Manchester United the Glazer's Blaze
It is not £1.1bn but add £400m more to the real debts, the American owners of Manchester United owe to banks. These loans are said to be due to heavy borrowing against their shopping mall business in America. According to research done by one of the leading British Broadcaster, there is hard evidence against the Glazer family’s debt level, which might threaten their hold on the Manchester United football club.
According to Glazer family’s spokesman the family holds more than £2bn in assets. However these revelations made by the media will definitely cause uproar among some supporters no matter what Glazers say. The extent of the debt owed by the Glazers is likely to fuel a continuing revolt by some supporters, who oppose their ownership of the club.
These revelations are coming at a time when sports governing body is facing questions about the debt levels of Premier League that is reaching a combined total of £3.4bn.
In the case of Glazers, the mortgage documents seen by the British broadcaster show that the Glazer’s have borrowed £388m against their shopping malls and £66m against the Tampa Bay Buccaneers, their American National football League team.
Some Manchester United fans fear that these debts will be a hurdle in the club’s overall performance and these debts will leave the club with no money in the future to buy new generation of football stars. These disappointed fans have launched a new campaign “green and gold” in a show of defiance against the Glazer’s ownership. This campaign is proving to be hugely successful and its members have reached to 158,000. Even David Beckham, a former Manchester United star is willing to lend his support.
These supporters claim that the ticket prices have been increased by more than a third, yet there are no new star players on the side. They even point out to the fact that Cristiano Ronaldo was sold for £80m last year and any player of similar quality is not replacing him.
On the other hand the club is adamant that there are no issues with cash and the club has plenty of money for the manager to buy new talents. The Glazers also came out and confirmed that their assets are worth more than double of this amount.
One of the most prominent disgruntled Manchester United supporters is Andy Green, who is a city analyst. The 37 year old was at the forefront to uncover these massive debts of the Glazer family. According to Green the money was borrowed at inflated valuations right at the top of the cycle mainly from the demise banking giant Lehman Brothers.
Glazers own shopping centre business in America as well as First Allied Corporation, along with Manchester United and the Tampa Bay Buccaneers. Their company First Allied has no accounts available, as it is a private company.
What Mr. Green found was mortgages taken out on 63 of 64 First Allied shopping centers, totaling £388m ($570m). As the loans were taken out from Lehman Brothers, after its collapse the mortgage debts lived on and the fact that many of these shopping centers are doing well makes the situation even worse. This added with Glazers Manchester United debts making it hard for the family to keep up with the interest payments. The added worry to the family is that these factors amount to negative equity of their prime assets, which is never, a good sign.
According to Mr. Green 24 shopping centers owned by the Glazers are on a watch list of banks. Four shopping centers in four different states have already gone Bankrupt.
At the time Manchester United was bought the Glazers borrowed £500m and paid £272m in cash. Before the takeover of Manchester United the Glazers had remortgaged 25 of their shopping centers.
According to statistics the First Allied properties now worth £378m and mortgages valued at £388m, which makes the shopping malls business worth next to nothing.
On top of the Glazers’ debt pile is Red Football, the parent company that owns Manchester United. But Manchester United’s Chief Executive was adamant that these debts have nothing to do with the club. He also asserted that all these debts will be paid off without involving the club and the owners are dedicated to the club and its future success.
What Manchester United is facing reflects the bigger issue faced by the Premier league. It has a lot to do with the British economy and the over all-spending culture in the country as well. Where Liverpool and West Ham are also facing huge debts and Portsmouth seeking bankruptcy protection, the overall picture of the football clubs seem quite bleak. Maybe if the American solution is not working for the Manchester United, a Russian experiment might help it out of troubled waters.
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