Tuesday, 8 June 2010

Is Malcolm Glazer a better boss than Tom DeLay?

Edit: 8th June 2010.  If you think I'm being harsh, check out these two comments on this statement from NFL commentators including one of the main sports writers on the Tampa local paper, The St Petersburg Times:

St Petersburg Times
Adam Schein

I couldn't help but laugh at the swift statement issued by the Tampa Bay Buccaneers spokesman Jonathan Grella today. The man used to be press spokesman for disgraced House Speaker Tom DeLay. Plus ca change.....

This is what he said:

"Buccaneers fans should know that the Glazer family is as financially well-positioned as ever before.

"Companies they own generate revenues in excess of $800 million each year.

"Sophisticated real estate experts know that the family's refinancing of their commercial real estate before the global meltdown has proven to be the wise move.

"While First Allied represents only a small portion of their asset portfolio, it continues to generate significant profits, enjoys over 90-percent occupancy, and has long term non-recourse financing.

"This franchise remains committed to bringing the resources to build its next championship team.''

Let's do the paragraphs one by one.
1. On my calculations, the three companies generated revenue of c. $780m (it depends on the exchange rate you use for United), so no missing gems. As someone once said, “Turnover is vanity, profit is sanity, cash flow is king”. Revenues are not profits and First Allied proves it. Old friend of United, AIG, had revenues of $96bn the year it went bust. Anyway, it's interesting that he chose to quote a revenue figure.

2. As these details have never been published before, we must wonder who these "sophisticated real estate experts" are. Maybe the commercial property lending department of Lehmans? Anyway, how wise is it to remortgage in 2005, 2006 and even worse in 2007? Of the 35 remortgaged properties, nine already can't cover their "wise" loans and eleven more will join them when interest free periods end. 

3. I have looked at every shopping centre they own (bar one that had 2008 cash flow of $0.5m) and "significant profit" is not possible. The $9.7m I have quoted is cash flow before income taxes (be they personal to the Glazers or corporate taxes) and before any head office costs (First Allied operates out of three offices and employs such cheap staff as Edward Glazer). The cash flow will fall to just over $7m per annum as interest only periods end, if occupancy rates don't pick up.

The 90% occupancy doesn't tally with actual data. On their website, First Allied like to include buildings they don't actually own, but are on the site. You can see a "142,438 sq ft" centre here (including Walmart). The 90,000 sq ft Walmart isn't owned by First Allied (I checked the county records), so occupancy is 88.3% not 96.5%.

I calculate occupancy to be 86%, but frankly it doesn't matter. The centres in trouble (DSCR below 1x) have occupancy that averages 79%, the one with DSCR above 1x average 94%.

Non-recourse just means that the bancruptcy of a centre doesn't knock on to other companies.  Brilliant.

4. Does being "committed to bringing the resources" actually mean anything?  If you've got resources, why not bring them?



simpson said...

i m sick of the glazers
i m sick of RedKnight Fail to make a
1Billion pound bid.

Love United Hate Glazer

United Rant said...

Tom DeLay and the Glazers - a match made in heaven. All they need now is to bring Bernie Madoff into the equation... oh.

Jörgen said...

Oh, a little bit of guilt by association does wonders for objectivity...

If a few of the centres in trouble go bust, won't that mean that the surplus cash flow will increase and thereby "save" the others? It is quite clear, even in your analysis, that quite a few centres are fairly profitable.

You can do better than this!


andersred said...


It was a joke!

You're wrong about the surplus cash flow increasing. Each centre is in a separate non-recourse limited partnership. Ones with negative cash flow don't suck money out of ones with positive cash flow (although the Glazers could but don't put cash into them).

The $9.7m figures ascribes cashflow of zero to the negative ones. If they go bust the big number doesn't change.

Hope that makes sense.


RobC said...

Tom DeLay's Wikipedia page:


Nice man to have on your side...........


Jörgen said...

I know you want to make it count as a joke, but the effect is there still and it's not the first time nor the last, I suppose. It's a little tiresome, because it does seem like you try and spin some things. You claim it's "obvious" they have no cash, when it's far from obvious.

You claim it's stupid to have remortgaged in 2005-2007. Well, in 2008 rates were probably even higher and in 2009 few people would have touched them. Today, it's still difficult with capital markets still not functioning properly and the retail business being one of the hardest hit.

I would think that the numbers would speak for themselves, without having to resort to using rhetorics.

So yes, I do think you are a bit harsh on them. This is how the author of the article linked to as "Adam Schein" replies to a comment made by a reader it's from the same page):

"Joe is not disputing what the BBC is reporting, but Joe thinks the article could very much be slanted if not a hit piece. Surely the BBC has copies of documents Green provided. Joe’s biggest question is, what information did Green unearth through his research that he kept to himself so as not to damage his chances of forcing Team Glazer to sell the kickball team, which is an avowed goal of Green’s?

From what Joe can tell, it’s a one-source story (never a good thing) and the source is anything but objective. In other words, it borders on disgraceful. This isn’t much different than a piece of propaganda the Daily Kos or Sean Hannity would put out."

I haven't had the chance yet to look into your data enough, but from what I have seen there is a lot of subjectivity in it. I'm afraid most people won't be able to recognise it, though.

With so much of subjectivity in it and your research being the basis for tonight's edition of Panorama, I'm starting to think that there is more to you than meets the eye.

