Red Football Ventures loses rather a large amount of money. « Untold Arsenal: Arsenal News. Supporting the Lord Wenger; coach of the decade
Red Football Ventures loses rather a large amount of money.
By Tony Attwood
Man U’s parent company Red Football has delivered a record pre-tax deficit for the year ended 30 June. Last year it made a £21m profit largely due to the sale of Cristiano Ronaldo to Real Madrid for £80m.
This year the company suffered the £64.7m cost related to the setting up of a bond scheme to replace bank loans and the £30.2m in interest accrued on £220m Payment in Kind (PIK) loans.
The PIK loans were paid in-full by the Glazers in November though no one knows where on earth the money came from, given that virtually all Glazer business ventures are in financial trouble. The best guess is that other loans were refinanced to pay the PIKs. It is the typical Peter and Paul game that businesses in trouble pay.
The loss posted by Red Football Ventures is better than the £80m deficit of the club’s immediate holding company, Red Football Limited for the same period. The difference can only be because of the additional PIK loan interest accrued.
There are of course companies that still like to be associated with this sort of mess – and the endless anti-Glazer protest. Aon, Nike, Turkish Airlines and Telekom Malaysia all are pouring sponsorship money into Man U.
As a result overall revenue is up from £144.7m to £156.5m, a year-on-year growth of 8.2%. So the club is earning more to service the Glazer debt. The total borrowings at June 2010 stood at £522m, up from the 2009 figure of £514m.Following the announcement of the £80m loss in the autumn David Gill, the chief executive, said “We have £165m in the bank but in some ways we would prefer to have £80m in the bank and Ronaldo on the pitch.”
Yes, but I rather have the feeling that the people who have loaned money to the club (those bankers and the like) have insisted that the club keeps £160m in cash, just in case the whole thing tumbles over…