United in frantic hunt for cash
MANCHESTER United are accustomed to selling themselves to the world. This week their globe-trotting policy is being taken to a new extreme in the form of a series of 'road shows' across three continents, after the Glazer family settled on a £500m bond issue to safeguard their much-criticised ownership of the club.
Yesterday, a United delegation held road shows in Hong Kong and Singapore in an attempt to woo various financial institutions and attract the investment that would reduce the burden of the club's overall debts, last recorded at £699m.
Today and tomorrow, they return to Europe and David Gill, the chief executive, will host sales pitches in London, Paris, Frankfurt and Zurich.
From there they will fly to the United States, where the Glazers, on home soil, will extol the benefits of investing in the world's most profitable but debt-ridden football club.
If it sounds frantic, or indeed desperate, it is certainly an approach that throws up as many questions as answers.
United announced a record turnover yesterday of £278.5m and pre-tax profits of £48.2m for the financial year ending June 30, 2009, but it took the £80m sale of Cristiano Ronaldo to Real Madrid to convert a loss into a gain
And, with an unpredictable financial climate ahead, the Glazers have decided that a bond -- whereby the debts are secured against money borrowed from investors, who would in turn expect a considerable return on their investment when it matures in 2017 -- is the best way to secure their much-maligned regime at Old Trafford.
The announcement prompted an angry response from the Manchester United Supporters Trust, which has been resolute in its anti-Glazer stance since the family bought the club in 2005.
"Now is the time for the Glazers to go," said Duncan Drasdo, the trust's chief executive. "This bond issue is just rearranging the deck-chairs and still leaves the club with huge debts, which they expect supporters to continue to fund.
"The day the Glazers put the club up for sale, you can expect celebration on the streets of Manchester. Most supporters have had enough.
"Under their ownership, the club has become liable for more than £260m in interest-payments alone and the latest trading statement would have shown a substantial loss were it not for the sale of Ronaldo."
In the business plan that accompanied the Glazers' refinancing of the club's debts in 2006, it was spelt out that a net sum of £25m would be available each year for Alex Ferguson to strengthen his squad and that if "there is a need to acquire a superstar, there is an incremental £25m capital spend bucket available to the club".
However, having sold Ronaldo last June and lost Carlos Tevez to Manchester City, United responded by signing Antonio Valencia from Wigan Athletic for £17m and making a series of bargain-basement signings -- Gabriel Obertan, Mame Biram Diouf and Michael Owen -- to augment their attack.
Ferguson insists that it was his decision to avoid further spending, saying that there was "no value" to be found in the transfer market last summer or during this month's transfer window.
He has cited on several occasions that United made a club-record bid in excess of £30m to sign Karim Benzema from Lyons, but the France forward joined Real for £35m, with his wage demands and other associated costs proving beyond the 'value' set by the Old Trafford manager.
United's financial performance continues to exceed the Glazers' expectations, but the cost of running the club is more than they accounted for.
Their projected sums in 2006 accounted for a turnover of £234.2m for the past financial year (actual figure £278.5m), but they severely underestimated the running costs at £141.3m.
United's wage bill alone for the past financial year is understood to be £122m.
Even in a year when they have sold Ronaldo for a world record price without spending crazy money replacing him, the Glazers have found themselves feeling the pinch. (© The Times, London)