Cash crisis at Manchester United: Glazer debts soar to over £700m

21 January 2010 01:54
Manchester United's grim week got even worse on Wednesday when annual accounts revealed that the club's parent company has overall debt which has swollen to £716.5million.

Tuesday's 2-1 Carling Cup defeat by neighbours Manchester City at Eastlands was notable for the significant number of banners on display expressing opposition to United's controversial owners, the Glazer family.

Similar protests were attempted at Old Trafford during last Saturday's game against Burnley only for many of the supporters involved to be ejected shortly after kick-off.

Battle of Manchester: United were beaten 2-1 by City at Eastlands

Feelings will still be running high against Hull this weekend,though, after news yesterday that the company Red Football JointVenture Ltd, who are owned by the Glazer family, now have debts of morethan £700m for the first time.

Accounts filed yesterday for the year ending June 30 2009 showed thecompany's overall debt to have increased by £17m from £699m. Thebiggest rise has come in the payment in kind loans, which typicallyhave a higher interest rate. They show a £27m increase to £202m.

Malcolm Glazer: Facing protests from United fans

Bank loans, meanwhile, have dropped by £9m to £509m. The overalldebt figure, not contained in the prospectus for a £500m bond issuereleased last week, illustrate why the Glazers are so keen to raisecash through bonds to reduce the interest on the debt.

Shockingly, Red Football Joint Venture paid out £68.5m in intereston their debts in 2009 but, unlike the previous year, returned anoverall profit of £6.4m in 2009. In 2008, they returned a £47m loss.

The profit can almost entirely be explained by the sale of CristianoRonaldo to Real Madrid in the summer for £80m and it is this fact thathas led some fans to fear that more players will have to be sold thissummer to keep the club's balance sheet looking healthy on the surface.

Red Football Joint Venture's accounts record an £80.7m profit on 'disposal of players' compared to a £21m profit in 2008.

A spokesman for the Glazer family last night insisted that the debt did not have a bearing on the operation of the club.

He said: 'The club have a £50m surplus to work with once the interest payments have been made.'

Manchester United's accounts also show their chief executive DavidGill was paid £1.8m last year. This will interest many fans who feelGill should have stepped down once the Glazers saddled the club withdebt when they bought it in 2005.

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Source: Daily_Mail