Seeing as we don’t know anything about the Glazers’ business plan nor any details of how they plan to deal with Manchester United’s debt (save raising ticket prices), let’s look at what we do know:
- We know that the rising ticket prices and the new policies surrounding season tickets and especially the Automatic Cup Scheme has priced many hardcore Manchester United supporters out.
- We know that the Glazers made a move to restructure Manchester United’s debt in the summer but failed to reach an agreement because of rising borrowing costs.
- We know that in effect, Manchester United is owned by the banks until the club can pay off the debts. That’s assuming they can pay the interest on those debts first, which was 60m at last count and is now reported to go past 70m this year.
- We know that as long as the club keeps doing well (and there’s no reason that it shouldn’t), Manchester United can keep servicing the interest payments through it’s income and still have money left over to buy players.
It’s a tough position to be in as a fan. I love the club, I love the fact that we’re doing well financially in terms of pure income (the AIG deal, gate receipts, global merchandise sales, the Premier League TV deal, etc). However, the fact that someone used borrowed money to buy the club and saddle it with debt and then passed on the interest payments to the fans…it’s just galling and more than the debt, it’s the fact that the fans have to pay for it that’s pissing most people off (some just don’t like Yanks, but we’re more civilised, see?).
The MUST reports that season tickets this year have not all been sold out, that the famous waiting list has virtually disappeared and that after the legal action taken by several fans against the club, next year could turn out to be a lot worse for Manchester United if fans refuse to buy tickets. It’s a risk to bank on the popularity of a club by hiking prices and pissing off the hardcore supporters – and it can backfire in United’s face, although to be fair there’s no sign of that happening this season at the very least.
There has been rampant speculation that Manchester United could be sold as the Glazers run to save their asses. This is untrue as far as I know, and for one simple reason – the longer the Glazers hang on to the club, the more valuable it is going to become. AND…very little of their own money is in this venture, so it’s not as if they have any assets stuck. For the Glazers, it pays in spades to use the club’s income to pay of the debt over time and once the club is relatively debt free (and therefore the Glazers become entitled to most of the proceeds of a sale), they could sell if they wished.
Such a transaction would not happen this decade. I’m not saying that they definitely won’t sell, just that since it’s not their money and they stand to gain little out of selling at this point (as compared to selling 10-20 years down the line), they are far more likely to hang on to the club.
Fans will continue to buy tickets. Prices will continue to rise. Some rich Russian or Arab or maybe a Chinese or an Indian will buy Manchester United in the future. The fans will watch, helpless, as they pay for the Glazers’ retirement fund. We’re hostages, as much as we are fans.
Given the choice of supporting Manchester United through thick and thin and turning your back on this situation, what would you do?
Also see:
what things were like last year.
Football Debt, Spiralling Wages and the future of European Football
Manchester United’s debt, analysed
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