Dave Randles: Liverpool FC v Manchester United preview

Published: 19 Mar 2010 - 11:00:00

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IT doesn't seem too long ago when Liverpool supporters were poking fun at Manchester United for falling into the hands of the Glazer family. 'USA, USA, USA,' came the chants from the Kop, livening up an otherwise tepid goalless draw at Anfield in September 2005. Less than two years later and the Stars and Stripes were being flown at the other end of the East Lancs Road. Suddenly the joke was on Liverpool as well whose fans, like United's, have come to realise that the changing of the guard has been no laughing matter. Whisper it near Old Trafford on Sunday, but the fierce rivals have got a lot more in common than they might like to admit. One estimate sets the overall debt in English football at £2.8bn of which half is accounted for in the north west. Of that figure around £1bn has been incurred by just two clubs; Manchester United and Liverpool. Liverpool's £237m debt - down from around £350m - may be substantially less than the £750m loaded on to United by the Glazers but, according to football finance expert, Dr Rory Miller, it is the Reds who are in the more precarious position. "There are similarities between the two clubs in the sense that they have both had leveraged purchases where the owners are heavily indebted to various financial institutions," says Dr Miller, who lectures on the University of Liverpool's Football Industries MBA. "But the way the debt is structured is rather different in both cases. "In Liverpool's case, the liabilities are short term. Hicks and Gillett have either got to find some new equity investment or else refinance by the July deadline. The Glazers haven't got that immediate necessity to refinance. They already did that in January with the issue of a bonds scheme "The clubs have both got highly leveraged purchases but in terms of being critical and imminent, Liverpool's problems are much worse than United's." News of the bonds scheme, from which the Glazers hope to raise £500m, has prompted new protests from United fans who have taken to wearing the yellow and green of founder club Newton Heath as a demonstration against the new regime. Their frustration is palpable. Despite having the highest turnover of English clubs, United were only able to announce a profit over the last financial year due to the world record sale of Cristiano Ronaldo to Real Madrid for £80m. The plans of a collection of wealthy United fans, the Red Knights, to raise £1bn to buy out the Glazers have received a warmer welcome in Manchester than news of the Rhone Group's protracted £110m investment for a 40% controlling stake in Liverpool has on Merseyside. However, where the bad news for United fans is that the Glazers have shown no signs of going anywhere, the Liverpool supporters union, Spirit of Shankly, are suspicious of the motives of a private equity firm that makes a living out of medium term capital gains. In other words, they probably won't be sticking around for too long. While the interest payments on United's loans are upwards of £40m a year, Liverpool have been paying the Royal Bank of Scotland and American bank Wachovia over £30m a season. Fans at both clubs have voiced their concerns about the impact debt servicing is having on squad strengthening.