When Malcolm Glazer became majority
shareholder of Manchester United in 2005 the initial expense of the buyout
totalled close to £800million, the majority of this capital came in the
form of loans secured against the club’s assets initially the club incurred interest
payments of over £60million a year though the official figures show
that £272million of the buyout was direct investment from Glazer, there’s no evidence that this was
actually his own money and not as a result of further debt obtained
elsewhere there is also no evidence that the
Glazers have ever invested their own personal money into the club and to this
day Manchester United are still in seemingly
huge amounts of debt. So with all this debt how can Manchester United afford to pay
for large transfer fees and huge wages as seen in the last few years, with
reports of the Glazers draining up to £1billion out of the club over a
decade and a clearly diminished transfer spend under the latter years of Sir Alex
Ferguson’s reign, how now in the club afford to spend over
£200million on transfer fees in just three seasons. There are a couple of answers to this
question, the first is in refinancing, Manchester United have refinanced four
times since Glazer bought the club in 2005, each time the club would shift their
debts around incurring a minor increase in the total figure but with reduced
interest payments and longer debt maturation dates this is the process of making your debt
manageable. The figures as of June 2015 show that the club’s annual interest payments have shrunk to £20 million. The second answer is in revenue, In 2005, Manchester United’s total revenue was £157million in 2015 it was £395million. this is a 251% increase in total
income. You’re probably thinking that a large
majority of this is down to the increase in broadcasting revenue, but this
wouldn’t be entirely fair, broadcasting revenue increased by 225% in this period from £48million in 2005 to £108million in 2015 but the larger increase comes in the
club’s commercial revenue. In the 10 years the Glazers have been at
Manchester United, commercial revenue has increased by 458% from £43million in 2005 to $197billion in 2050, matchday revenue has also increased by around 50%. With the debt refinancable at anytime theoretically infinitely so and interest
payments currently totally no more than £20 million per year, an incoming
revenue of £397million is more than capable of meeting that many times
over. To put it bluntly Manchester United’s
debt is no longer necessarily a problem