Lurking in the full, heart-sinking detail of the Glazer family’s proposal to borrow £500-million (R6,1-billion) — a partial replacement for the £700-million debts their take-over has loaded on to Manchester United — is a page documenting the millions United have paid out to the family members themselves.
None of the Glazers appears to have taken a salary out of the club since that May 2005 takeover, which United fans bitterly opposed and which has since cost the club more than £325-million in interest.
Since then, ticket prices have almost doubled at Old Trafford, where previously they were restrained to cater for the regulars at the Lou Macari Fish Bar and the prawn sandwich consumers.
The MU Finance plc Prospectus sets out the fortune the Glazer family has reaped from the club they borrowed £540-million to buy. From July 1 2006, in five separate payments, a round total of £10-million was paid in “management and administration fees” to companies affiliated to the Glazers. Under the new bond issue, the family is entitled to be paid up to £6-million by United in management and administration fees.
On June 30 last year United entered into a consultancy agreement with SLP Partners, “a company related to certain of our ultimate shareholders”, to pay up to £2,9Âmillion. On top of that, on December 19 2008 each of Malcolm Glazer’s five sons and one daughter, all of whom are directors of Red Football Limited, each borrowed about £1,66-million from the club, a total of £10-million.
Added together, the management fees, consultancy agreement maximum and the £10-million the six family members borrowed from United make a total of £22,9-million paid to the family and their affiliated companies in three-and-a-half years.
No explanation was offered for these fees, or for why the Glazer family felt the need to borrow £10-million from Manchester United. The Glazer family’s official spokesperson, who is responsible for discussing United’s financial affairs, declined to comment.
Duncan Drasdo, chair of the Manchester United Supporters’ Trust, was more forthright. “Now we know that as well as their takeover imposing a huge debt on the club and the massive interest payments United have to service each year out of the club’s ticket and other income, the Glazer family have paid themselves many millions of pounds personally,” he said.
“The tide is turning at Old Trafford as fans see how much the takeover has cost, the increased ticket prices and the failure to invest in the team despite £81-million received from selling Cristiano Ronaldo. We do not want the Glazers to refinance the massive debts they have brought to the club — we want them to go.”
The accounts released were for just one company, Red Football Limited, in the thicket the Glazers have built around the Old Trafford crock of gold. The figures showed the net interest for the year to June 30 2009, on the £514,5-million debts loaded on to that company, was £42-million.
That, then, soaked up more than half the galactic fee Real Madrid are scheduled to pay for Ronaldo. Another United company records the £175-million also owed to hedge funds, at 14,25% interest — a charge in 2008-2009 of £25-million.
Sir Alex Ferguson has said that the Ronaldo money is available to him and he had “absolutely no issue at all with the club’s finances”. Yet the £81-million took United from a thumping multimillion-pound loss it would have recorded into the £26-million profit being highlighted.
It is, quite simply, impossible to sustain the argument, to intelligent supporters stumping up their hard-earned cash for tickets at ever-increasing prices, that the £700-million borrowings the Glazers have imposed, and the £67-million of interest payable last year, is having no impact.
Sources are saying that United’s sheer size, income and dedicated following make the bond issue an attractive enough offer — despite the “high degree of risk”, including a possible fall in success, decline in crowds and uncertainty over who will replace Ferguson.
The fees to be earned by the bankers and professionals who have made this all possible is £15-million. By the end of it the Glazer family may be able to replace the £500-million they have borrowed with a different £500-million borrowed on slightly less terror-inducing terms. But Manchester United, formerly the proud, rich football behemoth of the Premier League, will still be laden with the extraordinary debts of a take-over that nobody wanted, except for seven members of a family in Florida and their well-paid advisers.
United’s debt woes arise at a time when Union of European Football Association (Uefa) president Michel Platini is proposing to ban debt-ridden clubs from European competitions. In an interview with the Daily Telegraph Platini said: “We have three years to regulate the situation. The idea is not to kill the clubs but to help them have better balance. The philosophy to participate in our competitions is you must not spend more money than you receive.
“If [Manchester] United have €300-million and they spend €400-million — no! If Liverpool pay €60-million [interest] every year to the banks, it’s a lot of money.
“Every owner has asked me for a better philosophy, for better transparency. In Germany debts are not accepted. In England they are,” he said. — © Guardian News & Media 2010