Cristiano Ronaldo transfer: 160m for Manchester United is music to Glazers' ears
On the plus side, it represents the club's second world-record £80 million deal this month, coming just a week after insurance company Aon secured a four-year shirt sponsorship deal for the same fee. A less palatable fact is that the £67.76m profit Manchester United will earn on Ronaldo, signed for just £12.24m in 2003, is not quite sufficient to cover the £68.8m interest they paid on United's debts last season. Therein lies the tension at the heart of Old Trafford under the Glazers. Driven by the Americans' commercial demands, Manchester United have become a money-making machine unparalleled in British sport, able to strike deals that their rivals can only dream of matching. The flip side is that they have to. If the owners are to stand a chance of servicing the £699m of debts incurred buying and maintaining ownership, they have to keep breaking records. Around 70 per cent of the debt is secured directly against the club, with the rest made up of "payment-in-kind" loans secured by the owners, accruing interest at 12.5 per cent, which is rolled up and added to the total. Last year that meant the debt grew by £8m even though the Glazers diverted £68.8m of United's record £256m turnover to cover interest. So while the football club posted an operating profit of £66m, the ultimate holding company lost £45m. The Glazer's highly-leveraged model means United have to run to stand still, a feat they have managed in recent seasons thanks to on-field success and a commercial department able to exploit highly marketable talent such as Ronaldo. To that end, the combined income from the Aon and Ronaldo deals, worth £40m a year over the life of the two four-year contracts, will come in very useful. The concern for fans is that the money generated by Ronaldo's transfer will be soaked up by the need to service debt or diverted to other areas of the business. "We are calling on the owners to make a statement of intent that all incoming transfer funds will be made available to Sir Alex Ferguson to strengthen the squad," said Duncan Drasdo, chief executive of the Manchester United Supporters' Trust. "There will be a spotlight shining on transfer activity this summer to ensure the manager is given the resources he requires and that the money stays in the club." A private concern inside the club might also be that Ronaldo's departure might make commercial deals like the Aon sponsorship harder to pull off. Ronaldo has become the most marketable player in the game, and the relationship has suited key sponsors such as Nike, who produce United's kit and the player's boots. Last month United chief executive David Gill praised Ronaldo's professionalism and help with the club's commercial commitments, and his importance was evident to anyone visiting the club website on Thursday. Adverts for United's pre-season tour of Asia featured Ronaldo but he will not now take part. United fans will have to find a new idol, with many hoping that the Glazers will grant Ferguson the resources to buy one.
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