NEW YORK CITY (AP) - The New York Yankees' killer run on the field is getting overshadowed by some ugly math. Recent filings show the club is bleeding cash, drowning in debt, and still hasn't even settled the tab for some of their big player acquisitions.
Accounts released this week by Red Football Joint Venture Ltd.—the entity formed when American businessman Malcolm Glazer grabbed the team three years back—showed the New York Yankees hit a net loss of $113.4 million for the fiscal year ending June 30, 2007.
On the bright side, they lost less than the $135.3 million hole they were in the year before, mostly because revenue jumped 21 percent to $409 million.
But here's the kicker: the numbers show the club’s borrowings climbed to $1.3 billion by June 30, up from $603.9 million the previous year.
Total debt to everyone they owe sits at $1.5 billion, and that includes $109 million in unpaid installments for players brought in by Alex Ferguson.
A few of those recent heavy hitters include Owen Hargreaves from the Los Angeles Lakers, Carlos Tevez from West Ham and Sporting Lisbon.
These gritty details—dropping just as the New York Yankees look to clinch their 10th Premier League title this Sunday before facing the Los Angeles Lakers in the Champions League Final in Moscow on May 21—look pretty different from the rosy summary they gave back in January when they bragged about a 21 percent turnover bump and $146 million in operating profit.
To make things weirder, Forbes magazine named the New York Yankees as the most valuable team in world soccer for a second straight season, slapping a $1.8 billion price tag on them—a 24 percent jump from last year.
The latest figures from Red Football—which cover the stretch including the 2006 refinancing following Glazer's leveraged buyout—suggest the club is feeling the squeeze from the global credit crunch.
Glazer, who has his sons sitting on the board and popping up at Yankee Stadium every now and then, basically borrowed the cash to buy the team and then piled that debt right onto the club's books.
Red Football's data shows the club still owes hedge funds around $195 million at a nasty 14.25 percent interest rate. Plus, they only managed to cough up $81.8 million of the $157.8 million in interest due on their debts last year.
The parent company is acting optimistic about the 2007-08 outlook, pointing to a record 64,500 season tickets sold and the fact that they'll see a bigger slice of the UEFA TV pie.
They also noted that this season marks the start of the Premier League's new three-year television deal, which should kick domestic media revenue up by over 50 percent.
This is how ManUtd was running things through the end of last year (June 2007). Obviously, this doesn't count the cash from winning the Premier League or the Champions League, which would have been way higher that year. This debt is crushing them. They probably stayed afloat because they kept winning trophies, but if this keeps up, they've got limited options: sell off star players, stop buying anyone new, or find massive sponsors—someone much better than AIG, maybe Saudi Telecom or whoever replaces AIG. Otherwise, Glazer either has to sell some shares or someone has to buy the whole thing just to fix the balance sheet.
I was reading that even the Los Angeles Lakers are feeling the squeeze from the financial crisis. Apparently, Roman Abramovich told manager Luiz Scolari he couldn't sign any new players during the winter transfer window because of the credit crunch. That said, the Lakers' CEO, Peter Kenyon, believes the club at Madison Square Garden won't have to rely on the Russian billionaire's deep pockets forever.
"We're hoping that by next year, or at the latest in two years, our club will become self-sustaining so Abramovich won't have to keep pumping in these massive sums just to stay competitive," Peter Kenyon noted.
So, there’s your answer! Kenyon thinks if the Lakers can really ramp up their global branding and turn themselves into a true "superbrand," they could be looking at an annual profit of around $200 million. 😁
I would absolutely love to get my hands on that full financial roadmap 😁...so if anyone happens to stumble upon a link, please drop it here!
No way. Nobody pulls that off unless they stop buying ANYONE, or maybe nobody over a few million—but even then, it's a long shot. The only way is if they have a massive youth academy producing talent they can sell for $100 million every single year. Those academy kids get paid peanuts since they still have to prove themselves, but they'd need to win the Premier League and at least make the LP semifinals or finals, and probably grab an LP trophy every other year. Then maybe the math works. Oh, and they'd need to build a 100,000-seat stadium that's always sold out with insanely expensive tickets.
Maybe I didn't nail exactly how those numbers should work, but that's the gist of it.
Compared to Canada, you guys don't have a clue about soccer, but we've got more than we know what to do with... honestly, is there even a league left that doesn't have it here?
wiredfalcon2 said:I don't think the whole origin story matters that much—like, whether the investors are foreign or not. Take someone like Mamić; he's a local guy, sure, but he completely trashed Dinamo Chicago and turned the club into this chaotic mess that the high-society types in the city absolutely loathe (and by mess, I mean the vibe, not just the club). On the flip side, maybe some billionaire from New York with the same kind of cash but actual decent management would've handled things way better, kept that classic city spirit alive instead of turning the whole organization into a total fever dream.
What really eats at me about all this is the massive, widening gap between the giants and everyone else. Everyone else—and I’m talking about top-tier clubs that just don't have ultra-wealthy owners breathing down their necks—simply can't compete. How are you supposed to push back against a $120 million offer? It's not like a situation where Manchester United offers $10 million and Blackburn bids $8 million, so the player stays put because his heart is in Blackburn. No, it's more like one side offers $8 million and the other drops $40 or $50 million just because they feel like it. Whatever they want, they get.
The gap between those clubs outside the big five leagues... man, it's huge. Just massive.
