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Fergie's bond is a bind for everybody else

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Matt Slater | 15:26 UK time, Friday, 8 January 2010

While Sir Alex Ferguson gets on with the job of getting his players ready to face Birmingham City's challenge on Saturday (frozen turnstiles permitting), far more significant preparations are being made elsewhere in the Manchester United empire.

United's key fixtures this month will not be at St Andrew's, the City of Manchester Stadium, the Emirates or even Old Trafford, no matter what clash-of-civilizations hyperbole the footie scribes attribute to those Manchester derbies.

No, the real action will take place over breakfast at Claridge's or at a long lunch at a City institution (the London kind, not the Gallagher brothers) - somewhere private, somewhere a dozen business acquaintances can eat, drink and discuss the sale of £600m-worth debt.

The type of players who replace Giggs, Neville and Scholes, how much of the Ronaldo windfall can be reinvested, what Fergie does about the minted arrivistes at Eastlands and how he closes the skills gap to Barca, all this and more will be decided by blokes (for the most part) in suits over the next week or so. Welcome to British football in 2010.

OK, fair cop, I've been guilty of a little bit of hyperbole there myself. Sorry, I wanted to make sure you got past the "Read the rest of this entry" hump. But last weekend's report that Manchester United's owners are considering a bond issue to refinance debts believed to total £700m was, in my opinion, the most interesting football story for months.

Why? Because it gets to the heart of what modern British football (the Premier League, in particular) is about and where it is going.

I will leave the intricacies of the bond market to others more qualified than me but if you want a primer you could do a lot worse than this guide I found on a United fans' site or Robert Peston's analysis on Tuesday.

For those of you still with me, here's my take (and please accept my apologies for any Horrible Histories-like liberties with dates or numbers).

Bryan Glazer and his brothers Avram and Joel at Old TraffordBryan Glazer and his brothers Avram and Joel are regular visitors to Old Trafford; father Malcolm rarely comes

The Glazer family bought United in 2005. The completion of that deal came at the end of a lengthy process that saw the shy and retiring Americans borrow an awful lot of money from lots of different lenders.

A year later, they refinanced all of this borrowing and split it between themselves and club. But, in a crafty move popular at the time, the interest on this debt would be paid by the club.

Some stunt, hey? Get a 100% mortgage to buy a successful business and then use the business's profits to meet your repayments. Brilliant, my loan application to purchase Claridge's is in the post. And I will never pay for breakfast again.

But not everybody admired their chutzpah. Some, including a large section of the Old Trafford faithful, wondered how transforming the world's richest football club into the world's most indebted football club could possibly be a good thing.

And they had a point, particularly as the list of IOU-holders includes three New York hedge funds charging the kind of interest that is currently causing Joe McIntyre so much grief on Coronation Street. These loans account for only a quarter of the total debt but they have skewed an otherwise decent mortgage deal into the financial equivalent of a ball and chain.

Which brings us back to what those City chaps will be talking about over choice cuts of Argentine beef.

Give or take a million quid or two, Manchester United's proven ability to earn pots of cash is being cancelled out by the debt burden placed upon it by its American owners. And that burden is growing.

The main culprit here is the ball-breaking vig (as Goodfellas' Morrie the wigmaker might put it) on those hedge fund loans. They have pushed up the average annual interest rate for the total debt to close to 10%.

Hold on minute, didn't capitalism almost come to an end last year? Aren't interest rates at historic lows? Surely only an idiot or somebody completely desperate would be paying double-figures interest on anything right now? Yes, yes and yes.

The "Man U bond" is simply the corporate finance equivalent of those "consolidate your debts and build a conservatory" offers you see during the ad breaks in Countdown. But instead of Ocean Finance, the Glazers have asked JP Morgan and Deutsche Bank to repackage their loans.

And where is the best place for large businesses to borrow lots of money right now (apart from the bank accounts of mega-rich Arabs and Russians)? That will be the bond market.

Right, Peston stuff out of the way, what does this actually mean for Fergie, Manchester United, the Premier League and British football in general?

Sir Alex FergusonSir Alex Ferguson's side has struggled for consistency this season and recent recruits have not impressed

For Fergie, it should mean he gets to spend a bit more money. With an annual interest bill of £70m, each percentage point the suits can knock off that 10% puts £7m back on United's profits. Those in the know tell me 8% is achievable (with some caveats I am happy to discuss below). Another Nani, then. OK, not him, but somebody in that bracket.

The ability to replenish the squad is vital for Manchester United's prospects in more ways than one. It won't just help them win games now, it keeps the whole "business model" on track. The assets the Glazers have put up to secure all that borrowing are the ground, the players and all the other bits that constitute a football club (apart from its soul, the fans own that). But most of all, the Glazers are trading on United's continuing "success", the ability to pack them in at Old Trafford, earn prize money and sell shirts around the globe.

I should probably make something clear at this stage. I am not predicting imminent doom for Manchester United or even the Glazers, far from it. A bond issue makes sense and I still have Fergie's men as marginal favourites for a fourth straight title.

What does concern me about a Man U bond is what it says about the Premier League as a fair and genuine competition, and that, in turn, makes me deeply worried about British football's future.

United are one of only two or three clubs in Britain that could even consider pulling this off. And they are only doing it in order to keep pace in a market that follows no ordinary rules of business or common sense (wages to turnover ratio, anybody?!?).

Hats off to the Glazers if they can borrow £600m in this economic climate but what must the rest of football think? "Bugger," is my guess, "I suppose we're going to have keep spending money we haven't really got as well."

Every expert I spoke to about this story said pretty much the same thing: "Yeah, the bond will work, depending on price, but I won't touch it - football finance is a fad, it makes no sense whatsoever and the whole thing is heading for a crash."

The truth of it is that there are very few "business models" in British football (Arsenal's springs to mind as an honourable exception). Proper businesses are not based on endless supplies of free money, whether that money comes from old-fashioned banks, clever-clever hedge funds, Arab sheikhs or Russian oligarchs. There is no such thing as free money. It always runs out or gets bored and goes home in the end.

United will be OK. They're a global brand now, too big to fail. I fear for Portsmouth, West Ham, Hull City, Crystal Palace, Stockport, Southend, Notts County, Accrington,'s an age of austerity, alright.

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  • Comment number 1.

    Good blog. Much better than Peston's being built on the bond issue, a real new development, rather than losing to Leeds United. There are, believe it or not, some misguided United fans who saw the Glazers management as a good thing. But for Ferguson's genius and maybe some good luck along the way we would be neck deep in the mire rather than just wading through it with the Glazers debts perched on our backs.

  • Comment number 2.

    Too big to fail? Didn't they say that about Lehman Brothers?

  • Comment number 3.

    HI Matt. Interesting blog. Considering the amounts of money the arab sheiks or the asian billionaires spend on buying clubs, how come nobody has come in and made an offer for man u? Surely, as one of the biggest and most marketable brands in the world, if they bought the club and paid back the debts so as not to have to pay interest, they'd soon be profitable again.

  • Comment number 4.

    Sergio - I think that is likely to happen via the bond issue. I think the Glazers have been an awful feature of the British game. That tweedle dum and tweedle dee used it as the model for the Liverpool takeover should set alarm bells going at Liverpool.

  • Comment number 5.

    Excellent... you just put into words everything I have been wondering about regarding football’s seeming financial ‘miracle act’, but not having the noggins to figure it out I was beginning to think that; “Hey, there MUST be free money out there after all!!!!”.

    My only question is: when this huge pack of cards eventually folds will this be a good thing for English football, or a catastrophe of unimaginable proportions?

    So, now that you have set a convincing explanation as to where we are with our modern fancy game Matt... where do you see this all headed?

    And, if you can spare the time... how do you see this impeding collapse effecting clubs like, oh say, Preston North End? I realise we are just another small (tiny, infinitesimal) little fish trying to swim in the same pond as the Multinational United’s of this world... but if you add us all up I’d say that the vast majority of English football fans don’t actually support one of the Big Four (five, six?) but their local boys a few miles from their home. What’s in store for us?

  • Comment number 6.

