A glance at this morning’s newspapers reveals the disturbing truth behind the ownership of Manchester United.
News has emerged of the Glazer family’s desperate attempts to raise cash and sooth the club’s swelling debts, owed to various financial institutions.
Since purchasing the club back in 2005, largely off the back of money borrowed from banks, the Glazers have seen debts rise to over £700 million as interest on the repayments soar.
And now drastic action is being taken by the club’s American owners as they attempt to raise sufficient capital and in turn reduce interest payments.
This action has come in the form of a ‘bond issue,’ an in depth prospectus that seeks investors to purchase bonds in the club and in turn receive a return on their investment over a period of time.
The Glazer family are hopeful the scheme will attract enough investment to pay off a large chunk of the United’s debt and provide them with a longer time frame to pay off investors.
But of greater concern to supporters will be the small print of the 322- page ‘bond issue’ that boasts of the potential sale of Old Trafford and the club’s Carrington training complex, a move that would be sure to spark widespread condemnation.
The revelation that the club will also continue to ‘maximise ticket revenue’ as a result of success on the pitch is yet further confirmation that fans will continue to pay through the nose to watch football at the home of the Premier League champions.
There is also the admittance of a ‘high degree of risk’ for investors, not least if United were to fail to qualify for the Champion’s League or make strong progress in all other competitions.
Such failings could result in falling attendances and a reduction in revenue, which the prospectus acknowledges could ‘adversely affect our financial health.’
The financial repercussions of the debt loaded onto the club could prove terminal and fans are surely beginning to question the lack of spending since the £80 million sale of Cristiano Ronaldo to Real Madrid last summer.
The official line from Sir Alex Ferguson was that the market was over inflated and didn’t represent value for money and so United instead opted for the economy purchases of Michael Owen and Luis Antonio Valencia.
But, this assertion is somewhat contradicted by the bond issue itself, which clearly states that the Glazer family plan to transfer £70 million from the club’s accounts into one of the Glazer’s holding companies and pay off another chunk of debt.
Indeed with such vast sums of money being sucked out of the club it is surely unlikely that Ferguson has £80 million at his disposal to buy the marquee name of which United are bereft.
Of course the summer months will be a true indicator of just how tight the noose has been tightened around Ferguson’s transfer spending as United plunge deeper and deeper into the wilderness of debt.
