Premiership's most successful club relying on bonds to dig it out of a mountain of debt
This week's ignominious defeat to local rivals Manchester City and the difficulties associated with getting away a £500m (e710m) bond issue represent Malcolm Glazer's biggest crisis since he bought the Red Devils five years ago.
Normally a defeat in the League Cup, English soccer's second-string knockout competition, would be a matter of little importance to Manchester United fans. Indeed, in the past Manchester United manager Alex Ferguson has been known to use the competition to 'blood' young players.
With the Red Devils still in contention for both the European Champions League and the English Premiership, the League Cup is generally considered very small beer indeed.
But this week's tie was different. Not only were United playing their bitter rivals City, newly revived with several hundred million pounds of Middle Eastern oil money, but, with the club having recently been bundled out of the FA cup by League One (the old third division) team Leeds, there is a growing sense of unease at Old Trafford.
It started with last summer's sale of Cristiano Ronaldo, United's most prolific goalscorer, to Real Madrid for a record £80m. At the time Ferguson promised worried Manchester United fans that the money would be used for new signings to strengthen the side.
It hasn't happened yet. Instead, most of the money received from the Ronaldo sale has remained unspent. Even more worrying is the fact that, far from splashing out on new players, United have made a net profit of £7m from buying and selling players over the past three years. Traditionally one of the big spenders of the English game, United are now a selling club.
The bond prospectus issued by the Glazer family, which bought United for £790m in 2005, shows why the club has switched to penny-pinching mode.
The Glazer takeover has saddled United, the richest club in the world until the takeover, with debts of £716m. The interest bill on these debts was a crippling £68.5m last year.
This huge interest bill is wiping out Manchester United's profits. If it hadn't been for the money received from selling Ronaldo it would have recorded a loss of over £70m in the year to June 2009. And that's barely the half of it. By far the most expensive portion of United's debts are the payment-in-kind (PIK) notes. These were sold to a group of hedge funds to help fund the 2005 takeover and carry a punitive 14.5pc interest rate.
However, the interest on these does not have to be paid every year and 'rolls up' instead. Last year the amount outstanding on the PIKs rose by a further £27m to £202m.
The PIKs represent Manchester United's very own 'toxic asset' and desperately need to be refinanced by new, cheaper debt. Which is where the bonds come in. These are expected to pay an interest rate of approximately 8.5pc. Not cheap, but considerably less usurious than the cost of the PIKs.
If the bond issue is successfully got away, which is by no means a foregone conclusion, United will also be able to borrow a further £75m to allow Ferguson to buy some desperately-needed new players. With first-team stalwarts such as Ryan Giggs, Paul Scholes and Gary Neville all approaching the end of their careers, the Manchester United squad urgently needs strengthening.
Replacing them with players of similar quality will not come cheap.
It was all so different when Malcolm Glazer took over the club in 2005.
After the vicious spat between Ferguson and Irish investors John Magnier and JP McManus (who had built up a 29pc shareholding in United) over the ownership of the stud rights to racehorse Rock of Gibraltar, Glazer seemed to promise an era of calm and tranquillity at Old Trafford.
Glazer, who will be 82 in May, inherited a jewellery business from his father. In the 1970s he expanded into property, buying several trailer parks in Florida. He has since diversified into food service equipment, food packaging, broadcasting, energy and banking.
One of the companies which he has purchased over the years was Zapata, the oil and gas company founded by former US president George W Bush.
In 1995 Glazer made his first foray into professional sport when he purchased American football team Tampa Bay Buccaneers for a then record $192m. He immediately began to lobby the local council to fund the construction of a new stadium, threatening to move the franchise if he didn't get his way. The council quickly capitulated, voting a sales tax increase to fund the construction of Raymond James Stadium at a cost of $200m.
With the Glazers having the rights to most of the revenues of the taxpayer-funded stadium, the Buccaneers' value soared with 'Forbes' magazine valuing the franchise at $963m in 2007.
Complaints about the hard-ball tactics employed by Glazer to force the local council to build a new stadium were muted in the early years as the Buccaneers enjoyed their most successful run ever, culminating with their victory in the 2002 Superbowl. Unfortunately, this success hasn't been maintained with the team winning only three of their 16 games last year, their worst season since 1991.
In the first four years of Glazer ownership Manchester United have enjoyed considerably greater on-field success, winning the Premiership three times and coming second in the other season.
During the same period United have also won the European Champions League and were beaten finalists on another occasion.
So why the grumbling? Most clubs would die for United's record of success over the past four seasons. Surely Glazer must be doing something right?
Maybe, maybe not. Ever since Sky transformed English soccer when it grabbed the broadcasting rights to the Premiership in 1992 there have been regular predictions that it would all end in tears. Instead, the Premier League, buoyed with billions of pounds of TV money, has become the wealthiest league in the world.
Now, after almost two decades, there are clear signs that economic reality is beginning to catch up with the Premiership.
The deadlock between joint owners George Gillett and Tom Hicks has left Liverpool financially crippled, unable to afford either new players or a stadium.
Things are even worse at Portsmouth, whose very existence is threatened by its financial problems, while West Ham's future was also looking very uncertain until this week's investment by David Sullivan and David Gold.
By comparison with what is going on at Liverpool, let alone Portsmouth or West Ham, United's problems are relatively minor.
Despite the recent parsimony in signing new players the club still lie third in the Premiership, just one point behind leaders Arsenal. Crisis? What crisis?
Still the feelings of unease among United fans refuse to disappear.
At the same time as the Glazers have been keeping a tight grip on the purse strings, bitter rivals Manchester City have been splashing the cash in the transfer market.
Adding insult to injury was the fact that the winning goal in this week's game was scored by Carlos Tevez, a former United player whom the club refused to sign on a permanent basis last season.
After suffering a series of strokes in 2006, Malcolm Glazer handed over the day-to-day running of his sports franchises to his sons Avram, Kevin, Bryan, Joel and Edward and his daughter Darcie.
With United fans now more restless than at any time since the 2005 takeover, it is vital that the bond issue is a success and Alex Ferguson gets the money he needs for new players.
Otherwise the current disquiet could turn into something far uglier.