventually bought out as can happen. However, despite the trophies(which they were winning long before the sick amounts of cash) I'm sure that even the most faithful of Man U fans would rather not have the club in such debt.

Should football clubs be run purely as investment ventures or is something wrong?

Mitch Connor

gosplan wrote: »

Found this article in the Sunday Times this week rather interesting:

http://www.timesonline.co.uk/tol/sport/columnists/rod_liddle/article4087699.ece

I have to say I agree in some way with Platini on this. Obviously business has merged with football and created a new entity but something is wrong when the two teams contesting the champions league final owe 1.5 billion between them.

This isn't a jibe at Man U or anything. They just had savvy staff who brought the club public and were eventually bought out as can happen. However, despite the trophies(which they were winning long before the sick amounts of cash) I'm sure that even the most faithful of Man U fans would rather not have the club in such debt.

Should football clubs be run purely as investment ventures or is something wrong?

In germany you can't be more than 4million in debt, and still play.

Anyway, one thing about the United debt, I reckon it would be fair to say United are winning in spite of the debt and not because of it. Other clubs, including the beloved Real Madrid win because they get people to pay off their debts for them.

_blank_

Tauren wrote: »

In germany you can't be more than 4million in debt, and still play.

Anyway, one thing about the United debt, I reckon it would be fair to say United are winning in spite of the debt and not because of it. Other clubs, including the beloved Real Madrid win because they get people to pay off their debts for them.

ffs, I've seen some red-tinted specs in my time, but that takes the cake.

Debt is debt is debt.

leninbenjamin

heh... it's funny Platini should give out about debt. UEFA and FIFA are as money hungry as any of the clubs and domestic leagues, and have effectively embraced and fostered this culture.

edit:

DesF wrote: »

Debt is debt is debt.

what are ya, a luddite? go over to the economics/investment forums and they'll be the first to explain the different types of debt. the modern world as we know it wouldn't survive without it, in all its forms. and you can still be profitable and have debt. cashflow comes into it too... it's unavoidable.

Mitch Connor

DesF wrote: »

ffs, I've seen some red-tinted specs in my time, but that takes the cake.

Debt is debt is debt.

Debt is debt - but the argument is more than that, imo.

The argument has been put forward that United are succesull because of the debt, they won the CL because of the debt. This isn't true imo. United's net spend since the take-over is down on what it was before the takeover. United are not in debt because they have spent 100's of millions on players and wages like Chelsea are, but because some one bought the club and put the purchase on to the club. It is very different IMO.

It is crap, and i think it will ultimately spell the end of United, and i hate the Glazers for it; but United's success has not been built on a mountain of debt. A mountain of debt has been built on the success.

gucci

Tauren wrote: »

Debt is debt - but the argument is more than that, imo.

It is crap, and i think it will ultimately spell the end of United, and i hate the Glazers for it; but United's success has not been built on a mountain of debt. A mountain of debt has been built on the success.

Really? Do you think that will be how it will go? For Man United or for Premiership football in general? Or do you think that they will be able to have the Man Utd Brand built up enough that they will be able to keep drawing in enough money and shrewdly manage it to ride out any potential crisis?

grames_bond

“Harro Engrish people! Manchester United! Denis Raw!”

im sorry but am i the only one that found this slightly racist?! which put me off the article itself. but on the topic, if the debt is manageable there shouldnt be a problem...thats the long and short of it!

DSB

grames_bond wrote: »

im sorry but am i the only one that found this slightly racist?! which put me off the article itself. but on the topic, if the debt is manageable there shouldnt be a problem...thats the long and short of it!

I wouldn't call imitating an accent racist personally.

_blank_

Neither would I, biy.

But sure, throwing around the racist card is par for the course.

gucci

DesF wrote: »

is par for the course.

Wow, well done on educating me on how that phrase should be used! I always thought it was "part of the course", but luckily i dont believe i have ever used it so i have got away with it.:o

gosplan

grames_bond wrote: »

if the debt is manageable there shouldnt be a problem...thats the long and short of it!

I don't think this makes sense - the debt is managable because Man U are currently very succcessful. In Chelsea's case the debt is in no way managable but they're not currently being asked to pay it off so it is managable(if you get what I mean).

I'd have no problem if Abramovich came in and pumped his own money into Chelsea but he's essentially underwriting excessive spending by the club. if he felt it was needed, he could bankrupt the club, strip it's assets and sell them off at any time. Bye Bye Chelsea.

