It’s the day Man United fans hoped they’d never see, the day they’ve been turned into a selling club.
With the publication today of Red Football Joint Venture’s (the parent company of Man United) finances, the businesses spiralling debts have been exposed. Reaching an eye watering £649.4m, an increase in the last year of £45m, the problem for Man U is that their debt continues to compound.
Even the Bank of England’s decision today to keep interest rates at 0.5% isn’t going to help the club. Approximately one quarter of their debt was borrowed from hedge funds when the Glazers bought the club in 2005 at a staggering 14.25% – and in the current economic climate the club will struggle to renegotiate these rates.
There is a positive story though, as the group recorded it’s highest ever turnover at £256.2m – an English club record. But this was the result of an exceptional season winning both the Premier League and the Champions League – a feat that looks all the more difficult after Porto’s last gasp equaliser on Tuesday night.
The club continues to focus on its revenue streams to offset their exceptional interest payments and rumours abound that the Prudential are being lined up as shirt sponsor replacing the troubled US insurance giant AIG. But even if the Prud do sign up for the £50m+ that AIG paid, the club is still going to need to find more revenue and that will come from selling some of their prized assets.
I predict that regardless of Alex Ferguson’s desire to keep Christiano Ronaldo the player will be sold to Real Madrid this summer. The £75m reportedly on offer will go some way to covering the interest payments. But don’t be surprised if the firesale doesn’t stop there. Carlos Tevez is another obvious candidate where significant million pound savings can be found. And they’ll be others too – Federico Mancheda anyone?!
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