    Matt - I think its a bit much of you to lay the 'questionable business model' that exists within the Premier League, at United's door (or the Glazier's for that matter). The 'crazy goings-on' in the top flight of English Football had been occuring for years before any the current 'take overs' were in place.
    The Galzier's have responded to a business opportunity that presented itself; because even though it helped to create it, the previous United Board did'nt know how to manage a multi-million world wide brand, against whose assets further millions could be raised.
    As you point out the brand of Man Utd is worth billions, not millions, and as an on-going profitable enterprise it will not go under because of debt.

  • Comment number 7.

    You would get debt when you spend this amount of money-

    Berbatov-30 million
    Rooney-30 million
    Ronaldo-13 million
    Anderson/Nani-30 million
    Ferdinand-30 million
    Carrick-20 million
    Hargreaves-20 million
    Veron-30 million
    Saha-10 million

    But of course, SAF is a great manager... with limited resources...because when things get bad he doesn't just throw money at it...

    whereas the likes of Morinho win the CL with Porto...

  • Comment number 8.

    Paul - I agree. Part of me wants us to go into administration just so that we can get rid of the parasytes. I would take a couple of relegations just to clear their and their like's thieving claws out of the game for good. They are sucking our money (the fans') into their bank accounts and for no added value. But as I say the daft Liverpool board didn't bat an eyelid when welcoming Gillette and Hick to take over their club. At least we burnt an effigy or two.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    Finally, somebody is picking up the biggest issue facing football - thank you Matt.
    I posted a 606 article on the state of the game before Christmas -
    It's outrageous that new owners can plunge a club into debt as part of their takeover, for which they don't have the cash upfront.
    No football club should allowed to over-stretch themselves so that they are at real risk of folding.
    The so-called 'fit and proper persons test' that the authorities have for club ownership are laughable. How can the guy at Portsmouth takeover, but days after doing so be on the look out for another investor because he doesn't have the resources himself? He passed the league's own test! Nonsense.

  • Comment number 11.

    U D- Personally, I worry about what happens after the bubble bursts, as it has to because nothing can grow continually. Will there be anything left to save? That's the whole of the game, not just any particular club. The true greats of football, Shankly, Paisley, Busby, Stein et al are probably spinning in their graves at what football has become.

  • Comment number 12.

    Tick tock tick tock tick tock tick tock but for how much longer United?
    Most Man United fans are hiding behind the real facts with thoughts of "it will never happen to us" ha we shall see! and no club is too big for them to go bust altogether.
    In my opinion for them to avoid a footballing financial catrastrophy they should ease off trying to win trophies every season or trying to keep up with the Jone'ses! take a back seat on the media front rebuild the whole structure stop making extortionate signings by putting ephasis on their young players,accept that they may have to take a step backwards first because their fan base will ensure financial footing during a rehabilitation period but I think they have too much pride to step aside and begin a massive transition but for me it is their only hope.
    Should MUFC continue to keep on lending because of their assets then those assets will eventually disappear Mr Glazer and his sons will sell their stadium,start selling their best players and we all know the consequences of that scenario dont we? However if they ease off trying to maintain their position as one of our top clubs by borrowing more money they will simply end up in the Brown stuff -THERE IS NO QUESTION ABOUT THAT so the fickle fans of United need to recognise and understand this stark warning and accept second or third best for a few years otherwise they will reach ROCK BOTTOM --personally I COULDN'T CARE LESS WHAT HAPPENS TO THEM!

  • Comment number 13.

    This is the first Matt Slater blog I have read and I must say I hope he writes about football more often. Very insightful and enjoyable read, definitely preferably to McNulty and Minshull whose efforts are commendable but often mediocre.

  • Comment number 14.

    Far be it from me to defend the indefensable but I have a bit more of an interest here than the armchair fans who never venture much further than their armchairs to watch their football. My season ticket has increased from £26 a game to £36 a game since the Glazers took control. I have been watching United since 1972 and will probaly continue to do so 'cos like most fans I can be milked mercilessly by the unscrupulous. However two points to make 1) United's conversion from football club to global brand started with Martin Edwards over 15 years ago. The man inherited the club from his father and tried to flog it least three times,to amongst others Robert Maxwell, Micheal Knighton and Sky before floating it publically. He made £10's millions over a period of time selling his shareholding off in small lots. Exploiting Manchester United didnt start with the Glazers ! 2) When they took over we were well off the pace, lagging behind both Chelsea and Arsenal on the field. Since then with their support SAF has put together another (his 4th?) title winning squad and we won 3 Consequtive EPL's and the CL and he is now building a 5th, United have also avoided (so far) the embarassing meltdown that foreign ownership has bought to Liverpool and Portsmouth. Are there at least 19 other wannabe United clubs and their fans in the PL that would happily swap places with us ? Somehow I think so...

  • Comment number 15.

    The whole "model" (or lack of) of MU finance is based on a steady team performance and hence profit. The problem is no one can be sure that MU will dominate EPL in the future like the past 20 years. This is especially worrying when SAF retires. A period of unstable performance after SAF is possible, and like not qualify UCL can happen, which will greatly affect income. When this comes, the financial problem might drag the club deep down.

    As a MU fan this is much worrying that not winning any silverware this season.

  • Comment number 16.

    Matt you need to write more blogs!! The best I have read on this site for a long time. As a United fan I don't subscribe to the 'Too big to go down' Our finances have me almost paralyzed with fear! Hopefully Matt you can be persuaded to write more on football I don't know if you want to or not but a very good blog.

  • Comment number 17.

    All seems to be fair points except for:

    "Hold on minute, didn't capitalism almost come to an end last year? Aren't interest rates at historic lows? Surely only an idiot or somebody completely desperate would be paying double-figures interest on anything right now? Yes, yes and yes."

    What a complete load of nonsense. As someone who works for a commercial bank (one that didn't need to borrow money from the government) it is common knowledge that most interest rates for business borrowing are in double figures at the moment, due to the (correctly) percieved risk of lending to businesses, especially those in leisure, and the high rate of inter-bank borrowing.

  • Comment number 18.

    One has to remember the Glazers are business people and football just so happened to be the business or commodity they own.

    They action is to keep their business as a going concern and will do whatever it needs to keep it that way.

    No doubt the sale of Ronaldo injected a huge amount of needed $$$$$$$$$$$$$$ so they will be financialy safe for a while yet.

  • Comment number 19.


    bit overly aggressive that. I'm guessing you must be a city fan. They tend to get a bit heated when talking about their more celebrated rivals.

    People laughed at the supporters clubs and fans who demonstrated during the takeover and now it seems that was all justified. I do get dismayed how many rival fans have turned into financial experts over night when it comes to utd's finances. The truth is, unless you are a club insider, then the true severity of the finances is unknown. As a season ticket holder I'm worried that the first hit will be the fans. Our ticket prices are very reasonable compared with the rest of the top 4 but for how long?

    I've been spoilt with success as a utd fan but am kind of looking forward to a drought in a funny way. It'll certainly rid us of any hangers on who just go to ot for the camera shots and megastore. In an ideal world I'd love us to adopt a model similar to barca. The club always bangs on about how well supported we are so we could easily generate enough money to take over. We'd need a better youth system tho. Of the barca team that played Madrid, 7 were youth products.

    I know people like ted couldn't care less what happens to us but there will be some fans of football that realise a institution like utd would be missed in the top flight. Rather than having a premier league full of rugby towns and half filled stadiums.

  • Comment number 20.

    "Too big to fail"? When have we heard that before?

  • Comment number 21.


  • Comment number 22.

    Matt, excellent blog-thank you for this.
    I would like to know, who are the people that are in charge of the 'fit and proper' requirements? How come they allow well run clubs to be bought and then saddled with such ridiculous and unsustainable levels of debt?
    Debt that the fans end up having to pay off, through overpriced shirts and tickets?
    How much money do these arbiters of the game get paid/pay themselves?

    As you rightly say the soul of the club belongs to the fans, but everything else seems to get put in hock by these vainglorious parasites from Russia, from the middle east, from America.

    Who is in charge of looking after OUR game?

    It's all very well having '2good 2bad' slots on MOTD, but what about some REAL journalism, some real questions about the sustainability of our game.

