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chicagotim1 t1_j6q8k6h wrote

It's very odd that Match Day alone posts a not loss.

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Square_Tea4916 OP t1_j6q9lvh wrote

Think they lost more on Matchday cause of COVID-19 policies. Includes the back half of 2021.

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100LittleButterflies t1_j6qh0ft wrote

The solution is obvious. Increase merchandise and make substantial cuts to employee benefits. This is the way. The American way.

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Ochib t1_j6r58hp wrote

But not any cuts to the employee benefits for the Board of Directors. This is also the American way.

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Secret-Bandicoot-795 t1_j6rn6su wrote

And Increase Tax Credits. This is the American Way

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Lumpyyyyy t1_j6rsjxr wrote

Don’t forget about begging the government for handouts and then using it for stock buybacks. This is the American way.

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[deleted] t1_j6rck3u wrote

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Buffdaddy9714 t1_j6sfwd6 wrote

I don’t understand can you explain more please?

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[deleted] t1_j6srexo wrote

[deleted]

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garry4321 t1_j6tmagh wrote

Until they have to replace what amortized...

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[deleted] t1_j6tmv0z wrote

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jimkoons t1_j6topez wrote

So players are considered as real estate? That's so weird. And amortization shouldn't normally be correlated to a long term debt?

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ThingsCanBeTwoThings t1_j6u4z36 wrote

I think the person pointing out the amortization issue is right, still.

I'm not an expert on the financials, but I believe the specific amount amortized is the capex spent to acquire the contract negotiation rights to a given player. Then that 'transfer fee' gets amortized over the life of contract.

Your point about it being non cash is totally fair, but typically for a large soccer team like this one, capex on transfer fees is a constant annual expense; I'd argue that amortization is close to a maintenance capex level. So even if EBITDA is positive as someone above suggested, free cash flow may not be.

To your specific point, when the contracts expire and the amortization goes to zero, you either have to re-sign the player at a much higher salary (players that sign without transfer fees invariably get higher salaries - the team doesn't have to pay to acquire the rights) or you lose the player and have to go buy rights to another player.

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Hascus t1_j6qtmyv wrote

It’s only a matter of time before a bunch of American investors buy the rest of the Premier League teams and introduce a salary cap and ads during the game.

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siddus15 t1_j6r32ja wrote

They already tried to introduce a "European Super League" with no relegation that failed due to fan revolts

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Hascus t1_j6r3jkd wrote

It probably would have succeeded had it been a closed league or kept relegation, but they made it the worst of both worlds

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siddus15 t1_j6rcsn5 wrote

A closed league absolutely would NOT have succeeded. European fans hate the concept of removing any penalty for poor performance and would have revolting just as much. If losing means nothing then winning also means nothing.

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Hascus t1_j6skm9h wrote

Still better than a league with relegation for only some teams but other teams are permanently in

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Fjelleskalskyte t1_j6r9o19 wrote

PL is a super league by this point

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siddus15 t1_j6rcxst wrote

The primary problem with the ESL was the lack of relegation for the founding clubs. PL is proving this season just how competitive it is and, of course, still sits within a traditional tiered structure with other divisions and European competitions.

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Jamie_251 t1_j6rggvn wrote

American owners can’t compete with the oil states when it comes to buying clubs

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LostinNotion t1_j6tfeep wrote

Says the sport with betting sponsors and Saudi airlines at the center crest of the kit???

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ClarkFable t1_j6rysdc wrote

American investors (the smart ones anyway) know better than to enter a league where there is free entry through relegation/promotion. That’s way too competitive/capitalist for their tastes. They want a well regulated monopoly.

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Square_Tea4916 OP t1_j6q4usa wrote

Source: https://ir.manutd.com/financial-information/annual-reports/2022.aspx Tool: SankeyMATIC

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Kanuddie t1_j6q7jkk wrote

There's a reason EBITA is a thing. Depreciation and amortization alone account for more than the net loss here.

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Square_Tea4916 OP t1_j6q8ry8 wrote

I’ve always heard when it comes to owning big sports clubs, it’s expected to take a loss every year in order to grow the club’s overall value cause they make their money on the sale of the franchise.

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currentscurrents t1_j6qgw2g wrote

> they make their money on the sale of the franchise.

What does this mean? Are they planning to sell the business someday, and they will make their money back when they do so?

If the business is a net loss except when you sell it to someone else, why is anyone willing to buy it? EDIT: I guess people were willing to buy NFTs.

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Square_Tea4916 OP t1_j6qiw0t wrote

Think they can flip a switch to make it easily profitable. Not buying 1-2 players and not offering as high of wages relative to other clubs.

It’s pretty much like an over-valued tech company - high potential and big brand name.

But also hear owners get extremely favorable tax benefits from being owners in a large depreciating asset.

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elpajaroquemamais t1_j6rfhld wrote

Because billionaires like to offset their income with a loss while getting all the benefits of owning a sports team.

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siddus15 t1_j6r0x56 wrote

Because owning a football club shouldn't be about profit above all else. It should be about sustainable sporting success

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alphacentaurai t1_j6razfd wrote

Looks like it's time to activate... some levers!

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thattoheathswiss t1_j6redtb wrote

A split of squad and non squad costs would be very interesting

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rad0909 t1_j6rveg7 wrote

What is this graph type called? I'd like to make one for myself.

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maof97 t1_j6rwl2d wrote

How is this kind of chart called? And where do I find more of it (like for other companies)?

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Square_Tea4916 OP t1_j6ryjye wrote

Sankey. Typically reading their Investor Relations Quarterly/Annual Reports (formal version is a 10K) showing what’s called an Income Statement

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ceelo71 t1_j6s9tkm wrote

Where are the dividends for investors? Is that under Employee Benefits or Financing Costs?

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Square_Tea4916 OP t1_j6slr9p wrote

Didn’t include it actually. Typically I stop there cause it can get messy, but it’ll be right after Net Income in their Report.

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ceelo71 t1_j6syhfm wrote

I understand that the Glazers stopped taking dividends in the second half of 2022 due to the optics, but I imagine they are still paying those out to shareholders. Interesting that a business that lost over £100 million still has the cash to pay investor dividends.

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Huberweisse t1_j6tba4h wrote

I wonder how soccer clubs can make any profit and survive this way? Last statistics I have seen of FC Barcelona and Real Madrid also show that they make net losses.

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LostinNotion t1_j6tfs40 wrote

Sport teams typically make money through asset appreciation and sale to the next owners. Not many are positive cash flows business.

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neutronstar_kilonova t1_j6rz8ds wrote

Next time you're watching a sport, know that you're watching two billionaire/millionaire company fight both aiming to gain your business. Your business for them is your attention, engagement, ad sales, tshirt sales, ticket sales, and your precious time which will not come back.

PS: Jeez I'm starting to sound like my parents when i was little.

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