Old Trafford club in even more trouble than first thought.
Manchester United’s owners are £1.1bn in debt – £400m more than previously known – after borrowing extensively against their shopping mall business.
BBC Panorama has found evidence that the Glazer family’s debt levels may threaten their hold on the club.
A spokesman for the American family has said it holds more than £2bn in assets.
But the extent of the debt owed by the Glazers is likely to fuel a continuing revolt by some supporters, who oppose their ownership of the club.
Mortgage documents seen by the BBC show that the Glazers have borrowed £388m ($570m) against shopping malls and £66m ($95m) against their American National Football League team, the Tampa Bay Buccaneers.
In addition to their mortgages in the US, a portion of the Glazer family’s £700m Manchester United debt will soon see them charged interest at a rate of 16.25%.
Fans fear that, despite the club’s record of success on the pitch, the Glazers’ leveraged buy-out of United has saddled the club with debt and that may mean that there is no spare money in the future to buy a new generation of star players.
Disappointed fans have launched the “green and gold” campaign that resurrects the original team colours in protest over the Glazers’ ownership.
Their numbers have reached 158,000 and former United star David Beckham has signalled his support.
They point to the £80m sale of star striker Cristiano Ronaldo last year and note that he has not been replaced by a player of similar quality. Yet ticket prices have gone up by more than a third.
City analyst Andy Green, 37, is the disgruntled Manchester United supporter who first uncovered the extent of the Glazers’ debts.
Mr Green said: “They borrowed more money at inflated valuations right at the top of the cycle.
“These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong.”
Dave Whelan, Chairman of Wigan Athletic, told Panorama: “I don’t think anybody can be satisfied with how Manchester United are being run… they have got somewhere in the order of three-quarters of a billion pounds worth of debt. That has got to be eliminated and eliminated quickly.”
The Glazer family’s main assets are the shopping centre business in America, First Allied Corporation, along with Manchester United and the Tampa Bay Buccaneers.
First Allied is a private business and its accounts are not publicly available. But Mr Green discovered that the Glazers’ shopping mall mortgages had been bundled with other loans as Commercial Mortgage Backed Securities.
Those bundles are publicly traded and therefore require the Glazers to provide detailed information on all the mortgages, which are then publicly available in the US.
Mr Green found mortgages – confirmed by the BBC – on 63 of 64 First Allied shopping centres, totalling £388m ($570m).
Most of those were taken out with Lehman Brothers before the US investment banking giant went bankrupt, triggering the global banking crisis in 2008.
When they bought Manchester United in 2005, the Glazer family borrowed £500m and paid the remaining £272 million in cash.
Mr Green found that the Glazers had remortgaged 25 of their shopping centres in the six months before the takeover.
He believes the family borrowed against their US properties to pay for United: “At the time when they had to present a huge amount of cash over here in the UK they borrowed a huge amount of extra money in the US and publicly they didn’t buy anything else that year.”
The situation at Manchester United reflects the wider issue within the Premier League, where clubs like Liverpool and West Ham are struggling with huge debts and FA Cup finalists Portsmouth barely staved off bankruptcy.
Both the Premier League and the FA declined requests for interviews on the subject of debt in football. (BBC Sport)
There can be few who are surprised by the increase in level of debt as uncovered by Panorama and for all we know this in itself may be a very conservative estimate of just how poor shape the Glazers, and therefore Manchester United, are in.
Anyone, and that includes David Gill, who believes that the huge financial problems the Old Trafford owners have do not reflect on the Premier League club are living in a fantasy world. What the Americans have done to the club is bordering on the criminal and one can only hope that more pressure can be heaped on their shoulders by the club’s supporters and now this BBC programme.
The Glazers saw the club as a cash cow that they could milk dry by purchasing the club with bad money and the poor financial shape the rest of their companies are in is merely indicative of the manner in which these guys do business. They are very much symptomatic of the financial crisis the world as a whole found itself.
Greed is all that matters to these people. No one will argue that football clubs are businesses just like any others but it is also unarguable that to put bad businessmen in charge of one of the biggest football clubs on the planet will not end without some very serious repercussions both on and off the field.
Good luck to all those who attempt to unseat the current owners and hopefully before long they will have the decency to leave. The problem then is dealing with the after effects of their reign, which much like an oil spill can have lingering effects that are both unpalatable and unhealthy for all those who feel its effects that goes down from the managers the players and to the fans.