    I support Arsenal and I want to take my kids to watch us vs Chelsea, Man U, Liverpool...not just tell them stories about 'how it used to be'

    Our game needs a saviour off the pitch, instead we've got a bunch of self congratulatory back slappers, sipping wine and eating those famous prawn sandwiches while the game we all love slips into a financially bankrupt coma...


  • Comment number 23.

    "I will leave the intricacies of the bond market to others more qualified than me"

    Are you somebody who likes to take heed of their own advice?

    In that case I would stick to analysing sport instead of economics.

    I think what you were trying to get at, with a bit of scare-mongering in between, is that this 'business model' works with brands such as United's (as they have the revenue to justify the lending) and will sink Brands that try to copy it who don't have the required justification i.e aren't big enough to justify their output.

    Ask anybody who even remotely knows what they're talking about (I'm talking investment bankers and not armchair accountants)and they will tell you that this is the model that most, if not all, massive companies are designed around. I mean where do you think the money comes from in the first place? Do you really think that this capitalist society, we rely upon to provide us with the lifestyles we have become accustomed to, was created by very rich men with top hats and canes throwing money around? No, companies emerged from high risk strategies based around multiple lending opportunities. I mean it may surprise you to know that the very model the Glaziers have been using is the same one our own countries(and most western nations)economies are based around. Was it not Gordon Brown who banked upon selling UK national bonds to the rest of the world in order to refinance our own flagging economy? Or at that time were you still reading the back pages waiting for the day you could spill your financial knowledge upon the world?

    This is the situation at United and I'll lay it out in laymans terms:

    United are a massive brand, probably one of the biggest.

    They were floated on the stock market by Mr Edwards (probably to make himself money, but at the end of the day that's what business men do, if you don't like it sorry but your living in the wrong society. Go join a commune somewhere.)

    The Glaziers bought up the majority of shares, using (as like nearly all hostile takeovers) borrowed money from the worlds biggest banks. This is how the banks became THE BANKS in the first place, they gave money to people who wanted to invest in or create massive businesses.

    At the time the finance was fine given the cimate, i.e lots of people were making lots of money and everything was hunky dorey.

    Then people who borrowed more than they could pay back started to stop paying it back (this was mostly due to american banks giving money to people for homes far outside their means. British banks who had been given money by american banks were then asked for more money. The system was starting to crumble.)

    But the big companies were ok. There was no need to ask for all the lending back because the bankers knew they would be ok in the long run. It was short sighted investment in start ups that had really screwed the system.

    So the Glaziers premiums started to go up. Understandably the banks needed to recoup their losses.

    So like all big businesses United needed to find away of refinancing their debts and were offered a better solution. This model works as in the long run the business can afford to pay back the interest.

    The trouble is that smaller brands will try, and fail, to copy this model and that's where the problem starts all over again.

    BUT and that's a big but. What your forgetting is that the lenders are becoming much more strict so smaller brands won't get the finance in the 1st place. Do you really think that very rich people are going to risk their money on something that has been tried and failed?

    Again...stick to what you know.

  • Comment number 24.

    This is the first blog from Matt that I have read, whilst on the one hand it is admirable of him to highlight his concerns about the potential of a Global Brand getting into serious financial trouble if a few greedly businessmen are allowed to milk MUFC, it would be wrong of him to sound alarmist. Yes .yes.. Lehman Bros, Citi Corp etc, but they were totally unregulated and decision making lay in the hand of one person. MUFC has a solid track record of success (15years), we have invested wisely and reaped returns.SAF has his feet firmly on the ground and knows the club's realistic goals. MUFC will neither implode or collapse as wished by some of our Merseyside wellwishers or those in West London, simply because the Glazers, unlike Abrohmowich or Hicks and Gillettes do not interfere in the running of the football club. Since the Glazers took control, MUFC have won 3 Premierships,1 Champions League,Carling Cups and FA Cups, if you compare that with ...... yes you got it. QED.

  • Comment number 25.

    HMMMMMMM i have to say as someone who does not have the knowledge of some who have posted on this blog with regards to knowledge of the way in which the financial structures of football clubs work i did find the article interesting.

    The main worry for me is when foreign owners get bored and they will eventually-how are the clubs going to be run-the likes of city and chelsea may be debt free as of now but when their owners/financiers pull out of these clubs its going to be horrific-no money equals fire sales to keep the club afloat-my message to these fans is dont gloat anout uniteds/liverpools situation too much

    Football clubs in England especially are definatley not living within their means at the moment-the idea that clubs have to stay in the premeir league just to have enough money to pay for wages of players and ataff alone is frightening-look at leeds and norwich even southampton-their the best examples of what can happen when clubs spend money they dont have.

    I guess what I see as being the ultimte solution is salary caps/owners not allowed to buy clubs whilst having a) existing debts and b)after buying the clubs using it to finance thier debts/fans also allowed to have a greater say in how the clubs are run.

    These alone would contribute a greater generated wealth within football clubs and thier wouldnt be the worry they'd go the wall-look at Burnley-whilst they'd love to stay up they dont spend money they dont have and also have a salary cap so players cant extortionate money from the club-again sound business acumen-the other thing i suppose as well is this-clubs were started from scratch and if the worst scenario came about they could be again-but they would never reach the giddy heights they are at just now.

  • Comment number 26.

    Seems crazy. My club got deducted 17 points last season for going into administration and held on by the skin of their teeth to keep in the English League, yet they are actually financially better off than Manchester United.

    The Bundesliga model is something that keeps the future of clubs alive, and keeps a level playing field. I understand its not immediately possible, but I really think the FA should step in with certain profitability quotas to make sure clubs can survive and to keep the (waning) integrity of the English game.

    Arsenal may not have won silverware for a few seasons, but at least they are competing within their means, and playing beautiful football to boot.

  • Comment number 27.

    Evening all, thanks for reading and posting comments, much appreciated. I'll try to answer as many as I can, as fully as I can, before the Ten O'Clock News finishes.

    United Dreamer (1) - Agreed, losing a cup game to a decent and highly motivated oppo is not the end of the world. But I don't think Peston went overboard on that, he just used that as a way in to what he really wanted to talk about, Man U's debt burden. Big Arsenal fan, by the way! Other journalists, however, did leap on the Leeds defeat and either the bond issue story or Man City's record but seemingly inconsequential losses to make overblown statements about Man Utd's imminent decline. Sorry to disappoint the Anyone But United Brigade but I just don't see the evidence for that.

    Paul (2) - Tongue was slightly in cheek but I do believe the strength of Man Utd's "global brand" (and it goes back much further than last 15 years, phil and straightdive) AND the loyalty of its huge support in THIS country will see them through any bumps in the road ahead.

    Sergio Lahaye (3) - Not sure, I guess it would depend on 2 closely-related things 1) price and 2) the Glazers' willingness to sell or hold. Don't forget it took Malcolm Glazer 2 years and almost £800m to take Man U private. What's the club worth now? How much "bigger" is the EPL now?

    United Dreamer (4) - Excellent point. That would certainly put football's flimsly ownership rules to the test, wouldn't it? And you're right about the Hicks/Gillett disaster at Liverpool, a deal done towards the end of the leveraged buy-out boom and on terrible terms.

    PPPNNNEEE (5) - Where's football going? Hmmm. Well, the big boys will be OK. Just like every other sector of the economy, when the good times end there is a flight to quality ie safe bets. I can also see an NFL-style European Super League coming back as the big idea. It's what the big clubs wanted a decade or so ago before Uefa ramped up the Champs League and threw money at them. Either that or a complete unravelling of the collective bargaining of TV rights. That must be what the more serious overseas sports investors are thinking about and it would solve Man Utd's financial problems at a stroke.

    oncearedalwaysared (6) - I don't think I was "blaming" Man Utd for football's voodoo economics, I certainly didn't mean to. You're right, the numbers haven't stacked up for decades. Professional football has never been a typical or even particularly efficient investment, all that has changed in recent years is the scale. But the Glazers were the first to pull the leveraged buy-out trick in British football, certainly to that extent.

    messien (7) - Can I detect a hint of sarcasm in your voice? What can I add to that? Is Fergie a great manager? Yes - plenty of guys have been given lots of money to spend, not many (if any) have managed to remain at the top as long as he has. Sustained sporting success is not a particularly British trait. I could also point out that he did his "Mourinho at Porto" turn at Aberdeen. But is he a bit, how can I put this, over-praised at times? Does he make mistakes?? Should have been honoured with a knighthood so soon after winning his first Champions League title (with the world's richest club) when the likes of Stein, Paisley and Clough weren't recognised in that way??? Hmmmmm.....

