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Leeching Leeching Glazers: Man Utd’s Finances Explained

The Glazers are looking to list Manchester United on the New York stock exchange, in the hope of raising £64 million from selling shares in the club.

The Glazers are in desperate need of paying off some of the club’s £423 million debt.

Manchester United’s Finances Explained

Initial Takeover and pre-refinancing:

The Glazers financed their £800 million purchase of the club primarily by securing loans against the club’s assets. In effect, the owners were only able to afford to buy United by taking a loan, and loading it onto the club itself (a bizarre concept that the Premier League let stand; doesn’t that mean any one of us could do the same thing? I’ve always fancied owning Real Madrid).

The loans that they took out to buy the club were roughly £660 million against the club’s assets, and roughly £207 million in PIK loans (more on this later).

The £660 million incurred £62 million annual repayments, which come straight out of United’s coffers. The fury amongst supporters is pretty understandable, considering this repayment is being made on a loan taken against their own worth; a debt free, super-rich football club was instantly transformed into a club with crippling debt, simply so that the Glazer’s could find money for their initial purchase.

The £207 million PIK loans are slightly different. Manchester United are not liable for them, but indirectly they are, since the loans are in the name of Red Football Joint Venture Ltd, who in turn secured them against the company’s shares in, you guessed it, the club.

Although there was no immediate worry over the £660 million (except for the repayments), the PIKs needed to be repayed in full by 2017, which was achieved in 2010.

Refinancing the debt:

In 2010, the debt was refinanced via a bond issue (essentially an I.O.U contract, and a different type of loan) worth approximately £500 million. Essentially, this meant the club had raised £500 million out of nowhere, which they used to pay off almost all of their debt to international banks (as far as I can work out, this means they took out a second, different loan, and used it to pay off the first one, thus giving them a new debt with different terms and conditions).

The annual interest on the bond is £45 million per year, reducing the overall interest payments United are liable for. Crucially, this bond issue allowed the Glazers to start stripping the clubs assets, and using the club’s income to repay their own loan, and help repay the PIK loans they so desperately need to wipe out.

Filling Their Pockets:

The debt restructuring now allowed them to: carve out £95 million from the club’s finances; sell and lease back the training ground; take 50% of the club’s profit each year, and use it pay off the debts. That’s right – if they need to, the Glazers can take half of United’s yearly earnings, and use it to pay off their debts.


I could spend time giving yet more facts and figures about how profits have been taken out of the club to repay bankers, or how they intend to pay back their loans. But the facts are relatively simple:

-ticket prices have almost doubled

mysterious £10 million payments have been personally borrowed by Glazer family members, despite claims owners are not taking wages

-millions have been taken out each year to pay off interest rates

-since 2010, million have been taken out to start repaying the initial loans

To summarise, the Glazers have taken £500 million out of the club in their first seven years as owners.

£500 milion, gone. Not from the Glazers pockets, but from United’s. Having raised the money to buy the club via a loan, that the club itself is paying back, acquiring the world’s richest club hasn’t cost the owners anything.

The move to put United on the New York stock exchange has been met with a positive response from fans, as it is likely to reduce the £423.3 million debt by £66 million.  For the time being, the Glazers will continue to suck money out the club, using their profits to pay off loans. £500 million taken so far, and at least another £600 million to come in loan and interest repayments.

Anything to reduce this loan must be seen as a positive.

I am not a United fan, and your opinions towards the Red Devils should not affect your judgement on this ownership. It has added nothing to football, and has taken hundreds of millions of pounds out of the industry. Ownerships such as this one should not be allowed to stand.

*article ammended 06/07/12 – PIK loans paid off in 2010 (thanks to John)

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Article title: Leeching Leeching Glazers: Man Utd’s Finances Explained

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