A new investigation into the financial situation of the businesses owned by the Glazer family who own Manchester United has revealed that the American tycoon’s are in debt to the tune of around £1.1bn.
A sizable proportion of the debt has amassed from a company named First Allied Corporation which rents shopping malls in the US, many of which have now fallen insolvent because of ‘low occupancy’. In addition, with falling commercial property values, banks have placed 28 of the 64 shopping malls on a watch list as they struggle to pay off loans. The properties are now apparently worth within the region of £380m but with the mortgages valued at £395m the shopping mall company’s value is pretty minimal.
To compound the troubles of their shopping mall business, the group’s portfolio has 30 mortgages with interest only periods that end this year.
Though the debts of the First Allied Corporation are not financially linked with Manchester United, the findings of BBC’s Panorama programme will serve as a further blow to fans hopes for the future of the club.
Barely a week has passed since a coalition of wealthy Manchester United fans and donators, publicly known as ‘the Red Knights’, were forced to temporarily shelve their bid to buy the club after the Glazers indicated that the club would cost no less than £1.5bn.
So far, the green and gold campaign has had only a limited effect on the club but it has shaken United’s image enough to draw-out a usually publicity shy David Gill into a newspaper interview last week.
Meanwhile, the Manchester United Supporters Trust (MUST) has implored fans to delay the renewal of season tickets while the Glazer regime is still in power; a doctrine that will be hard to stick to even for the most outspoken critics of the Americans.
The new revelations mean that Manchester United will certainly have no outside deposits made into the club from the family that bought them in 2005. In fact, with £22.9m already having been drawn out of the club by the Glazers in the shape of ‘consultancy fees’, Manchester United look likely to lose more money to their owners over the coming years as the Americans try to refinance their failing financial undertakings.
Despite the furor, Manchester United itself still has a working financial model; the club posted earnings of £287m last year.
But the club’s survival is now entirely dependent on two factors: the owners and the temperament, lifestyle, and financial greed therein; and the success of the team on the field. Should either falter, there could be serious, existential consequences for one of the world’s most famous clubs.
Panorama: Man United – Into the Red, BBC One, Tuesday, 8 June, 22:35.
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