    ForestJedi (10) - You're right, fit and proper person test and the entire EPL/FA regulations book is totally inadequate. What has been allowed to happen at Portsmouth, and elsewhere (Chester, Chesterfield, Notts County, Darlington...I could go on), is nothing short of disgraceful and can only detract from the shiny, successful face the EPL likes to show to the world. It also makes a mockery of the league's competitiveness. Pompey's cavalier approach to managing its resources is another form of cheating. They had the sixth highest wage bill in 2008!!! I'm going to return to the Pompey fiasco next week.

    Right, that's enough for now. The National Lottery programme is on, a suitable metaphor for the subject we're discussing.

    I'll come back to answer as many as I can tomorrow morning, particularly Jamie's contribution (24). Looking forward to that but it can keep.

  • Comment number 28.

    You have to wonder how much the previous administration cared for the club to allow a regime with such dubious financing to take over the club.

  • Comment number 29.

    Excellent article Matt
    As a Blackbun Rovers supporter, I am constantly reminded that we "bought" the Premiership in'95 (as opposed to those clubs that won it how?)
    Our club was lucky to have the unqualified support of a rich benefactor, who was also a true fan, and had no other motivation than seeing his beloved club succeed. Those were heady, never to be repeated days.
    As a football fan, I am greatly concerned for our game in this country, at all levels. What has not been mentioned so far is the ability of the governing bodies to "move the goalposts"(sorry). Platini for one is waiting in the wings to clip the wings of the mighty Premiership clubs. All the wealth and talent that money can buy will count for nought if they come and take their ball back because you are a bully!
    What use are all the "Business Models" and "Corporate Strategies" going to be then, these Clubs living on the high wire have more to worry about than the odd unexpected Cup exit.

  • Comment number 30.

    As a liverpool fan it doesn't annoy me that Hicks and Gillett act in the way they do towards investment, i'm just disappointed that they were allowed to take over in the first place(and I'm sure its the same with the utd fans with the Glazers). I'm certain all owners want to make money, but to blatantly do it at the expense of the club is frustrating to see.

  • Comment number 31.

    ***They're a global brand now, too big to fail***

    That's what General Motors thought.

  • Comment number 32.

    As a United fan, i've been becoming more and more disillusioned with the club, and that feeling was set in motion well before the Glazers took over.

    I've only been to a handful of games since the 06/07 season because I have simply become priced out, and when I have gone since then i've very rarely enjoyed the match day experience, mainly due to the inflated costs, the fascist stewarding and all of the daytrippers bulging megastore bags blocking the path between you and your seat...

    ...which brings me to my main point, brace yourselves... Would it be the end of the world if the debt eventually took the club under and we wound up in League 2 or even the Conference having to rebuild from scratch? From a purely fan based (and selfish) point of view, i'd be able to afford to go to the matches, I might even have enough spare cash to make the trip to Leyton Orient in midweek... and i'm sure for the first time in a very very long time i'd feel like I belonged at Old Trafford again... now i'm sure i can't be the only United fan who has had this seemingly quite dirty thought, but like me (until now, hidden behind this faceless medium) they have thought it far too taboo to actively debate...

    ...i'm sure the fans at FCUM would be willing to talk about it though.

  • Comment number 33.

    Jamie: "Ask anybody who even remotely knows what they're talking about (I'm talking investment bankers and not armchair accountants)and they will tell you that..."

    Haha, those same bankers who sold securities they knew had no value and who often directly contributed to the bubble while hauling million and millions to their own pockets, or mansions?'

    Yeah, they sure know what they're talking about!

  • Comment number 34.

    Good points made by all and a good blog. It is though worth considering this. Whilst we are saddled with a hugely uncomfortable amount of debt, prior to it we were the worlds richest club, turning in Gooner-like Net. Technically this hasn't changed; our owners, the Glazers are 'simply' financing it differently.

    I don't agree with this method. The key to operating pre and post Glazer though is success. And to a greater or lesser extent you have to buy success, in football terms at least. And it's no coincidence that SAF has had funds to do this - and importantly, has used them wisely.

    Wether you agree with particular players or not, Nani, Anderson, Tevez and latterly Berbatov have all played their part. I would give my right arm for Giggs, Scholes et al again, but I can't see that happening for another generation.

    Instead, we need to keep pace with the Wenger model (as much as it pains me to say.

  • Comment number 35.

    As an Arsenal fan I can't help but feel a sense of quizzical detachment from all this fiscal doom and gloom. However I am of course aware that this comment is reason enough in itself for Stan to give me the finger and promptly ruin my beloved Gunners. Good blog.
    Does make you wonder why there aren't more British owners of big clubs though doesn't it...?

  • Comment number 36.

    The TV rights changed the game forever, the premier league became really a global commodity. Instead of clubs relying on gate money, souvenirs etc there was suddenly this big pool of money for everyone and a decent shirt sponsor too boot. Leeds were the dire warning to anyone who thought you could invest your way to the top of the pile but investing on borrowed money. At this stage United were in a seemingly unassailable position but enter Abramovich and all of a sudden the whole game changed. He bought Chelsea two titles and the whole game was changing, all of a sudden 30 or 40 million seemed insignificant. Now Utd who are operating on a different plane to Chelsea & Man C are being effectively pushed out although it is to Fergusons credit (and I don't like him much) that he has kept them competing. The lower division clubs can no (almost) longer sell a player to a premiership club like they used to and are suffering badly. Everyone is on a treadmill peddling for all they are worth and no one knows the outcome except the obvious one that the Abramovich's & Sultans become bored and walk away.

  • Comment number 37.

    If one bought a corner shop you finance the purchase with a mortgage. The profits of the shop are yours and you decide whether to pay interest or reduce loan but that decision is yours . To run your shop efficiently you employ staff and perhaps reinvest in new stock(players) but that is your decision. As long as the assets of the shop are greater than your debts you are ok . Why should your customers (supporters) demand you pay back your loans as long as the business is successful in making money. It seems that the customers want you to invest more in stock but grumble if you put your prices up. If the customers are so sure they are right why do they not buy shares in the shop (£1billion !) and then they can run it their way .

  • Comment number 38.

    Good blog Matt and slightly more readable than Robert Pestons. There are a lot of hysterical contributions on here but Jamies is the most considered. The behaviour of the Glazers is not unusual getting as much leverage as you can when you refinance is not new it is what every business would do. The Glazers long term aim was always to appreciate the asset and not about milking the profits. They bought the asset when it was undervalued and it is still good value at £600 million that is why they will be able to refinance it.

    Fergies freedom comes from the fact that they are not fans they are business people all they are interested in is the continued growth of the brand which is driven by success, youth and attacking football. This is why I have limited concerns about United's continued success. The Glazers greatest vulnerability comes from fergie leaving this is their only balancing act - how much does he need to continue success, and be kept happy. This adds a further complication because it seems that he is unwilling to pay over the odds for players, if he thinks the market is overpriced (that doe not mean he is not aversed to spending too much on the wrong player everyone makes mistakes).

    So all you manu haters I predict continued success for united because ultimately the Glazers on an undervalued asset which many a Dubai playboy would love to own. Uniteds two main threats are who after fergie and when a Dubai playboy does eventually buy it will he interfere in the same way as others have.

  • Comment number 39.

    I agree with pretty much all the points made in this article. It's a good outline of how football, not just English, has become more and more money orientated over the years, which has led to many clubs failing to control their financial prospects. Without question the better players of world football will have their heads turned by the offer of a huge wage, and this is what has led to such vast sums of money being thrown around in my opinion, that and the ridiculous amounts which clubs are negotiating for transfer fees. The only way I can personally see this from slowing down, and eventually preventing the spiral out of control, is for a governing body to take over and implement financial boundaries. I'm not over-run with precise details of the way it works, but the NBA basketball league in the USA has a system of this kind, giving a basic salary cap to each team, which can eventually be increased by performance success. Therefore no matter how much money some arab decides to throw at a club, it makes no difference as far as how much that team can spend on players. The wage cap can only be increased by success over time, which is the way it should be!

