Interest Rate Rise Increases Fans' Fears Over Glazer Debt At Manchester United

[interestrateripoff]

http://www.timesonline.co.uk/tol/sport/football/premier_league/manchester_united/article7130227.ece

Manchester United are facing a hefty interest rate of 16.25 per cent as of August after breaking financial rules governing their loan.

The 2 per cent rise will strengthen fears that the Glazer family, United’s unpopular owners, will try to pay off the high-interest loans rather than spend money on the team, a move that would infuriate supporters.

With the season over, it is almost certain that United will breach the financial rules set out in the Payment in Kind (PIK) loan taken on by the Glazers to fund their investment in the club. The rate hike means that United will owe an extra £75 million in interest on an already ruinous £138 million loan taken out in 2006. That total will have ballooned to £662.6 million by the maturity date of 2017.

If, as the club hope, they can move back within their financial covenants quickly, the PIK debt will still rise to more than £590 million.

.........

Manchester United Supporters Trust said yesterday that the club have racked up £437 million in advisory fees and interest under five years of Glazer rule, while debts have soared to more than £700 million. The fees are before any dividend taken out by the Glazers this year.

Under the terms of the PIK notes, United must keep the debts of their operating company at less than five times the level of their profits before interest — which will be tested on August 14. Company debt stands at £539 million but the club’s profits will result in a shortfall of several million.

It is understood that United’s commercial management team believe they can increase profits through a series of new deals, allowing the club to get their interest rate back to 14.25 per cent next year.

Commercial revenues were £66.9 million last year — 25 per cent of total turnover — and United’s commercial team, led by Ed Woodward, have signed a series of niche deals including, recently, a partnership with Concha y Toro, a South American wine exporter.

http://news.bbc.co.uk/sport1/hi/football/teams/m/man_utd/8691007.stm

No wonder they need to limit the signings.

Thank god Man U are lucky to have such good owners running the club and hardly charging any fees for the privilege. And if success doesn't come on the pitch where the glory hungry fans switch allegiance too?

Got love the optimism of the commercial dept that they can increase revenues and get the interest rate back down.

[R K]

Bond-holders will be provided with their first formal financial update before the end of this month and they are expecting to be told that the Glazers have taken a £70 million dividend out of the club to pay off the PIKs.

Jonathan Moore, an Evolution Securities analyst who covers United’s bond, said: “People knew this [interest rate hike] could happen, but it increases pressure on the Glazers to get money to pay down this PIK debt. And the obvious place for them to find that money is in the club itself.

“The Glazers said in the bond prospectus they could take out a dividend of £70 million. We expected them to do that sooner rather than later and for them to have done it already, although they haven’t told us that yet.”

£70 million = Ronaldo sale proceeds.

It's already gone.

[Charlie Don't Surf]

Bring it on! I can't think of anything more arbitrary than supporting a premiership football team

[OnionTerror]

Could well be the beginning of the end for Utd. I can see Man City overtaking them within the next couple of seasons (if they make the right signings). Ferguson says that he doesn't need to bring anyone in, but it'll be interesting to see if thats still the case during the january window, and they're languishing in mid-table.

Their youth just aren't cutting it at the moment (if thats what he has to rely on), and it'll be interesting to see how the new champions league rules on club finances effect their qualification status by 2012. Their elder statesmen (Scholes, Giggs & Van Der Saar for instance) will need to be replaced within a year or two. A replacement for Scholes could well be £25m+, if they haven't got a homegrown ready-made lad available.

[betterToDo]

Bring it on! I can't think of anything more arbitrary than supporting a premiership football team

+1

[Georgia O'Keeffe]

NFL team franchises?

Indianapolis today,Baltimore tomorrow?

NBA?

whilst things are bad in soccer,reassuringly,they could get an awful lot worse.

]Woolwich Arsenal, Highbury Arsenal, Ashburton arsenal, The UK taught the US about sports franchises

Not to worry 90% of prem clubs will likely be bust within 3 years anyway so Manu will be in good company

[blankster]

I've never been able to get excited about men kicking a ball about. Manchester United must be one of the most top-heavy organisations imaginable.

Still, a lot of people seem to place an inordinate amount of importance on a few men kicking a ball about. If I have to watch people kicking a ball about, I'd rather watch women doing so because they're better looking.

