Manchester United: The world’s most popular and valuable club gets into financial trouble
Manchester United has to be the most beloved and strong football club in the English Premier League. It has had a fantastic history spanning many decades and has also been the most successful club in England for many years now. It has spawned some of the
greatest football talent in recent history and was until recently one of the most profitable clubs in the country. It seems the recession has hit the biggest club in the country very hard and it has reported record losses for this financial year. With legendary
manager Sir Alex Ferguson coming under fire as well, we have to wonder if there is light at the end of the tunnel for Man U in the next few years.
Manchester United is a very successful Premier League football club based in Old Trafford, Manchester. It was established in 1878 and was initially named the Newton Heath LYR Football Club. It changed its name to the now world famous Manchester United in
1902. The club was located somewhere else before but moved to its present location of Old Trafford in 1910. The club moved along slowly and steadily, gaining strong players and notching up victories.
The early history of the club is very interesting and it seems Man U was plagued by financial trouble even then. In 1902, the club had managed to rake up debts of £2600 and was served with a winding up order. The captain of the team at the time, Harry Stafford,
managed to go out and found four local businessmen who were willing to invest money into the struggling football club and the club’s fortunes were revived. The four new investors also changed the name of the club to Manchester United. After that the club had
some successes and managed to secure some titles.
The fortunes of the club once again dwindled and in 1927 with the death of principal founder J. H. Davies, the financial position of the club once again floundered. The club would have been declared bankrupt if it would not have been for James W. Gibson,
who invested a huge £2000 and assumed control of the club. The club performed better in the following few years until the Second World War put an end to all football matches in the country.
The Golden Period in Man U’s history came under the managerial direction of Matt Busby who led the team to an FA Cup win in 1948 and many more wins during his tenure. An air disaster struck the club and 8 of its star players were killed during a crash that
almost destroyed the team. Busby took it upon himself to rebuild the team and focused on a young talented player named George Best who would go on to become one of the biggest football stars of his time.
We then next enter the period of Alex Ferguson’s reign as manager of the club. He is the second most prolific manager in the club’s history and has led the team to numerous Cup wins and under his leadership Man U has not been relegated for as long as anyone
can remember. In 2008, the club won the FIFA Club World Cup and also the 2008-2009 Football League Cup. This feat was followed on by the club’s third successive Premier League title. In 2010, Manchester United beat Aton Villa to retain the League Cup.
Over the time that Sir Alex has been in charge of the club, its financial position has been very strong. But the recession hit the club hard and it has been struggling recently. In 2009, Man U sold Cristiano Ronaldo to Real Madrid for a world record figure
of £80 million. This helped to bring the financial position of the club back into positive figures but it was not to last.
In 2009, Manchester United made a profit of £48 million but despite the sale of Ronaldo for that huge sum mentioned above, it still registered a pre-tax loss of £79.6 million in 2010. It seems the problem is that the club has huge debts which it used to
buy players with and run its operations with. The interest payment on the debt is a huge £40 million. This is really hurting the club and it has forced the management to state that they will not be selling any players despite their financial position.
There is hope for the club yet, because it has very strong revenues from ticket and merchandise sales and will hopefully be able to come out of debt and be back in profit in the next few years. An institution like Man U cannot and will not go down that easily.
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