  • Comment number 40.

    The simple truth is that its a pure monopoly - the fans of Man U are beholden to pay the interest. The labour government is far too ignorant to know that these businessmen snap up monopolies (the utilities come to mind) knowing they are onto a gravy train fully indemnified by the consumers. But there are people in the EU who are alert, hence the new rules about shareholding and debt being proposed by UEFA. If a similar opportunity arose in China the Glazers would out and not even know how to spellOld Trafford in five years time !!

  • Comment number 41.

    For those of you worried what to watch when the football bubble in the UK bursts, I recommend rugby union. As a spectator sport it is improving by leaps and bounds (literally), and there are still some Brits playing the game at the top level.
    The football game can probably be offshored to Africa (where games don't have to be cancelled due to the weater quite so often (machine gun attacks are something else)), and where corruption is reportedly rife enough to justify the kind of financiers currently exploiting the loyalty of real football fans for their own selfish gain.
    The era of owners combining their own benevolence with the inspiring loyalty of true fans is unfortuately a thing of the past

  • Comment number 42.

    By the way, if you want to understand how far the rot goes in the game, check out the palace that Sepp Blatter has built for FIFA in Zürich, and chzeck out the cars he drives (not to mention the salary he earns). He and Platini may pontificate about the need for the game to be pure etc. etc., but when it comes to money and luxury, there is nothing really to separate them from financiers ruining the game. I don't see any UEFA money providing a safety net for clubs in need. The running costs of Sepp's palace could probably put many clubs on a sound financial footing (not to mention his environment polluting petrol bill)

  • Comment number 43.

    First time in a long time I've said this, but Good Blog, and you aren't even one of the main footy guys! Hopeefully if the BBC has any sense they'll let you do some more of them!

    The hardest line to read though was this

    "The truth of it is that there are very few "business models" in British football (Arsenal's springs to mind as an honourable exception)."

    There are a few other clubs, Such as Everton who won't millstone themselves to stay up but every year makes them more reliant on getting a good player that no-one else spotted. Utd were once one of those clubs, our massive stadium was expaned on the back of title wins to expand our match day revenue, our players were bought with profits, not loans (ala tores) and then the Glaziers came to town.

    Making arguable (with Real Madrid) the worlds richest club (a few years back) too the most endebted is hardly good business, or good management. And I never got past a GCSE in business studies! But then maybe that means as I only ever learnt the basics, I never lost sight of them! Either way as a UTD fan I am worried about it all coming crashing down, especially when city now have a Sugar Daddy of Epic proportions. Utds wealth was hard earned, and was wasted in a single day, the day the Glaziers town, so if there are any wealthy Arab sheikhs or Russian oligarchs out there (ones that actually have cash as opposed to Portsmouths owners who seem to come straight from an Only Fools episode) can you please buy us and pay off our debt! We won't need massive yearly payouts after that, you'll actually get a return for your investment! All we need is shot of the ball and chain and we'll be ok, unfortunatly that's easier said than done!

  • Comment number 44.

    Now look, instead of just complaining about things, why not do something about it. For example, MU and Liverpool fans take a year off from attending games themselves. Instead, they each adopt a club in need. Man U fans take Wrexham, Liverpool fans take Chester. Go and attend their games for a year instead. Three things will be achieved:
    1. these clubs will be saved (although get rid of that chairman at Chester first)
    2. God will certainly want to reward you for the charitable gesture
    3. you will save a pot load of money on entrance tickets.
    Then after the american gentlemen have all gone bankrupt, the fans can pool the money they have saved, buy the remnants of the club out of bankruptcy, and resurrect them in the style for which they were intended - something that the real fans (wherever they are)can take pride in. All it needs is one person at each club with enough Gonads to take the lead. Since there are 70,000 of you in Manchester and 50,000 in Liverpool, there should be at least one somewhere (although London fana believe that all mancunian and liverpudlian fans are fairies without the necessary.
    Come on the North West, don't just whinge, help yourselves

  • Comment number 45.

    Every since 2005 I have heard stories about how Man Utd are about to fail. It didn't happened. - it was what some people wanted to happen, what you don't always get what you wish for.

    According to Forbes, Man Utd's debt was 84% of its worth in 2006. It is now 54% - not bad for a recession!

  • Comment number 46.

    Matt- Thanks for your response(27)
    You are right that the Glaziers were first 'out of the blocks' on this 'business model' and so far this is only one that has been successful.
    As has been pointed out by 'Jamie', 'Straightdrive123' and others, the net result for the club has been a very successful haul of trophies and with some great football displayed (especially when Rooney and Ronaldo were teamed up)during this period.
    To me the 'business model'(if thats what it is) existing at Chelsea and Man City is far more worrying, i.e. the respective owners could wake up one morning and say "Guess what, I'm fed up with EPL football, I'm off" - what happens then to the respective clubs finances?
    Even the Glaziers, who will want to protect their investment,cannot defy the laws of gravity( sorry economics!) and they have to adjust their business strategy as a result, hence the bond issue -but with Abramovich and 'the Sheikh', they have already written off the monies that have been spent (raising the the wages bill etc.) there is no business imperative whatsover for these owners; hence all that needs to happen is they become more interested in something else (say, horse-racing!) and stop investing; then everthing goes to 'pot'-especially for Man City who don't even own their own ground!

  • Comment number 47.

    Does Forbes mention how the entrance ticket prices for 2006 compare with those now ?

  • Comment number 48.

    Hi Matt,

    Brilliant blog, thank you. really interesting and intriguing to see how the whole refinancing plays out.....only time will tell I guess!

  • Comment number 49.

    Is Portsmouth an example of "the Sheikh model" going wrong ?

  • Comment number 50.

    The dept that united is carrying must be cleared as quickly as possible. It seems to be a noose around their neck. The day when they start to fall back, and do not win nearly everything in sight the tighter this will get. Fonds are maybe one way of reducing the pressure, but again only as long as we keep on winning. In my (obviously very limited) view the only way to get rid of this problem would be to go back on the stock exchange. That would get rid of the dept and could bring in new revenue.

  • Comment number 51.

    Great blog, I like that the problems behind the scenes are being discussed adn you simplify it pretty well too. The other blog a few days ago on a similar subject was great as well.

  • Comment number 52.

    Has anyone else noticed that the 'age of austerity' link at the bottom of the article goes to a talk by an economist called... Danny Blanchflower!

  • Comment number 53.

    A good blog entry, which doesn't follow the all-too-common "it's sport/football, so only thickos will be reading it" line, but actually credits the intelligence of its readers.

  • Comment number 54.

    Yes, despite the big freeze it's hot air time again regarding the Premier League and debt........good blog though....I refer to so many of the replies.

    The model is very simple:

    1.Successful business investors with a history in sport zone in on the fact that the Premier League is one of the biggest (most seductive) growth opportunities in sport...based on revenue and profit growth, TV money (and its projected growth), emerging markets in Asia, Africa and the America's etc. (all linked, needless to say).

    2.Those that have the financial clout move in and buy attractive investemnts. Using as collatoral existing assets, they have no trouble borrowing and they go for a leveraged model on the basis that the business model will support the interest repayments and fund the required investment in the team.

    3.Have no thought whatsoever of intereim profits (if you're familiar with share investment read "I don't want dividens...I just want capital appreciation"). Their interest is simple....appreciate the asset based on the factors that were already in play when the asset was purchased and by keeping the asset at full this context meaning keep the team successful.

    4.Sell the asset in a number of years and realise the capital gain. Right now for the Glazers this would be in the region of $400m. (Ensuring, of course, that it remains marketable.)

    5.In the interim, if the financial climate changes, restructure your debt. If something unforseen comes about (unlikely) then sell the asset and realise a significant profit...even if that is below original expectations.

    6. ...and most importantly...ignore the endless speculation and nonsense in the media and amongst fans (who invariably have NO idea what they are talking about)...and just get on with it.

    QED......and everything else is irrelavent!

  • Comment number 55.

