Man Utd’s huge debts a major worry for fans

By Rhys Hayward
5:33pm UK, Tuesday January 12, 2010

By Rhys Hayward, 5:33pm UK, Tuesday January 12, 2010

The Red Devils generated £80m from the sale of Ronaldo (Photo: Gordon Flood)

Plans unveiled on Monday for Manchester United to raise £500m through a bond scheme will have done little to ease the concerns of fans at the Glazers’ running of the club.

The announcement came as the club announced pre-tax profits of £48 million for 2009 but left many sceptics claiming that the plan was simply redistributing the already gargantuan levels of debt.

The profit figure includes the world record sale of Cristiano Ronaldo for £80m and without it, the club’s loss would have been registered at £31m — £10.4m more than last year’s figure.

Of even more concern to fans should be the money paid in interest on the loans secured by the Glazer family to purchase the club in 2005 which amounted to £41.9m. Since the takeover, around £325m has been paid to service the interest on the loans, leaving the club severely financially disabled.

The figures are staggering, particularly as the club won the Premier League, League Cup, World Club Cup and were runners up in the Champions League last season, and with the side currently struggling to stay within touching distance of Chelsea in the title race and already out of the FA Cup, things are beginning to escalate.

Of course, Sir Alex Ferguson has weathered this kind of on field wobble before and you would not put it past him to rebuild an equally successful side, but to do so takes time and money; increasingly precious virtues in football.

Sir Alex has repeatedly stressed that there is money available for him to spend but the free transfer signing of Michael Owen spoke volumes of increasing austerity at United.

Tickets for Old Trafford, once almost unattainable are now relatively easy to come by and the waiting list for season tickets is a thing of the past.

The Club has sought to drain every possible pound from loyal supporters with a succession of season ticket increases but faced with the prospect of a rare trophy-less season and Britain’s own age of austerity, another rise next season could push many over the edge.

United are still a long way off becoming this decade’s Leeds United but the future looks far from certain. Ferguson will have to retire at some point and for whoever takes over, the transition period will be extremely tricky, particularly if funds aren’t forthcoming.

And with clubs like Manchester City prepared to underwrite large scale losses in order to achieve success, the future for the side who seemed to embody the colossal, leviathan nature of the Premier League appears riddled by debt, doubt and an all too real risk of decline.

HAVE YOUR SAY - 7 Comments

Thomas Crean on January 13th, 2010 at 8:26am

I agree completely Rhys, I am sick to the teeth of fans being fleeced by these foreign owners who have only a slight interest in how well the team performs on the field. The Glazers aren’t football diehards but businessmen; their only concern is how well the team performs on the balance sheet. It is an utter disgrace that they were allowed to borrow to fund their acquisition by terms of a 9-figure loan.

I would also blame the economic environment for the drop in demand for tickets. A huge mistake to expand the stadium if visitors begin to fall below the full capacity mark in the long term.
Rhys on January 13th, 2010 at 10:38am

Yeah, the ticketing situation is a funny one. Yes, the recession hasnt helped but the truth is they could expand the stadium to over 100,000 and sell it out most weeks if the price of a ticket was reasonable. The general sale tickets are usually snapped up when available but it’s the number of season ticket holders who are giving them up which should be most concerning but of course they’re not interested!
As you say, as long as they are performing on the balance sheet…
Paul on January 13th, 2010 at 5:40pm

“many sceptics claiming that the plan was simply redistributing the already gargantuan levels of debt.”

Which is exactly what they’ve been doing, desperately so, since the day they took over – the ground expansion that began 2 months after their takeover initially had cash set aside for it, until they plundered that and put that expansion on credit too.
HeComesFromSerbia on January 15th, 2010 at 9:50am

My dad is a UTD season-ticket holder. we’ve seen year-on-year increases time and time again. its so simple and easy to see; more and more people are jus not going to renew their season tkts. i agree with you rhys, UTD probably could sell-out to capacity EVERY week- they just need to make it more affordable.

I envy Arsenal for their business model. ie let the fans have a say and some of them still have the luxury of being shareholders in their club. (although even they could eventually be taken over….Kroenke? Usmanov? Fiszman?)

Football has been poisoned by businessmen. Is there a way back to the ‘good old days’?

“Our lives begin to end the day we become silent about things that matter.” Martin Luther King
Rhys on January 17th, 2010 at 3:40pm

Thanks for the comments. I think you’re right about arsenal, it would be a shame for them to lose that individuality.
Tommy Crean on January 18th, 2010 at 2:10pm

As an Arsenal fan I hope we don’t get taken over. We don’t want you Stan.
Manchester Utd debt — Our bond is our word? « Sports Fans Bloggers on January 18th, 2010 at 8:47pm

[...] Man Utd’s huge debts a major worry for fans [...]

Important: Any comments which contain foul language, or which are of an aggressive or abusive nature will be moderated or removed. Opinions expressed in comments on this website are those of the individual and do not represent the views of thesportreview.com.