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United set for record operating profit
Published : 08 Oct 2010 07:46:00
Manchester United could become the first English club to break the £100million barrier when they announce their operating profit on Friday. The Glazer family, United's controversial owners, have instigated a revolutionary 'territory specific' approach to their commercial deals. It means they have individual telecommunications partnerships in different parts of the world, the latest in Hong Kong, with PCCW. By adopting this stance, under the guidance of commercial director Richard Arnold, United have been able to make greater use of their instantly recognisable name and the club's enduring popularity across the planet. The commercial sector is virtually certain to be part of the reason for the massive profit figure, given corporate ticket sales were said to have fallen last season, a trend that has continued this term as the recession has an impact. Yet the good news at the headline figure is bound to be overshadowed by the detail, which is thought to confirm an overall £60million loss. There could be various reasons for this figure being reached, including the depreciation in value of Sir Alex Ferguson's first-team squad. However, it emphasises the huge sums leaking out of Old Trafford as a result of the Glazer takeover in 2005, to which many fans are still vehemently opposed. A hefty one-off cost was incurred following what turned out to be a successful £500million bond issue earlier this year, but fans will be interested to discover whether the Glazer family withdrew cash themselves, as the bond prospectus indicated was a possibility, to pay off part of the £200million-worth of PIK notes, which are attracting interest at an eye-watering 16.25%. It was thought a takeover bid would be launched last summer by the Red Knights group, who are keen to get rid of the Glazer family. However, with the Americans unwilling to do business - a price of £1.5billion was rumoured at one stage - the Red Knights backed off, believing paying such a large sum did not represent a realistic market value and would just create even more problems.