Manchester United debt now tops 700 million pounds

By AFP, 21 Jan 2010 AFP is a Roar Pro

Tagged:: EPL, football, Manchester United, World Football

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Manchester United’s parent company’s debts have topped STG700 million ($A1.24 billion), accounts filed on Wednesday have revealed.

Red Football Joint Venture Ltd, the company owned by United’s American owners the Glazer family, had total debts of STG716.5 million ($A1.27 billion) at the end of June 2009, up from STG699 million ($A1.24 billion) pounds a year earlier.

The figures will intensify mounting concern among the club’s supporters that the cost of servicing United’s debt is acting as a brake on investment in players.

Almost one third of the debt is in the form of ‘payment in kind’ loans from hedge funds which have to be repaid at a 14.25 per cent rate of interest.

The amount of Red Football’s debt in this form increased from STG175 million ($A310 million) to STG202 million ($A358 million) in the 12 months to June 2009 and accounted for a substantial proportion of the STG68.5 million ($A122 million) pounds the company paid in interest over the year.

The sale of Cristiano Ronaldo to Real Madrid for STG80 million ($A142 million) ensured that the company was in profit, but only to the tune of STG6.4 million ($A11.33 million), compared with a loss of STG47 million ($A83.2 million) in 2008.

The Glazers last week unveiled plans to restructure the company’s debts by issuing a STG500 million ($A885 million) bond.

If fully subscribed, the bond should enable the parent company to reduce the cost of financing its debt but it seems inevitable that the heavy debt burden will continue to weigh heavily on United for years to come.

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The Crowd Says (4) | Page 1 of Comments

Towser said | January 21st 2010 @ 8:52am | Report comment

Forget these International blow ins,The Owls local pie partner is looking good:-

http://www.swfc.co.uk/page/News/0,,10304~1732741,00.html

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- Daniel King said | January 21st 2010 @ 10:44am | Report comment
  
  Hang on! A pie at the football, i thought you Aussies had the rights to that and nobody else had even considered the idea!
  
  Reply
TheMagnificent11 said | January 21st 2010 @ 9:13am | Report comment

As long as Man Utd make it to the latter stages of the champions league (semi finals), they should have enough funds to make the interest payments on their loans. This is a fine line because it only takes one bad season and the club could be in crisis. It could be Leeds Utd all over (this is the case with most EPL clubs with Arsenal being the only big club handling finances responsibly). They’ll be forced to sell their biggest assets (star players, training facilities and naming rights to Old Trafford). The difference between Man Utd and Leeds is that other billionaires are likely to purchase Man Utd from the Glazers. If the Glazers were really interested in owning Man Utd long term, they’d sell the Tampa Bay Buccaneers and their other American sporting team to cut their debt levels. As a Man Utd fan, the only consolation I have is that Liverpool appear to be in a worse situation with their American owners.

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MV Dave said | January 31st 2010 @ 8:54pm | Report comment

From the online Times today;
ManU “was valued last year by Forbes at £1.3bn. To restructure United’s debt, the Glazers have just completed a £500m bond issue, which was over-subscribed twice over, showing the financial markets retain confidence in United.

A club statement issued yesterday read: “Manchester United is the most profitable football club in the world. Last year, on a record turnover of £278m, the club made a record cash profit of £91m. Interest payments were £41m and wages accounted for less than half of the turnover. The recent bond issue has been very successful and provides the club with certainty in its interest payments.” It added that money from Cristiano Ronaldo’s sale is available for players “who the manager thinks can improve the squad, not to prove to pundits that it exists”.
There is now talk of a group of wealthy supporters putting together an offer to buy the club…lets hope the club can return to owners who have some level of care about the club. BTW Rooney. the ‘White Pele’, not to be sold at any price

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