Forbes magazine recently stated that the biggest sports franchise in the world was Manchester United. The American business magazine said that the 19 times champions of England were worth a whopping $1.84 billion, over $500 million more than the next best football team on the list (Real Madrid at $1.3 billion).
A recent survey commissioned by United said that they had 659 million registered followers world wide, almost one tenth of the global population. These are tremendous numbers for a team that has a legitimate claim to being the biggest in the world.
Their shirt deal with Aon Plc runs out at the end of next season and is worth about $31 million (£20 million) a season. Not wasting any time United have announced a new deal. From the start of the 2014-2015 season GM will pay United somewhere in the region of $60 – $70 million (£38 – £45 million) over seven years plus a one off payment of $100 million (£64 million) as an activation fee. Altogether the GM deal is worth around $600 million (£383 million) to United. Not a bad deal you might say.
All this at the same time as Manchester United are about to float stock on the American Market to raise an estimated $333 million (£212 million) in funds that many thought would be used to pay off the massive debt the Glazer’s incurred whilst buying the club seven years ago. The current debt stands at £423 million so paying off £212 million in one swoop would be a massive benefit for the club. More money could go into the running of the team if you could half the debt with one payment. It would be a genius PR manoeuvre as well and we all know the Glazer’s could do with some good faith around Old Trafford. This is definitely a great move for the Glazer family and will buy them tremendous faith with the debt collectors.
Sounds too good to be true United fans. Well unfortunately it is with news that half of the money raised from the stock sales will not go to the debt repayments but will instead go straight into the Glazer family pockets.
Since the family bought Manchester United in 2005 in a deal which hugely leveraged the future of the club United have had to pay more than £550 million in debt related fees. Over half a billion pounds in debts alone! That is an incredible number and what is even more galling for United fans is that across the city Sheikh Mansour Bin Zayed Al Nahyan of the ruling Abu Dhabi family has ploughed an estimated £800 million into the Sky Blues.
The debt is crippling this famous club and nobody can do anything about it. This is a time when everything points to United being the biggest and most famous club in the world. One that shouldn’t be shackled by crippling sums of debt and owners who will line their pockets at any given moment. They even managed to get the company DHL to sponsor their training gear. What other football team in the world has a separate sponsor for their tracksuits.
Manchester United should be a financial juggernaut able to compete with any club in any transfer market and financially attract any player in the world. Sometimes a player you are after will pick someone else. It happens, that’s life but United are continually left behind by their rivals because they don’t have to pay £45 million a year in debt payments.
The PR line from Sir Alex and Chief Executive David Gill has always been “it’s not hindering the team on the field” or the one that really annoys the fans “we are looking for value in the market”. It may not have in the past, three Champions League finals in four years speaks for itself, but if United continue to compete with one hand tied behind their back it will show.
As Roman Abramovich throws money at his new look Chelsea and Manchester City play the unusual game of biding their time in the transfer market. As Real Madrid and Barcelona maintain their place atop the European ladder. How many United fans out there think that the team as it is now will be in the Champion League final come May? How many of you think that this current United squad will be sitting atop the league at the end of this season?
United are playing catchup with these teams from last season and they are all getting stronger whereas Sir Alex has to play in the bargain basement hoping that he can find a gem. He said recently that whenever he has asked the Glazer’s for something they have always backed him. Is it not about time he asked for an explanation?
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