[Toto deVeer]

Well, the one saving grace for Man U fans is that Liverpool is in even worse condition...

[Executive Sadman]

Shame Brown isnt still around, he'd be there in a shot to save the world manchester united with money for hospitals and schools because it the 'right thing to do'

And BA. And Greece.

[R K]

Could well be the beginning of the end for Utd. I can see Man City overtaking them within the next couple of seasons (if they make the right signings). Ferguson says that he doesn't need to bring anyone in, but it'll be interesting to see if thats still the case during the january window, and they're languishing in mid-table.

Their youth just aren't cutting it at the moment (if thats what he has to rely on), and it'll be interesting to see how the new champions league rules on club finances effect their qualification status by 2012. Their elder statesmen (Scholes, Giggs & Van Der Saar for instance) will need to be replaced within a year or two. A replacement for Scholes could well be £25m+, if they haven't got a homegrown ready-made lad available.

2 points away from winning four titles back to back?

A free kick away from a 3rd CL final?

Without wanting to engage in a partisan debate about that I don't think your assertion holds up.

I agree players like Scholes are virtually irreplaceable, both for United and England. You'll only see 1 or 2 like that in a generation, perhaps longer. He is this generation's.

[OnionTerror]

2 points away from winning four titles back to back?

A free kick away from a 3rd CL final?

Without wanting to engage in a partisan debate about that I don't think your assertion holds up.

I agree players like Scholes are virtually irreplaceable, both for United and England. You'll only see 1 or 2 like that in a generation, perhaps longer. He is this generation's.

Their champions league group wasn't exactly overly taxing for them - AC Milan are currently a fading light, and the Premiership has got worse over the last season or two. The lower sides have got slightly better, and the top have got slightly worse, and without Ronaldo, Man U have been struggling..Take Rooney out of the mix, then it does make it more difficult for them.

Believe me, I'm no premiership fan (although I do appeciate Arsenal) & I support a League 1 side, so there won't be a "partisan" debate"..La Liga is where its at..

[Prof]

2 points away from winning four titles back to back?

A free kick away from a 3rd CL final?

An little less arrogance from being a team that I really could admire.

Make no mistake, Man U are a good footballing side, but some words/actions of the players/manager take the shine off, in my opinion.

I reckon you would have been trophyless, had the ref made the right decision over the Vidic/Agbonlahor incident.

An example of Man U arrogance : After the final, an interviewer asked Vidic if he felt lucky to stay on the pitch. His reply wasn`t "yes, I think I might have been", it was more like "no, I did nothing wrong". Although controversial, I seem to remember that most pundits thought that he was lucky to stay on. Ferguson often displays the same sort of attitude. Maybe that`s why they have been so succesful over the years, but I still don`t like it.

[Andy_K]

United had no debts and a healthy profit coming in every year until the Glazers took over. They were the model of a financially stable, successful football team.

Then the takeover landed them with well over £500m of debt, which has now swollen to well over £700m. It is frustrating that the dire state of their finances has come not from overspending nor excessive player wages like other clubs, but simply being with landed with the debts of their own takeover.

[Brave New World]

2 points away from winning four titles back to back?

A free kick away from a 3rd CL final?

Without wanting to engage in a partisan debate about that I don't think your assertion holds up.

I agree players like Scholes are virtually irreplaceable, both for United and England. You'll only see 1 or 2 like that in a generation, perhaps longer. He is this generation's.

Carlo's first season and he already has the old man on the ropes. Chels have not been great for large swaithes of this season but done the double, next season we will only get better, as with City and Spuds, possibly Arsenal. You boys are screwed though, no buying power to replace an againg squad (our old farts are a couple of seasons away from being as OAP as Giggs, Scholes, Neville and Van). Smalling? Says it all really.

[R K]

Same old.........

Perhaps this will cheer you up. That's an apparently grown man crying by the way.....

[IWantItNow]

The future for Manchester United is bleak, no doubt about it. I used to be mega into football but then realised when I pay £630 + cups and european games for a season ticket, £30 on the home shirt + pies, travel and beer, all that money is going into Ronaldo's agents pocket who is trying to sell him to Real Madrid.

I'm sorry for the state football is in but when you're paying the team over £50k a week each (some much more than that), then it's hard to sympathise.