    I agree with all your comments except too big to fail. No institution is too big to fail. If the Glazers default on their dept then the hedge funds pick up the pieces and probably sell the assets on. What this will mean is Old Trafford may become Zumfly Airways Stadium. The new manager (because there will be one) won't have cash to keep the team winning and Man U fans can wave to the Leeds fans as we pass them coming up (and us going down. Hmmmm, lets enjoy what we've got whilst we still have it. Ronaldo's departure with no replacement was a sign.

  • Comment number 56.

    Is that a roundabout way of saying that a bunch of american billionaires who care nothing about footabll and particularly United buying the club then not actually investing a penny of their own money into it but actually borrowing the entire lot, then not happy with that making the club completely liable for what is near to being a billions quids worth of debt and ultimately owning the club but not actually putting 1p into it a bad thing.

    The Glazers strategy is simple - make the fans pay for their debt, make any one else pay for the club as long as they don't have to put 1 dime into it - which is why we've seen ticket prices at OT go up close to 50% year on year for the last 4 or 5 years. And what debt have the Glazers written of with our well earned cash - absolutely zilch!

    Particularly given that the world has gone into economic meltdown, it's easy to say well it's ok to look back but the economy was only ever going to go one way!

    But then some of us said from the very start this wasn't just a great idea, but possibly the worst thing that has ever happened to the club bar the Munich disaster of 58 and the Babes being almost entirely wipped out!

    I don't buy the ow it's alright it's United biggest club in the world blah blah. Something has good to give. We've been lucky in the sense that we've won three Prems on the bounce and been in two champs league finals thats generated quite a bit of cash - that's not a quarantee for the next year, two year, three, years, etc, etc.

    It's a shame some of the more loyal fans have felt the club has given them no alternative than to start FC United.

    I don't think Fergie is a god, great manager who is liable to the odd mistake including tactical and concerning transfers but for the first time I feel he's really let the fans down by welcoming the glazers and always saying how supporting they are. I know they are his bosses but ultimately something will give I'd just love to be a fly on the wall of his office if one day he is told that it's his transfer budget. Something will give the only good thing I can see happening is if someone buys the club outright again but they may be no better than the Glazers.

  • Comment number 57.

    I think you've got things a bit wrong in building a view around the fundamental assumption that the cash isn't free; It is free. Heres my argument; In any ordinary business there are costs,a margin and a sales price, resulting in either profits, or losses of course. But in fact the fundamental point is costs. Activity costs and (in most businesses) there is a product. And in most businesses that is physical and its that which is sold. In order to finance the cash cycle needed to buy raw materials, pay wages etc you borrow money. You pay it back on a short or long term basis. And every day you take the risk to sell your 'product', or not. Thus the link between borrowings, the costs, sales volumes and the sales price are inextricably linked. In most cases you cant sell more than you can build, which for whatever reason is restricted by a constraint. You cant borrow more than you can justify based on those constaints (and the banks deduct risks before they cap their investments, which are usually sizeable); OK, boring but neccessary to cover first. Now in the ManU case what is the product and what did the banks lend on? And what in fact did the Glazers buy? What is produced every week, and where is the revenue risk? If it were a normal business of the scale of revenue of ManU Corp, it would already need to have had borrowings of the scale of 700 or so million (gearing isnt bad, revenue is low in cost, very high in margin, isnt dependent on competitive outcomes in the short term). Remember a product life cycle can be as short as 4-6 months today!- So my argument is that ManU's dramatic global growth has been almost free, has always been over-leveraged on the irrational value of 'soul' and old assets and 'goodwill'(try to get a multinational global business running for less than a few billion, not possible). SO - I argue that in fact it is THIS model that is unsustainable. An argument that is rich in paradox. Money now forces the global brand (need to be bigger to pay back the loans)which forces competitive advantage; The only real regret (and mentioned by others, and Matt in the column) is that few others in UK can follow in these footsteps. And that drives me to conclude that if the model is to be sustainable longer term, a European League would be the best outcome. And as Matt said, even a change in the interest rate is enough to finance the player replacement programme! Thts not a marginal moel by any means, but it isnt a risk free model either.

  • Comment number 58.

    Old Trafford will always be Old Trafford .MUFC do not sell the naming rights of their stadium ( so Zumify Airways ...dream on ). Ronaldo's departure was part of a natural change ( the important thing is he gave us incredible performances and truely "Wonder Goals" and we made Mega £s,)while it lasted, it may mean a marginal dip in team's form ( only if comparing with last 2 years ) but in the long run it has no bearing.Rooney has scored more goals than Ronaldo did this time last season What happened when Cantona/Van Nistelrooy/ Becks or Keane left ??, we still kept winning. Why is it so difficult to understand United's reason for continued success, its bases upon Alex and the club's belief that players need time to integrate with, and understand the club's philosophy of developing over a period of time. I would agree that with the departure of SAF, Giggs, Scholes , there will be a definite void, this is where the club needs to plans ahead, and who am I to say that they are not already doing that.
    As far as the finances are concerned , models will be adopted and discarded over period of time with change of personalities/owners, the club has a Global Brand , that will take many many years of failture to erode value, you only need to take a trip to the Far East or the Indian Sub Continent to realise how big it is. We may not like it that decisions that impact our beloved game are being made thousands of miles away, but, The Indian Sub Continent is today the place where mega deals are done, just look at Cricket and you will know. And they will not let MUFC slip away into a lower division.

    Talking about ticket prices, yes they have risen sharply, but, do we complain about Rail/Bus fares or Gas/Elec tariffs which rise much steaply every year, No Sir ... we don't and that's because we are a very tolerant society.
    The corner shop paralance was very good, but if one corner shop went bust we can go to another one a few blocks away, but you could'nt say my club has gone under, never mind I will go to another one to watch footie, it is a small matter of "Passion".

    Don't moan about the riches of Blatter/Platini et al, its happening in all walks of life and in all sectors, remember the "Expenses Scandal" not so long ago, it happened across party lines , given an opportunity, they will all be at it. Check out a guy called Richard Fuld CEO at Lehman Bros if you want to understand more about this strange behaviour.

  • Comment number 59.

    Afternoon all, good to see so many comments (I struggle for double figures when I write about swimming, laughing devil), I can only assume it's to do with the weather. Even Soccer Saturday has been reduced to doing very bland mid-season report cards for each team. But as there are so many posts here I'm going to have to be very concise with my replies and will skip ones I've already answered in my first post (27). I'll also skip you if I don't like your tone. Only kidding.

    WilliamMc (28) - Ahh, well the "previous regime's" role in all this is fundamental to what is happening now. I might get more into this in a later reply but the key things to remember are that the Glazers fought a long and expensive campaign to buy up Man Utd plc and take the club private again. Two years and an awful lot of cash. More cash than they were probably hoping to spend when they set out on the purchase in 2003. Hence the need for lender-of-last-resort loans to get them over the hill. And why did things get so tough/lumpy towards the end? Remember Fergie's row with John Magnier and his Coolmore buddies about Rock of Gibraltar? Well, they dug their heels in and made the Glazers pay a premium for their United shares. The other point to make is that this all kicked off when the Competition Commission blocked BSkyB's move for MU. That would have made for an interesting merger. My guess is that Fergie would be going for seven in a row this year.

