Manchester United have a staggering £180 million in their transfer coffers but the club have told investors that the kitty can be guaranteed only £25m each financial year.
United’s latest set of financial figures released last Friday revealed that the £80m Cristiano Ronaldo windfall has not yet been spent.
In a conference call to investors later that afternoon, United chief of staff Edward Woodward reiterated that the club’s guidance figure of £25m for net transfer spending remained valid.
Given that theOld Trafford club also have a further £75m credit facility available, in theory there is £180m available to spend on players, which would give Sir Alex Ferguson budget to rival Manchester City ’s.
The reality, though, is somewhat different. The quarterly results for the period January to end of March 2010, which take in the first nine months of the financial year, showed that the Glazers are continuing to increase the debt burden on the club despite the healthy growth in matchday, media and commercial revenue.
Although the overall debt in the club has decreased from £543.3m year-on-year to £520m, it has increased by £12m since the Glazers took out a £500m bond in January to refinance what the club calls their “senior debt”.
The accounts of Red Football Ltd, United’s holding company, show a cash balance of £95.9m, but around £45m of it will be paid in interest. The figures also disclosed that the club lost £40.7m in a disastrous interest rate swap secured as part of a 2007 financing arrangement.
United’s latest set of financial figures released last Friday revealed that the £80m Cristiano Ronaldo windfall has not yet been spent.
In a conference call to investors later that afternoon, United chief of staff Edward Woodward reiterated that the club’s guidance figure of £25m for net transfer spending remained valid.
Given that the
The reality, though, is somewhat different. The quarterly results for the period January to end of March 2010, which take in the first nine months of the financial year, showed that the Glazers are continuing to increase the debt burden on the club despite the healthy growth in matchday, media and commercial revenue.
Although the overall debt in the club has decreased from £543.3m year-on-year to £520m, it has increased by £12m since the Glazers took out a £500m bond in January to refinance what the club calls their “senior debt”.
The accounts of Red Football Ltd, United’s holding company, show a cash balance of £95.9m, but around £45m of it will be paid in interest. The figures also disclosed that the club lost £40.7m in a disastrous interest rate swap secured as part of a 2007 financing arrangement.
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The fear of many United supporters is that the Glazers will dip in to the Ronaldo money to partially repay the PIK debt.
When the bond was issued, the club said that net spending would average £25m. During the current financial year, the net spend on players is £26.4m following the transfer last month of Ben Foster to Birmingham City.
This takes into account the purchases of Antonio
Given that Sir Alex Ferguson appears to have reached his limit for the current financial year, it suggests that any summer spending will come after June 30.
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