[IWantItNow]

Carlo's first season and he already has the old man on the ropes. Chels have not been great for large swaithes of this season but done the double, next season we will only get better, as with City and Spuds, possibly Arsenal. You boys are screwed though, no buying power to replace an againg squad (our old farts are a couple of seasons away from being as OAP as Giggs, Scholes, Neville and Van). Smalling? Says it all really.

How many times have we heard that? SAF is a genius in football. Amazing some people refuse to give him credit.

[Guest_flaps_*]

The future for Manchester United is bleak, no doubt about it. I used to be mega into football but then realised when I pay £630 + cups and european games for a season ticket, £30 on the home shirt + pies, travel and beer, all that money is going into Ronaldo's agents pocket who is trying to sell him to Real Madrid.

I'm sorry for the state football is in but when you're paying the team over £50k a week each (some much more than that), then it's hard to sympathise.

It's one thing that has always amazed me, that fans don't seem to make the connection between the high cost of supporting a team these days and how much the players are paid. You are just pouring your money into the pockets of these top players who don't even have any loyalty to your club.

It even cost me 16 quid to watch Mansfield Town this season in the Blue Square Prem. The first season ticket I had for them about 20 years back was 23 quid!

Not that I begrudge paying as much as 16 quid for such football, as with such small crowd and the quality of players, you know they aint creaming it in!

[robo1968]

Same old.........

Perhaps this will cheer you up. That's an apparently grown man crying by the way.....

Is he crying because?

He is captain of the side that won the CL final OR

because he is captain of the side that one the premier league OR

he is the captain of a side that has just won the FA cup

I don't support Chelsea but it didn't turn out too bad this year for them did it

[Gigantic Purple Slug]

2 points away from winning four titles back to back?

A free kick away from a 3rd CL final?

Without wanting to engage in a partisan debate about that I don't think your assertion holds up.

I agree players like Scholes are virtually irreplaceable, both for United and England. You'll only see 1 or 2 like that in a generation, perhaps longer. He is this generation's.

Certainly the type of tackle Scholes likes to put in hasn't been seen for a generation.

[OnionTerror]

It's one thing that has always amazed me, that fans don't seem to make the connection between the high cost of supporting a team these days and how much the players are paid. You are just pouring your money into the pockets of these top players who don't even have any loyalty to your club.

It even cost me 16 quid to watch Mansfield Town this season in the Blue Square Prem. The first season ticket I had for them about 20 years back was 23 quid!

Not that I begrudge paying as much as 16 quid for such football, as with such small crowd and the quality of players, you know they aint creaming it in!

I suspect that a half decent full-time player in the Conference is making around £25k a year. Indeed, not mega wages. £16 for a Conference game..blimey..I remember when it was £9! ten years ago. If you want to have a decent stab at getting into the football league, then you need to go full-time. You don't want to do a Weymouth, go full-time, get skint within a couple of years, then get relegated two years on the trot.

[IWantItNow]

Is he crying because?

He is captain of the side that won the CL final OR

because he is captain of the side that one the premier league OR

he is the captain of a side that has just won the FA cup

I don't support Chelsea but it didn't turn out too bad this year for them did it

Someone inform UEFA...Chelsea apparently won the CL (I can only assume that means Champions League) even though the got knocked out in the round of 16.

[frozen_out]

La Liga is where its at..

Aaaaahhh... the clarion call of the barstool bluffer.

Have you seen the state of La Liga this year?

[geoffk]

I used to follow Liverpool all over Europe but the last football game i went to was at hillsbourough on that mad day....That day i realised that it was all about money and nothing else.....it pains me to see people still falling for it...

[The Generation Game]

I used to follow Liverpool all over Europe but the last football game i went to was at hillsbourough on that mad day....That day i realised that it was all about money and nothing else.....it pains me to see people still falling for it...

The only model to take these days is the Burnley model. Take the money and run. Secure your clubs financial future and then wait for the dust to settle.

My team took a different option upon promotion to the premier league in 2008 and it'll take financial management infinitely better than that employed over the last 2 seasons to keep the club trading. This is even with the unfair advantage of 4 years of parachute payments, a set-up devised to make the 2nd division as uncompetitive as the top one.

How I yearn for the days when a team like Nottingham Forest could conquer Europe.

God bless Sky and god bless the Premier League. Another success story.