    Oops, forgot the ones after (10)

    Ted (12) - Amusing stuff but I'm not sure things are quite that bad. I also don't believe the Glazer business model can throttle back and just bump along for a while until some sense returns to player valuations and wages. The debt is "secured" against MU's "success". When you look at MU's revenues, fan base, squad etc that's not such a bad bet, but is it as safe as Arsenal's £300m 25-year fixed-rate mortgage (5%ish) secured against the Emirates gate receipts? Probably not, no.

    phil (14) - Good riposte and I don't think the situation is completely "indefensible", as other posters have pointed out. The LBO/Glazer method can work...and it is has, by and large, until now. I also take your point on Martin Edwards and that reminds me of exactly how you can make money out of football. You get lucky!! He is perhaps the epitome of the pre-PL football chairman (local businessman made good, wants the best parking space for his Rolls, face in the paper, free tickets for his mates etc) who suddenly found himself sitting on an enormous paper profit when the top clubs got government-backed new grounds and the FA let them keep most of the TV money to themselves...TV money that was about to go through the roof thanks to the advent of satellite and cable telly. Investing, like comedy, is all about timing!

    willhk (15) - You're absolutely right to bring up what happens after SAF. Plenty of top-flight comps have gone down the tubes when a dominant leader/CEO has left....shades of MU post-Busby, no? In fact, I think the importance of key personnel is even more marked in sport than business. That is why the cost (wages and fees) of top talent, on or off the field, is so high. It is another reason why sport is such a strange and fickle investment. You live and die by the quality of your people but they can get injured, go off the rails, get pinched by somebody not playing by the same financial rules, fall out with somebody else in your organisation etc etc V strange business. Much easier ways to make money.

    tomgreen1982 (17) - You're not really telling me anything I don't know already, to be honest. You don't need to work for HSBC to know that banks are recapitalising, inter-bank rates are higher than base rates or that lenders are risk-averse at the moment. Nothing I wrote above says otherwise. I do make clear, however, that in the interest of readability I would not be getting bogged down in data and detail. But as you've brought it up, interest rates are at historic lows, LIBOR is significantly lower than it was during crunch and I'm right that only high-risk businesses should be paying double figures on interest at the mo....MU has a credit rating at the top end of the high-yield bracket. That is why the vast majority of their borrowing is only a few points above LIBOR. The problem is the 25% they borrowed as Piks from the hedge funds. They're at 14.35% and rolling up interest every year til 2017. Christ, can you see why I didn't want to get into this in the main piece now Tom?!?

    HCKKBAN (18) - The Ronaldo money is crucial to this argument. Fergie/fans think that money should be reinvested in the team (and have certainly operated on that basis in the past). The Glazers/some of their lenders presumably (we are all guessing a bit) think a chunk of that money should be used to finance the meet the interest repayments. Does this mean MU is now a "selling club"? After Ronaldo's windfall, the net spend since 2005 is pretty much flat. Hmmmm, not sure that's what Fergie had in mind when he got behind the Glazers. And the other thing to bear in mind is what terms the Glazers are operating under with those loans. Buried in the small print will be the covenants, ie the early-redemption fees you find in your mortgage offer. It is rumoured that reinvestment in the team is a condition of some of MU's loans. Certainly is at Arsenal and that is why Wenger is sitting on a big war chest at the moment. Getting him to actually spend it is their problem.

    Salford Devil (19) - Hear, hear! I love the Barca model too. And you're right to flag up youth development. MU used to do it too once upon a time!

    foxy (21) - Pretty sure they do own the stadium. But it isn't a particularly liquid asset so you could argue that it isn't much worth to anybody unless they have the team too. It's 100 years old in Feb, by the way. Does anybody know if there are any "must be used for sport/by MU" conditions to its lease? If there are it really has only a very nominal value to anybody without a team to fill it.

    ricky66 (22) - The PL run the FAPP for their league and FL for theirs. The FA are kind of their in the background not doing a great deal. All very unsatisfactory. That said, the FL is getting better and the Gov has been making noises about more regulation (with FA support) but has not walked the walk yet...mainly because they don't have much leverage. In short, the PL runs the English football these days.

    Blimey, this is taking longer than I expected. Good topic, though, innit?!?

    I'll have to come back later.

  • Comment number 60.

    Good read. Very interesting topic. Just before the start of the season I had a chat about the top four's finances and made a few bold predictions for the next decade and where our 'top four' would be and scarily they already seem to have started shaping up! personally I feel the top four will turn into a top two of Arsenal and Man City. Man City for obvious reasons and i feel Arsenal have been by far one the best run clubs in the country, living within their means and the vast amount of young, maturing talent Wenger has available makes me feel they are going to become the next Man U, having a soft spot for spurs, it annoys me to say that! Seeing it happen at Leeds just a few years ago and then the Glaziers and Gillet and Hicks doing this makes me feel they've lost their minds. At Leeds as im sure your all aware we needed to qualify for the CL every season to be able to carry the debt we had, we finished 5th the next season, and the rest is history. Its already started happening to Liverpool, im not exactly sure how they've refinanced this debt but im sure like Leeds did, they've budgeted on being in the top four each season, i feel it would be interesting to see what happens in the coming years if liverpool finish 5th or lower. At Man U i feel if they dont replace the people that will obviously be leaving in the future serious problems will lay ahead there too, alex wont be around forever to mastermind the next title and find the next big thing like he has done so many times before for them. Chelsea have an aging squad, a potential 3 year transfer ban and a manager who is seemingly refusing to buy in possibly the last transfer window they shall see for a long time. for me it adds up to nothing good.

    does anyone else think these debts could result in this or do i think wayyyy too much?

  • Comment number 61.

    I read a book recently about a small US baseball team who proved that money wasnt needed for success. It showed a small dedicated 'terrorist' movement of players and coaches, dedicated to the mission, and paid on average 275 dollars a week each was enough to a) find talent and b)nurture it, and c)keep hold of it long enough to make it. I forget the name, Money Ball or Money Pit or something. They were successful for several seasons beating the big boys. However they are back now in the lower levels now, success having withered away, stars gone on to bigger and better things. A bit like Oldham or Wimbledon might have achieved. But, and its a sad reality, it was a relatively short cycle. Great while it lasted, but eventually, it fizzled out. Money then is like a piledriver; crude and not a guarantee but in the absence of pure art and pure amateur passion, the next best thing and it sustains the industry. Big money at the top and hundreds of clubs relying on trickle down to survive.So the reality is that the english leagues should be grateful for the largesse.

  • Comment number 62.

    No not another Nani please and with respect if the BBC has been having breakfast at Claridges ..quite simply the most expensive business breakfast in London then I want my licence money back !In tandem with Mr Peston's blog yours' serves to illustrate the frightening amount of interest costs that are being expended .Certainly in our part of the ground serious questions are being asked as to why MUFC are over-reliant on "Sir" Ryan and Scholsie .One relevant question not referred to in either blog is do the senior lenders have an asset sale covenant in their bank lending agreement whereby if proceeds from an asset sale (Ronaldo )are not recyled in the business after a specific period (eg 6 months )then those monies must go to paying down senior debt ?In MUFC 's current parlous state on the field (err 2nd in the Pship ,semi of Milk Cup ,huitiemes in CL )that would raise eyebrows .Sir Matt ,GB and many more must all be looking down aghast .Where did it all go wrong Mr ..Glazer ? Look forward to continued debate .Yours sincerely Butch ..North Stand Exec and City Red (former "cockney" red 76 style)

  • Comment number 63.

    Foxy has a good point by the way .As per Simon K s article in was it last saturdays FT .If TV rights go the way of Spain then its all a storm in a teacup.Butch

  • Comment number 64.

    No not another Nani please! In tandem with Mr Peston's blog yours' serves to illustrate the frightening amount of interest costs that are being expended .Certainly in our part of the ground serious questions are being asked as to why MUFC are over-reliant on "Sir" Ryan and Scholsie .One relevant question not referred to in either blog is do the senior lenders have an asset sale covenant in their bank lending agreement whereby if proceeds from an asset sale (Ronaldo )are not recyled in the business after a specific period (eg 6 months )then those monies must go to paying down senior debt ?In MUFC 's current parlous state on the field (err 2nd in the Pship ,semi of Milk Cup ,huitiemes in CL )that would raise eyebrows .Sir Matt ,GB and many more must all be looking down aghast .Where did it all go wrong Mr ..Glazer ? Look forward to continued debate .Yours sincerely Butch ..North Stand Exec and City Red (former "cockney" red 76 style)

  • Comment number 65.

    Excellent article, Matt.
    I'm a little shocked at some of the responses from United fans. Phil thinks any of the other 19 teams would happily swop places with United. Pretty arrogant and well wide of the mark. Manchester United are not the only club deep in debt, of course. Chelsea and Manchester City are just two others. The arrogance is in the feeling I get that these clubs feel they are more important than the game itself. They're not.
    I'm a Villa fan and I'm proud to be part of a club that's run on a proper financial basis. I'm also an accountant, by the way.
    Running at a loss, year in year out, is simply NOT SUSTAINABLE. It's also extremely IRRESPONSIBLE. You can do it for a few years but eventually it will reach the point of no return. Remember Leeds?
    I don't care about the Glazers or anybody else who gets themselves in this mess. It's their own fault. I do care about the message that is implicit in their actions, which is that it's perfectly OK to live above your means.
    Every week another club goes into administration. That means that the creditors don't get paid. And amongst the creditors there are clubs that have sold players to the club in liquidation and they will never get paid. There are also players wages to be paid. This is the situation that Portsmouth got themselves into by buying players and paying wages they couldn't afford. This is the situation that has cost Norwich City, who have done nothing wrong.
    It is not impossible for Manchester United to go bust and I hope they do. I've nothing against their fans but the game needs a shock to make it bring these irresponsible club owners back into line.

