Manchester United’s owners have amassed debts of over £1.1 billion and will have to take millions of pounds out of the club every year to pay off their loans, according to a BBC investigation.
In a programme to be screened on Tuesday, BBC’s Panorama shows that the Glazer family have £700 millions of debt tied to Manchester United.
They have also built up £388 millions of debt on mortgages for their First Allied shopping mall business in the United States and have £66 millions tied to their Tampa Bay Buccaneers NFL franchise.
The Glazers say they are comfortable with the situation and that their assets total two billion pounds.
But investment analyst Andy Green, who investigated the Glazers’ finances for Panorama, believes the Glazers have no option but to raid United’s coffers to pay off the payment in kind loans — PIKs — which total is £220 millions.
These PIKS carry a 16.25 per cent interest rate and unless any payments are made these loans will spiral to £600 million by 2017.
Green said the £500 millions United bond issue in January now allowed the Glazers to take money out of the club where as previous bank loans had not allowed them to do so.
The investigation will give impetus to the ‘green and gold’ campaign being run by some United fans against the Glazers’ ownership.
There is also a proposed takeover by a group of wealthy United fans known as the Red Knights, though no bid has materialised and the Glazers insist they have no intention of selling the club.
In March, Manchester United chief executive David Gill insisted the club’s debts were easily covered by the income.
He said then: “We have an element of the debt that is very easily serviced by the cashflows of Manchester United, we are in a sport that is getting bigger all the time and as one of the leading clubs we should benefit from that growth.”
“We believe we have a much more appropriate and flexible financial structure in place,” added the chief executive.