The Glazers debt owns Man U. God knows how the credit crunch impacted on that. What if something like Heysel were to happen again and English clubs got kicked out of the Champions league? Bye Bye Man U.

I guess my feeling is that entrapreneurs can shoot for the stars, go bust, sell the company, declare themselves bankrupt and start again. But when the company is a club, they'd be selling something that's quite important to a lot of people. Essentially these clubs are now a part of financial speculation and speculation can always go wrong.

Mitch Connor

gucci wrote: »

Really? Do you think that will be how it will go? For Man United or for Premiership football in general? Or do you think that they will be able to have the Man Utd Brand built up enough that they will be able to keep drawing in enough money and shrewdly manage it to ride out any potential crisis?

People constantly point to how they turned the Bucs into a massively profitably organisation, mulitplying their income many times over, but i have never seen this a viable comparison for united.

There are not many clubs in world football that operated at a decent profit - United were one of the few andone of the best. Commercially, United were already the best, and had extensive opperations all over the globe. In order to even service the debt, United need to become massively more profitable as an entity then they already are; and I don't think there are enough unexplored avenues to eek more money from to make United as profitable as they need to become.

Indeed - the glazers have been trying to refinance for a while now, because the PIK (something like that ) are going to become active soon, and they have truly massive interest repayments attached. This Global credit crunch has come at a terible time for the Glazers and United as the massive loans, with massive interest repayments can be refinanced.

The only way I can see the Glazers really getting United out of this mess is through individual TV deals; which although it would be great for United, it is something I never want to see, as it would all but kill the English game. ESPN kicking in to the latest TV deal might help matters though, I suppose.

United as a club will have to pay this debt off, Chelsea do not. United would have been able to spend this money without getting loads prior to the takeover, Chelsea would not. United do not have a billionaire bailing them out (Abramovic) or a government (Real Madrid).

It is the same at Liverpool - potentially in massive debt, because their owners can't actually afford them.

Anyway, that is all off topic i suppose, and more central to United.

Basically, I don't like the debt United now has, but i don't think th edebt is the basis of our success as it is with Chelsea, which I believe is the central point of this argument.

I would love to see clubs ran without billionaire backing, with their success based on the players they can bring through and buy within their means.

grahamo

I feel Platini is very 'anti-premier league'. I wonder does he resent the fact that all the top 4 premier league teams have qualified for the final in the last 4 years?
I don't like the way football is going with greedy businessmen with no interest in the game taking over clubs either but Platini and co. still have their fingers in the pie. UEFA make a lot of money from premier league teams (who have large followings around the world equalling big money TV rights deals for UEFA) competing in their competitions.

therecklessone

gosplan wrote: »

Essentially these clubs are now a part of financial speculation and speculation can always go wrong.

If the ECB raised interest rates to 20% I couldn't afford to pay my mortgage but that's unlikely to happen. I can guarantee you that my bank stress tested my ability to pay my mortgage in the event of some interest rate rise though.

In the case of United it is reasonable to assume they will continue to compete in the CL, continue to attract large sponsorship deals, and continue to receive large amounts of TV money. As long as projected income meets spending (and then some) I'm not too bothered with a club being in debt.

I think Chelsea are unique in that they are so far away from income covering expenditure.

SectionF

Rod Liddle speaks the truth, again.
The EPL, at least at the top, has become little more than a plaything for the super-rich. How can so many people be so easily duped?

gosplan

grahamo wrote: »

I feel Platini is very 'anti-premier league'. I wonder does he resent the fact that all the top 4 premier league teams have qualified for the final in the last 4 years?
I don't like the way football is going with greedy businessmen with no interest in the game taking over clubs either but Platini and co. still have their fingers in the pie. UEFA make a lot of money from premier league teams (who have large followings around the world equalling big money TV rights deals for UEFA) competing in their competitions.

People watch the premierleague because it's exciting football and it's where a lot of the stars are now but I don't think it's correct to assume that it has created new football fans, just won some over.

I think Platini and Blatter are actually on the ball with this one. Fincancial dominance should not be the deciding factor in a league's success on an international level - particularly if that financial dominance means overseas debt.

I honestly think that if Jack Walker had have bene a hell of a lot richer and more ambitious then they wouldn't have cared so much if a bankrolled Blackburn won the champions league a couple of times. He said that his funding Blackburn was 'good for me, good for my family and good for Blackburn'. It had nothing to do with being a sound investment or a debt that was managable.