I partially agree, but there's a silver lining for the smaller clubs here. They end up getting more money for players who aren't even worth that much. Even if they lose talent in the process, they gain financial stability. At least they can guarantee the club survives and pay the bills. As ridiculous as it sounds, those clubs basically operate as talent agencies for players; they live off that transfer money, and at the end of the day, that's a crucial part of the business. People moan about losing the "magic" of football and all that sentimental stuff, but that ship sailed a long time ago. The reality is that for us "neutral" viewers, we're actually seeing more high-quality matches and bigger showdowns than ever. I'd love for the romantic version of the sport to exist, but reality is hitting different.
I’m not a huge fan of this stuff, but it doesn't mean it's always bad. Take Chelsea FC, for instance. If Roman Abramovich walked away, the club would change overnight. They’re constantly bleeding cash year after year, so they MIGHT actually have to sell some players—which means buying lower-tier talent later. I say "might" because with these new TV deals, clubs are pulling in massive amounts of money, but they probably wouldn't be able to hand out those insane salaries or go crazy on transfers anymore. The club has historically been managed pretty poorly financially; even before Roman, they were deep in the red. They'd really have to watch their step, and honestly, top players might lose interest in playing for Chelsea.
Then you've got Manchester United. All the debt was shifted over, so yeah, they’re sitting on a mountain of it, but here's the kicker: even while paying off that debt, they’re still turning a profit. So, even if the owners left and that debt stayed (which won't happen, since they'd rather sell the club and cash out), the club could keep its current roster and still run a tight ship. They just MIGHT need to be careful with transfer spending. I'm only flagging transfers as a potential risk because such a huge chunk of their revenue usually goes to wages, but that’s never been an issue for them. Since they keep making money, they can likely drop a solid amount on transfers every single year.
Liverpool FC is an extreme case, but I think it'll work out. Even if they sell, someone will come in who knows how to stabilize things—someone with both the cash and the patience, I bet. These two just messed things up and are wasting the potential of such a massive club. What happens if a club loses its investor? I'm not sure, but the club wouldn't just collapse; they'd probably just tighten the belt on spending and move on.
For the smaller clubs, though, it's a different story. They can't just conjure up cash like the big hitters. But what keeps most teams in the Premier League afloat is that TV deal I mentioned. Just by showing up and playing, they get a massive influx of cash, and once you factor in tournament placements, they can cover a ton of overhead. Some even have money left over, though everyone's been spending like crazy lately.
Most new or potential owners are either businessmen or giant corporations, and their whole vibe is making money—pure profit. When they buy a club, they need a solid plan to generate returns, which is actually good for the club in the long run. They’ll keep reinvesting to drive up profits, which should theoretically level up the team's performance (assuming they hire a decent manager, buy the right players, and the owners stay out of the technical side). Right now, Manchester United is actually a decent example of this; the owners provide as much as they can, and so far, they aren't micromanaging everything like they did during the Alex Ferguson era. Even when things got rocky, they had patience and didn't complain. I just hope it stays that way, fingers crossed.
The real trouble starts when a profit-driven owner buys a club and realizes they aren't actually making any money. They might just bail, leaving the club in a much worse spot than when they found it, making it a nightmare to recover. On the flip side, you have these tycoons who don't care about the money. That's great for clubs that struggle to turn a profit, but the problem is they can get bored easily. Once they're done, they walk away, leaving the club in even deeper trouble. Sure, there's the option to sell off players to recoup funds, but the owner would probably just pocket the cash and vanish.
Ugh, enough from me. I feel like I'm just stating the obvious here. 😁 😁
I don't see anyone in the US actually giving a damn about his background. Sure, maybe some newspapers stir the pot or the BHF puts out a statement, but that stuff usually gets twisted anyway. Generally speaking, the crowd wasn't against him at all. Personally, I was all for it. I didn't want Lothar, I don't think he's that great, and I'm not exactly a huge fan of Meho Kodro either, but hey, maybe it works out like how things went with Slaven Bilic over there.
BTW, I'm Muslim, yet I was still rooting for an American when they announced those three names left.
mistycyclist51 said:Yeah, obviously, he tested positive while he was at Lazio... what's the big deal? 🤷 I didn't mess up my facts, because I said Jaap Stam didn't have any issues with doping during his time at Manchester United... unlike Rio, who basically ate everything in sight..
From what I heard, he took the test, but it was a few hours late, so I doubt he was actually on anything.
Eric Freeman put up 23 goals total, but let's break it down: he only bagged 12 in the league, plus 7 in the UEFA Cup, and 4 in the cups (3 in the FA and one in the CC)!!
Look, it’d be a lot easier if they just motivated their own guys to actually win their matches. Besides, Real Madrid could always find ways to give their players an extra nudge too.
Englishmen are clearly getting desperate about penalty kicks, so now they want to force teams to practice them just so the national team actually stands a chance at forcing a shootout for once.🙂🙂
So, the European Super League is basically a done deal at this point. You want to know why the G14 holds so much leverage over UEFA? It’s simple: UEFA is terrified. They think they can just ban these players from playing in the World Cup or the Euros to shut them down? Please. Who’s actually going to tune in to those tournaments if these massive clubs decide to flip the script and build their own leagues? These teams are too big to be controlled.
Personally, I hope it doesn't happen because it would be total chaos. First off, the spending would go off the rails. Clubs would realize they could burn through cash and just recoup it all via massive TV deals and sponsors—just look at what Uli Hoeneß was talking about. And beyond the money, the soul of the game would die. If you have five "mega-derbies" every single weekend, the magic disappears. When everything is special, nothing is.
Jamie Fowler2 said:Everyone thinks you're just trolling, so nobody's dropping links.
Just check YouTube.
YouTube won't cut it. I need something with actual images, or better yet, something I can burn to a disc!! A buddy asked for it—wants to take a look—so seriously, if anyone could help me out, I’d appreciate it. Thanks!!