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Bitter_Hawk1272 t1_iulnopg wrote

Why does a net finance loss come before the income and expenses?

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Hattix t1_iulp0pz wrote

When the Glazers acquired the club, they used borrowed money to finance their acquisition (including an utterly stupid 20% APR PIK loan!), and they assigned that debt to the club itself.

So Manchester United took on around £750 million pounds of debt to make itself private in the early 2000s.

It's refinanced (and refloated) since, but remains in debt and has to service that debt - It is still around £350 million in debt, has spent a billion pounds on interest payments

For this service, the Glazers pay themselves around £30 million a year.

On the diagram, the finance works that way to make it easier to see!

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getwhatyoudesire t1_iulv45z wrote

Utd get £34m in tax cuts, Glazers make £30m a year. So the UK taxpayer is paying this dickheads wages, fantastic.

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Money_Calm t1_iuniepm wrote

A company that loses money every year getting a tax break =/= the taxpayers funding it

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Eton77 t1_iuo0f2c wrote

Indirectly, that’s exactly what it is. If they didn’t make loses, they wouldn’t get tax cuts, thus the govt gets more money.

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FakeHaiTohFekDo t1_iuppjz0 wrote

Dividend is post tax not pre-tax so you're wrong there. So only the club is funding the glazers not the govt

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Ericgzg t1_iurunuc wrote

Reddits understanding of finance and taxes in a nutshell.

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OnundTreefoot t1_iuppbhb wrote

Between the taxes on salaries, merchandise, television revenue, the economic benefits that multiply well beyond the team itself (MU supports many secondary and tertiary businesses) UK citizens are getting an economic boom all year long from MU. The $34m in "tax breaks" is a token drop in the bucket compared to the money the government is taking in from MU and its doings.

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muu411 t1_iunf46u wrote

Worth noting that this method of buying the club wouldn’t even be allowed by England’s Football Association now

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wozza365 t1_iulpxov wrote

Owners of West Ham have been doing something similar. They "bought" the club but the club is just in debt to them and paying interest on the loans

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slothonvacay t1_iulvmzx wrote

So how does the net loss get paid out? Do they have a stockpile of cash? Do they take on even more loans?

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ShapersB t1_iumz5xt wrote

More loans. They either refinance their loans or draw on their flexible credit.

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slothonvacay t1_iumzn06 wrote

So they take out loans to pay off their loan interest. Sounds promising

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ShapersB t1_iunpu5p wrote

Not exactly. They take out loans to cover the loss because they've used up the cash reserves. The interests are only part of the losses.

That being said, the total cost of the Glazers' ownership of United has surpassed £1.6 billions when you include their recent sale of shares that should have benefited the club that actually paid for them.

Swiss Ramble source and the entire thread in threadreader.

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Whiskeyjack1977 t1_iunxehy wrote

They also take loans to finance their dividends, leeches gotta leech!

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