Manchester United at last getting rid of Glazers

The Red Knights' dreams of rescuing Manchester United from the grips of the Glazer family look to have come to a dead end.

It was expected the Red Knights group would launch a formal bid for the Old Trafford outfit at some point before the World Cup.

However, the Glazer family last week stated they had no intention of selling the club and previous claims the American owners had rejected a £1.5billion bid from a Far East consortium already seem to have led to a belief amongst the Red Knights that there is little point making a substantially lower offer that was also certain to be rejected.

"The Red Knights remain committed to pursuing their efforts to try and help bring ownership of Manchester United to its supporters, and under a structure with materially less debt," said a statement released on behalf of the group this morning.

"As we have maintained however since news of our ambitions first emerged in March, we will only attempt to purchase the club at a sensible price, consistent with the long-term interests of the club.

"Persistent speculation in the media of inflated valuation aspirations has made our goals less attainable, as potential investors have strongly reinforced our views that we should not move forward at a price uneconomic for the future of the club."

It effectively means the Red Knights will not move forward until they get an indication United would be sold for around £1billion, a sum they believe is realistic given current market conditions.

The news will come as a major disappointment to fans opposed to the current owners and those who have mounted a major campaign against them.

However, the likelihood is that the Manchester United Supporters Trust (MUST) will now call for a boycott of season tickets and other club merchandise in an effort to damage revenue streams and undermine the Glazers' business plan.

Whether this has any effect is another matter.

United chief executive David Gill recently claimed season ticket sales were roughly in line with previous years and the club's satellite London-based commercial arm recently topped £200million in new deals alone.

With American insurance giant Aon about to begin a four-year shirt sponsorship deal, there is no sign of a reduction of United's pulling power, even though they ended last term with only the Carling Cup as silverware, having missed out on both the Premier League and Champions League trophies.

Club officials have repeatedly stressed Sir Alex Ferguson has the funds to strengthen his squad this summer, although so far, the only arrivals are Mexican striker Javier Hernandez and Fulham defender Chris Smalling, both of whom have been bought with an eye on the future.

"We understand that many supporters were hoping that we might be in a position to make a bid before the season ticket renewal deadline," continued the Red Knights' statement.

"However, our approach is best served by long-term interests of all. We have never taken a stance on season ticket renewals, it is a personal choice for all supporters.

"We have spent some considerable time assessing the value of the club.

"If the fundamentals lead to a more realistic re-assessment then, along with our co-operation with MUST and other Manchester United supporters, we will aim to achieve our goals."

United Have £180mn for Transfers but Debts made it only £25mn Available

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 the Old 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.

Digging deep? | Glazers could open up transfer funds

The greatest hindrance to United’s transfer plans could lie in the payment in kind (PIK) loans, which, although not revealed in the results posted by the football club, are estimated to have grown to £225m. They are due to increase to 16.25 per cent in August because of the firm’s high debts.

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 Valencia, Gabriel Obertan, Mame Biriam Diouf, Chris Smalling and Javier Hernandez but not the sale of Ronaldo, who moved to Real Madrid at the end of the 2008-09 financial year.

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.

Manchester United Owners Set for Panorama Treatment: Glazers Set for Probe

Manchester United finances under Glazers to be subject of BBC Panorama investigation
Manchester United’s finances under the ownership of the Glazer family, the club’s £712 million debt and the £80 million raised by the 2009 sale of Cristiano Ronaldo are set to be the subject of an investigation by Panorama, the BBC current affairs programme.

United, who are due to announce quarterly financial results on Friday as a condition of the club’s £500 million bond issue, have yet to co-operate with the programme makers ahead of the proposed screening date of June 7.
But with manager Sir Alex Ferguson having not spoken to the BBC since accusing the corporation of “breathtaking arrogance” following a 2004 Panorama expose into the alleged business dealings of his son, Jason, the programme is unlikely to soothe relations.

Although the investigation is understood to be based on a broad theme of football club ownership and the game’s financial health, the situation surrounding the Glazers and attempts by the Red Knights to launch a supporter-backed takeover bid for United are believed to form the main thrust of the programme.
Despite the Glazer family’s consistently-stated determination to resist any takeover bid, supporter groups behind the green-and-gold anti-Glazer campaign continue to claim that the Americans’ business interests in their home country, which include nationwide shopping malls and real estate, are suffering as a result of the economic downturn.
Those claims, and suggestions that United’s income is being used to service the club’s debt, are understood to form part of the Panorama investigation. (Telegraph)

Now I am sure I am not the only one who hopes that the BBC programme digs some serious dirt on the Glazers but whether or not a televisual feast of embarrassments will have any effect on whether the Manchester United owners decide to leave is another matter.

Clearly the level of debt the club has been saddled with since the Americans arrived is mind boggling and hopefully the programme will try to get to the meat of that debt and present their findings in a manner that is easy to understand.

You see when we, the football fans, see that a club has amassed debts of £712m its hard to quite work out how this has happened. Its clear that the Glazers purchased the club with loans that they then have made the club pay the interest on but I would be interested to know how their previous debts with other ventures has been tied into the club, as these could be the types of problem that take decades to resolve.

Anyway, should be a programme not to be missed!