United fans face price hikes as Glazers bid to raise cash
MANCHESTER United supporters face further ticket-price rises as the Glazer family attempt to meet their commitments to investors taking up the £500m bond issue launched this week.
Prices at Old Trafford have increased by up to 8.5pc since the Glazers bought the club in 2005, and they are likely to continue to rise in excess of inflation to support the bond issue, according to the official prospectus circulated to investors.
The prospectus highlights match-day income as a key plank of the club's income, and suggests that further rises are likely, despite 16pc of hospitality packages being unsold this season.
The bond issue, which will be presented to investors in Asia, Europe and the US in the next fortnight, marks a new phase in the Glazers' tenure that will reveal how sustainable the heavily indebted business-model they have imposed on Old Trafford really is.
When the Glazers bought United the club were debt-free and even banked a couple of million pounds in interest from their cash reserves. In the three years since, the only interest has been flowing out of the door, servicing debt liabilities that now total more than £700m and are scheduled to grow by another £30m this year, with the first repayment deadlines looming in 2013.
The bond issue is an attempt to stem this rising tide of debt and to push back the repayment dates.
The Glazers have no intention of paying off all of the club's debt. Like a buy-to-let landlord with an interest-only mortgage, their long-term goal is to sell United at a profit, settling up with the banks on their way out of Manchester.