Italy has dynasties in control of football clubs but these families are the clubs they control.

The Glazers own Man U because it made sense on a balance sheet. Abramovich owns Chelsea because they wer the only team in a champions league spot that he could buy. Now Trashcan Sinatra is joining in and will seemingly fork out enough money until Man City are part of a big 5 or 4 or whatever. Just not good.

grahamo

I agree with you that it definitely isn't an even playing field but why doesn't Platini have a go at the likes of Real Madrid who more than helped to vastly overinflate the transfer markets. They run up massive debts and have it wrote off by the government.

AnCapaillMor

Kind of agreee but its tainted because Platini's definately got it in for England. Its like billionaires have only started investing in clubs only recently. Its been going for years in Italy and spain, morratti, burelesconi. Real have been saved so many times by over generous creditors it ridiculous. Barca i'd say are in the same state, they were royally screwed a few years back. In united case i think its harsh, they're not operating at a loss, the debt is from the takeover. 'Them' is a different story, consistently with record annual losses.

Y2J_MUFC

DesF wrote: »

ffs, I've seen some red-tinted specs in my time, but that takes the cake.

Debt is debt is debt.

Red-tinted specs? How has debt helped United? Debt is debt. How has it helped?

gosplan

Y2J_MUFC wrote: »

Red-tinted specs? How has debt helped United? Debt is debt. How has it helped?

Take one title winning squad.
Find 60 million from somewhere.
Add Hargreaves, Anderson and Nani.
Stir and allow to set and you've got a double winning squad.

60 million on fringe players is an awful lot to spend without cashing in on anyone else.

Galvasean

I always find it mad how football clubs can manage to spend millions on players when they are millions in debt. Like spending money you don't have. i wish i could buy things when I had no money. :pac:

gucci

Galvasean wrote: »

I always find it mad how football clubs can manage to spend millions on players when they are millions in debt. Like spending money you don't have. i wish i could buy things when I had no money. :pac:

Yes but if you have assets to borrow money against (ie a stadium or in your personal case an income or property) then you too can get credit to spend.

glad to be of help there.

Predhead

Galvasean wrote: »

I always find it mad how football clubs can manage to spend millions on players when they are millions in debt. Like spending money you don't have. i wish i could buy things when I had no money. :pac:

FFS. This thread is ridiculous. Ever had a bank loan you topped up?! It's not rocket science, it's debt on a grander scale.

gosplan

Predhead wrote: »

FFS. This thread is ridiculous. Ever had a bank loan you topped up?! It's not rocket science, it's debt on a grander scale.

And I think the point was whether this was a good thing or not and whether it should be allowed or not.

aidan24326

Much ado about nothing. The whole frickin world is built on debt and lots of it. The USA are so far up to their necks in debt that they'll never clear it (8 trillion at latest estimate).

A club like United can afford it due to their high income. The problems begin when smaller (i.e less financially powerful) clubs like Leeds get into massive debt and simply haven't got the income of a club like United and can't afford to pay it off. United are like the guy who earns 200K per year and has a massive mortgage, it's alot of debt but he can afford it.

Chelsea's situation is unique in that they're being bankrolled by a mega-wealthy billionaire who doesn't need to balance the books as he effectively has a bottomless pit of money. Though I'm not sure what repercussions that could have for Chelsea in the longer term if Roman decided to take his rubles elsewhere.

Unearthly

The lack of understanding in business in this topic is ****ing hillarious:D

An Citeog

Unearthly wrote: »

The lack of understanding in business in this topic is ****ing hillarious:D

+1

AnCapaillMor wrote: »

Kind of agreee but its tainted because Platini's definately got it in for England. Its like billionaires have only started investing in clubs only recently. Its been going for years in Italy and spain, morratti, burelesconi. Real have been saved so many times by over generous creditors it ridiculous. Barca i'd say are in the same state, they were royally screwed a few years back. In united case i think its harsh, they're not operating at a loss, the debt is from the takeover. 'Them' is a different story, consistently with record annual losses.

I posted links to a really good documentary on the Barça situation here. It gives a fairly good insight into the business side of football aswell.

OPENROAD

Platini certainly seems to have it in for English football at the moment.

Looking at some of the figures however he may have a point, Man Utd, Chelsea and Liverpool have run up huge debts.

