Word is that Manchester United has leaked millions of pounds to the owners and on top of that the owners haven’t shown too much of respect for the heritage or the fans of the club. Also the ticket prices at Old Trafford have been increased massively.
The debt is said to be of around £716.5m of the parent company of United. Obviously, United is a big club with a big fan following and big revenues being generated but the financial future of the club completely depends on the success of the club on the field. Surely, with money being taken out in huge sums from the club is going to have a major effect on the performance of the team.
In the last couple of weeks, Manchester United had to reveal a document which declared that the Glazer family has been looking for £500m in loans and it will be the third time that United will have to raise massive loans to finance since they took over the club (the second time they are refinancing the club).
The document revealed a lot that we did not know already. We did not know that the Glazer family is paying themselves big money every year. “How big?” you might ask.
Well, according to the Guardian writer and the esteemed financial football expert, David Conn, the family has had £10m all-together from July 2006 to 30 June, 2009 and they have named it management fees. They have got a consultancy agreement which pays them a maximum of £6m a year. Also the five brothers and a sister of the Glazer family have personally borrowed around £10m from United.
Moreover, huge interest is coming out of United every year. If they get this new £500m loan, people say it will be at nine percent interest and that is £45m a year. Plus they have this very expensive debt already which is running at 14.25 percent a year; £200m already. The reason behind this new debt is to release cash that they have saved up from selling players. That is the money from selling Cristiano Ronaldo and we now know that money is not available to Alex Ferguson, not all of it anyway.
For more on the financial future of Manchester United, follow the link and listen to the Guardian writer and financial football expert David Conn in the Episode 37 of the Soccerlens Podcast.
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