Man United’s debt balloons to record levels

Just as Peter Hill-Wood was talking about running Arsenal as a business, here comes a report that should peel the scales off every Man U fan’s eyes.
The Independent United Supporters Trust report will show that about 100m pounds is going annually into debt servicing the Glazers total debt of 660m pounds. The increased revenue from AIG sponsorship and TV rights is going into underwriting this debt.
At 6.69% variable interest rates and with a shaky global market ahead, there is a good chance that the interest rates could go up increasing the debt servicing costs. The added costs will most likely be passed onto the fans whose ticket prices have already shot up by 50% since the Glazers takeover. At this point Man Utd is still making a profit on the backs of the ticketholders. But many fans see this as a tipping point.
Some angry ticketholders are contemplating legal action against the club over the new Automatic Cup Scheme (which requires all season-ticket holders to pay for all cup games — whether they want to go or not) and the unfair way it was introduced.
I really don’t see how this is all going to work out unless the debt is restructured to lower interest payments but the market is quite volatile and the Glazers recent attempt to restructure through a consortium of banks failed. The clear solution is to find a richer and more solvent buyer to assume the debt.

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One comment on “Man United’s debt balloons to record levels
  1. I’m not sure, but it seems to me that Man U is like the Yankees in the states. If the debt is spread out over time, it could work out. The fans will be ok. This is just initial reaction. But it sounds like a new owner would work well in this situation.

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