If Liverpool were to miss out on champions league qulaification, how would this impact on the clubs finances. What if they fail to qualify for two consecutive seasons. Loss revenue from cl would hit them badly

This is one of the reasons I am happy with Arsene Wengers approach, the clubs debt is based on the new stadium and not player transfers, Wengers aproach is to continue to spend within the clubs means i.e revenue generated year on year.

RasTa

gosplan wrote: »

Take one title winning squad.
Find 60 million from somewhere.
Add Hargreaves, Anderson and Nani.
Stir and allow to set and you've got a double winning squad.

60 million on fringe players is an awful lot to spend without cashing in on anyone else.

I like how you just make your figures up.

smiaras

This post has been deleted.

Mitch Connor

gosplan wrote: »

Take one title winning squad.
Find 60 million from somewhere.
Add Hargreaves, Anderson and Nani.
Stir and allow to set and you've got a double winning squad.

60 million on fringe players is an awful lot to spend without cashing in on anyone else.

But United would have easily been able to spend that cash prior to the take-over, and the debt. The debt has made it HARDER for United to spend that kind of cash (net-spend is down). United's debt has not HELPED them in anyway, AND it is debt that UNITED have to pay off - a billionaire isn't going to wipe their debt.

themont85

Man Utd make operational profits every year i.e revenue(sponsors, tv ect) minus the expenses such as wages. This money is ploughed into a huge debt accumalated not by poor financial managament but a takeover by a proper investor. Chelsea is the opposite, mismanaged for years with debts before Abramovich came, now still not operating profitably and no proper investor. Rod Liddle, Platini ect should realise that is life. Football can make huge money when managed properly like Man Utd are and draws investors. Its the same in all takeovers, financed by debt, that is Man Utd. If they had bad accounts Glazer wouldn't have looked at them, but he saw potential. Liddle ect fail to draw a distinction, Chelsea are the ultimate living the dream club, its not an investment but a toy, doesn't look sustainable at all.

Debt is debt but its how its accumalted and its ability to be payed that matter. You can't lump these two different clubs into one bracket.

Tauren wrote: »

But United would have easily been able to spend that cash prior to the take-over, and the debt. The debt has made it HARDER for United to spend that kind of cash (net-spend is down). United's debt has not HELPED them in anyway, AND it is debt that UNITED have to pay off - a billionaire isn't going to wipe their debt.

Damn right.

leninbenjamin

gosplan wrote: »

Take one title winning squad.
Find 60 million from somewhere.
Add Hargreaves, Anderson and Nani.
Stir and allow to set and you've got a double winning squad.

60 million on fringe players is an awful lot to spend without cashing in on anyone else.

i don't think you understand how United's debt works. United's debt is leveraged against the club itself, it's purpose was to finance the takeover. the transfer fees were financed by the clubs revenue, which still left approximately 50 million to pay off that debt. there is nothing about United's debt that gives them a competitive advantage. it's completely different to Chelsea's who will probably never pay back that half a billion or so they owe Roman, or Real Madrid's, or the Italian teams mentioned above who's debt arose from the clubs overspending on the day to day stuff. Platini is a bitter fool who doesn't like to see the rebalance of footballing power. he doesn't want it balanced mind, he just want's all his old mates to have it (note all the empty promises he made to get into power). just like Blatter does with his FIFA delegate chums and so on... (remember all the unaccounted for millions that went to developing football in the third world?)

<Carlsberg voice-over>
FIFA, probably the most corrupt institution in the world.
</Carlsberg voice-over>

the authorities just can't find any evidence to pin it on them because of all the lawyers they can afford.

OPENROAD

themont85 wrote: »

Man Utd make operational profits every year i.e revenue(sponsors, tv ect) minus the expenses such as wages. This money is ploughed into a huge debt accumalated not by poor financial managament but a takeover by a proper investor.

I might be wrong on this so feel free to correct me, but Utd are not actually paying off the debt principal rather they are only PARTIALLY paying off the large annual interest amounts. You are correct that utds operational profits are large but you are still making large overall losses.

leninbenjamin

OPENROAD wrote: »

I might be wrong on this so feel free to correct me, but Utd are not actually paying off the debt principal rather they are only PARTIALLY paying off the large annual interest amounts. You are correct that utds operational profits are large but you are still making large overall losses.

Indeed. thank the credit crunch for that primarily. but what's important to note; credit crunch and global slowdown and all, United are still outperforming most.