Sunday, May 27, 2007

Glazers selling Manchester United? I hope so

The Glazer family has almost daily rejected rumors of an imminent sale of Manchester United but they still persist. I ignored the story because it didn't seem logical –they bought the club only 3 years ago, but the rumor won't die and evidence is starting to mount that it may be true. Fingers crossed it is.

What evidence? Well, weak evidence at best, but the most compelling fact that has me thinking it’s true is that the Glazers refinanced the debt with JP Morgan. New TV, sponsorship, and higher ticket prices (14% last season) have significantly increased revenue but not to the point that the debt can be serviced and a profit reached. I told you: United fans will be paying the interest on the Glazers loans. Combine all this with a possibility of a bad season that could lose them much needed Champions League revenues and you have a situation which could result in the club making a large scale loss. How far United has come.

The rumor has also gained strength as a number of papers have reported that financial sources in Manchester have confirmed that feelers have gone out from Old Trafford because the takeover was proving so costly.

A look at the numbers makes the story more compelling: Glazer borrowed 560m pounds, restructured the debt at a cost of 90m pounds, they now owe in the region of 660m pounds and have payments of over 60m pounds annually. 60m pounds of turnover going JUST to pay off a loan. That debt burden is wiping out all the profit and the burden is proving more and more untenable as the costs continue to increase along with transfer kitty demands from the bench.

This should be a lesson: you don’t but football clubs to milk a cash cow.



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Anonymous Anonymous said...

god i would love to go back to how the owdership was before

5/27/2007 4:50 PM  
Anonymous Anonymous said...

If this buyout is true then won't the Glazers be making a profit on their original investment?

5/28/2007 1:55 PM  

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