Are you actually doing this on your own, free time or are you being paid by any of the interested parties (like MUST, Red Knights or such)?

I enjoy the debate, but it would be easier to know where you are coming in this respect.


Jörgen said...

The "Joe" from the quote above is the author of the main article referring to himself in the third person. Not stylish, I know, but definitely American.

There should be a from in my last sentence above (after "coming" and before "in").

andersred said...


With respect, you are beginning to skate on some thin ice.

I don't care for the second hand posting of accusations from other sites. If you think "Joe" is so wise, suggest to him that he comes on here and makes those sort of statements. If you want to make such statements, be a man and make them yourself.

If you "haven't had the chance to look into your data enough" don't speculate what you may find, go and look. If you find errors I will, as I always promise, correct them.

Your insinuation, through "Joe" and directly, is that I am selectively publishing data. Somehow I am doing that despite publishing links to ALL the data, and despite the fact that the three primary data sources are a) CMBS trustee sites (links provided), b) SEC 4245B filings (links provided) and c) First Allied's website (I'll let you and "Joe" google that one).

As for your suggestion that I am in the pay of someone. Prove it, or provide one (just one) tiny shred of evidence for that slur.

You sit behind the comfortable anonymity of a Google account and make suggestions like that without ANY EVIDENCE WHATSOEVER. How ironic for someone who criticises me for partiality and selective evidence!

My name is in the public domain and I publish verifiable sources for everything I write.... Who the fuck are you Jörgen?


Jörgen said...

I published the quote as a joke, as you asked in the opening sentence if we consider you too harsh. I found it funny that the link you provided questioned your motives in such a way. As for my manhood, I have already questioned your impartiality on several occasions.

So in your own words, please lighten up.

I apologise if you were offended by that quote.

For the rest, I'm not speculating on what I might find. I know from looking at the data you've provided that it has been interpreted in a certain direction rather than another, i.e it's not impartial.

The reason I haven't had the time to dig deep enough is because I have a job and a family, which prevents me to do this at rate I would prefer. I want you to note that I'm not insinuating anything by this statement, it's just a fact.

I don't to just throw out questions anymore as I feel I'm wasting both your and my time. Better then, I go through your data more thoroughly.

About you getting paid: It was only a question and I asked it because when someone puts this amount of work in and it makes it to the Guardian and a documentary on national television, I'd be more surprised if you gave it away for free. It takes a lot of time to get this information and put it together, so why is that so strange? Again, if you feel offended by the question I apologise.

I'd gladly tell you more about myself. Clearly, I'm not in the public domain and, frankly, I don't know how I could be. I'd answer any of your questions, but I'm not sure you would find my answers very interesting.

Well, I expect to find more time by the end of the week, but by then all of this will have exploded into something uncontrollable, I suppose, as TV will always give a stronger impression.

Off to bed.


nick said...

Hi Andy,
Just watching panorama and it's pretty gimmicky, but will do a job. Someone more credible than whelan would have been good but...
No doubt all the headlines will be about glazers crashing and burning soon, which you know and I know is highly unlikely because they have £1.1bn or more of net assets, as you agree.
We also agree that leveraged debt is not good, that the glazers could clear the debt by selling the bucs, and that the biggest bone of contention is they're using income from their club to pay debt.
But do you also agree that if this documentary raises expectations the glazers are about to go bust, those are not realistic expectations?
As you so kindly say, you think I'm the last non protagonist (non-aligned), and I hope I continue to be so.
Isn't there a case for demonstration and campaigning based on the real situation, not an exaggerated version of it? (and I don't mean you, that £437m aside)?
Yours in total transparency,
Nick from sportingintelligence

Anonymous said...

jorgen you fucking glazers stooge cunt of a man you'll rot in hell with them soon or later

mark my words

Anders, son thank you for everything you have and are doing to expose these dispicable leeching cunts to a wider audience.

An Old Exiled Red

United Rant said...

Andy - I wouldn't get wound up by the Glazer apologists on here and other blogs such as my own.

Your analysis is sound, backed-up by the (legislatively) independent BBC and an excellent journalist in John Sweeney and another in David Conn.

Your sources are public domain and verifiable by anybody who cares to take the time.

Jorgen doesn't or I suspect can't offer evidence to contradict your findings. If he could, he would.

The rest is just hot air coming from those who have lived in a world of denial for the past five years.

As for the question of being paid. I've no idea but I know from experience the Guardian won't pay for anything unless it's actual copy (and even then it's a pittance) and the BBC don't, as a matter of principal, pay contributors to programmes such Panorama. So my educated guess is that you weren't paid a penny.

rooney the new king said...

Jörgen - get your head out of your ass the bond issue sums up what scum the glazers are, panarama was light on them way to light and it felt like a idiots guide.

how about they should have gone into better details on the PIK notes, like one said they got the truck loaded it into OT and taken the money out.

some PPL do not understand the severaty of the situation, FC's will only survive when the team is strong enough, and between 2007 and 2009 united had that team, but like all cycles it does not last forever and rebuilding is always needed. I said this before team maintanance is the only way to run a succesful FC. If its not? like leeds it will collapse under the weight of its debt, which will happen to united if the team investmant is not done in the the next 5 years unless loads of players come through the academy.

Anonymous said...

Well done Andy were behind your efforts please keep up the good work.

Love United hate Glazers.

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