It hasn’t been a great week for the reputation of US-based football club owners. First Liverpool director Tom Hicks Jr was forced to resign after losing his rag with a supporter, and now Manchester United’s latest financial figures have reminded horrified fans at the other end of the East Lancs exactly why they were so opposed to the Glazer family’s takeover back in 2005. The Americans have loaded over £700m of debt onto the club, while taking out over £20m for themselves in fees and loans. And if it wasn’t for the sale of star player Cristiano Ronaldo, the club would have ended last year deep in the red...
The figures emerged as the Glazers launched a £500m bond issue, which will be used to pay off the club’s bank loans – they won’t see a big reduction in interest payments (which last year totalled over £40m), but it will lock in the rate for seven years. In their attempts to flog the bond, the Glazers will be quick to point out that United enjoyed record turnover of £278.6m last year, with match-day, media and commercial revenues all rising. They’re still enjoying success on the pitch, and have a dedicated fanbase that stretches from Stockport to Shanghai.
But that's only half the story. The Glazers have now loaded over £700m of debt onto the club, around £200m of which is apparently via payment-in-kind loans, which carry an eye-watering interest rate of over 14% (and since the interest rolls over, the Times reckons this debt could almost triple to £588m by 2017). Profits were a healthy-sounding £48m – but that included the £80m from the Ronaldo sale, without which the club would have made a sizeable loss. And to add insult to injury, it also seems that the Glazers have taken out £12.9m in ‘management and administration fees’ to their ‘affiliates’, plus another £10m in personal loans. Without a word of explanation.
Unsurprisingly, the fans are appalled – not least because they’re the ones who are effectively funding all this through higher ticket prices (which have trebled since 2005), TV subscriptions, shirt sales and so on. The team’s recent success has helped the Glazers avoid scrutiny. But supporters are getting increasingly irate, particularly after manager Sir Alex Ferguson failed to spend most of that £80m (though he insists that was his choice). If United’s form falls away - like that of the Tampa Bay Buccaneers, Glazer's US gridiron team, who won the Superbowl in 2002 but finished bottom of their division this year - the rumblings of complaint could become a roar.
Football is a tricky business. Supporters are incredibly loyal to their club, which appeals to the money men. But they’re also incredibly activist if they think the owners are treating them with contempt and using the club like a cash cow – as the Glazers seemingly are (it’s hard to argue their ownership has done United any good). We haven’t heard the last of this story.
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