  • Comment number 66.

    Thanks for getting back to me Matt.

    Maybe you didn't like my tone!

    I don't really get where your debate is going. It seems from your replies that your trying to prove that you do know about the intricacies of United's finance. But like 99% of people who put their two pence in most of it is hot air.

    I feel I shouldn't return to this page as I'm not really willing to go down the road of trying to disprove what you are saying. I do feel that you are trying to give the impression of someone with a neutral view but can tell from some of the quite snide comments you have made that this might be a bit of a crusade for you.

    Sports journalism is a trade where opinion can be balance3d with fact. It seems in this case that the facts are necessary and opinion is meaningless. You keep saying you don't want to get bogged down with stats but I'm sorry to say that no financial analyst worth his salt would agree that opinion can come anywhere near a subject such as this...your article is based on hear-say.

  • Comment number 67.

    Unbunch your panties, Jamie, I haven't forgotten about you. Anybody who takes the time to make such a lengthy post to one of my blogs definitely deserves 10 minutes of my evening.

    Right, going back to your original post (23), my remark about leaving the intricacies of the bond market to others was meant on more than one level. One, I'm not a bond trader. Two, this is football blog. This is why I offered readers two links to more detailed explanations of the MU bond. I did, however, take the time to talk to a number of bond traders in London, including very senior figures with considerable experience of football finance. Didn't have time for armchair accountants, sorry.

    Your next half a dozen paragraphs confuse me, to be honest. As they merely rehash fairly commonplace knowledge and certainly don't contradict anything I wrote in the blog or in my subsequent replies. I can only assume you wanted to strut and preen a bit. Fair enough. You should consider journalism.

    But you then start to lose track of what actually happened and why we are all talking about MU's debts. The Glazers (glaziers are the chaps who cut glass) refinanced their 2003-2005 borrowing in the summer of 2006, long before anybody, even thickies like me who read the paper from back to front, had heard of sub-prime mortgages. The credit crunch was still two years off when the Glazers agreed to borrow £130m of Piks from Citadel, Och-Ziff and Perry at an eye-watering 14.35%. Was this sound business practice? Was this LBO orthodoxy? Kind of makes me wonder what rates they were paying pre-2006, a period when you claim everything was "hunky dory".

    You then finish by making the same point I made (only a few clubs can operate like this, so what does that say for the competitive balance of the EPL compared to more regulated competitions like the NFL or Bundesliga, for example) but in much sniffier language.

    So basically, we agree on the main point of my article and both have a grasp of basic finance. The only difference is that you are a bit wobbly on your Glazer takeover chronology. No worries, just stick to what you know best.

    Right, that's probably enough from me on this subject, I'll be here all night if I don't turn off now, but before I go I will make one last point. You're right, this is a bit of a crusade for me. But probably not the crusade you think. I don't particularly have it in for the Glazers or Man Utd. I do, however, have it in for people who think football clubs are the same as corner shops. They're not. That is why they are not suitable for LBOs, Piks or any other example of financial engineering. It is also why the vast majority of people who try to make money out of them don't. But it is also why football clubs almost never actually die. They have a value beyond their balance sheets and they are sustained by more than just credit notes.

    Thanks for reading, Matt

  • Comment number 68.

    Thanks for your time Matt.

    Have to apologize for my rather 'sniffy' language. I think after hearing countless people groan on about how this was the end of football as we know it, and that United are on the verge of 'doing a Leeds' that your article was the straw that broke the camels back. Rather than take time to read again (and see that you weren't declaring the imminent doom of United but warning about the gap in financial clout between the have's and the have nots.) I vented a little (ed. understatement).

    I do like your integrity though and the fact you're not afraid to hold your punches is refreshing in a world of journalists too eager to please everyones opinion.

    I might add that I do intend to follow a career in Journalism, either online sport/music or broadcast. My dad was a print journalist. Although I hope that I don't go down the route of ignoring substance in order to 'preen and strut'. I am in the 1st year of a Journalism b.a, however, being 24 I'm feeling the desire to break into the industry quite hard to ignore.

    Anyway, thanks for the reply and I hope my prickliness didn't offend too know what they say about opinions.


  • Comment number 69.

    I think most of us agree that, despite our club loyalties, the present set-up is unsustainable, and comparable to the climate-change v. national-economy conundrum. We won't change the system because we can benefit from it in the short-medium term, but there will come a day when it becomes too unwieldy not to tumble. And when that day comes, we hope it will be "someone else"'s problem.

    Personally (and I believe I'm not alone), I believe that legislation that applies to sports "companies" should be designed in favour of the sport and it's followers ahead of remote investors, but for some reason, the "bottom line" seems to serve as the only decisive argument worthy of consideration. However, it may well be too late to change anything in terms of the financial structuring of a sport such as football (in the UK at least).

    I do also believe and ensure that the more money there is in the sport, the less of mine they need.

  • Comment number 70.

    #19 Fergie's first generation of youth players: Giggs, Scholes, Beckham, Neville, were a fantastic bunch of players, and the second generation are due to break through in the next two years.
    SAF is planning retirement soon after he sees the emergence of these he will soon retire.
    Johnny Evans, the Silva brothers, Danny Simpson, Darron Gibson, Gabriel Obertan, Danny Welbeck and Federico Macheda.
    Admittedly not all of these came all the way from the youth academy, but they are a brilliant crop of players and they will help distract attention the financial pressure.

  • Comment number 71.

    Matt - I read your blog yesterday and contributed on 3 ocassions since, I have also read your subsequent deliberate and choicest replies,(not mine ) I somehow get the impression that you tend to get drawn at a tangent to issues/events of the past which are irrelevant to the core issue on which you chose to write , ie I quote 3 examples here conspicious by their abundance of cynicism )

    1. " Remember Fergie's row with John Magnier and his Coolmore buddies about Rock of Gibraltar? "

    2. " Martin Edwards and that reminds me of exactly how you can make money out of football. You get lucky!! He is perhaps the epitome of the pre-PL football chairman (local businessman made good, wants the best parking space for his Rolls, face in the paper, free tickets for his mates etc)"

    3. " Does this mean MU is now a "selling club"? After Ronaldo's windfall, the net spend since 2005 is pretty much flat. Hmmmm, not sure that's what Fergie had in mind when he got behind the Glazers "

    Should you choose not to respond, I will fully understand afterall you did say today " I'll also skip you if I don't like your tone.


  • Comment number 72.

    Matt, good article - you did say this though that I have to question...

    "Where's football going? Hmmm. Well, the big boys will be OK. Just like every other sector of the economy, when the good times end there is a flight to quality ie safe bets.."

    Not sure if that is correct - over the past 18 months we have seen some of the biggest companies in the world either go bust, or had to be bailed out by the government. Freddie Mac, Fannie Mae, Citigroup, Lehmans, Royal Bank of Scotland, Man U sponsors - AIG, GM, Bear Stearns, Bank of America - these companies ONLY survived becaused of tax payers money via the governments - do you think that the governments here will do the same and bail out the clubs where you have footballers earning more in one week than it takes the average worker 5 years to earn?

    One word - unsustainable

    Yes, there will always be football but it cannot continue in its current state. Club will go to the wall very soon in my view.

  • Comment number 73.


    The key point for Man Utd fans that you haven't picked up here is that the bond issuance will be cash-pay, used in part to take out non-cash pay debt. What does this mean? Despite what is on the face of it, a lower interest rate, the cash cost of interest will be higher and by extension there'll be less cash for players.

    Think of it like this, the PIK was the Glazers problem, a bond becomes everyone at Man Utd's problem.

  • Comment number 74.

    Apologies for the double post, but let me comment on this directly:

    "Aren't interest rates at historic lows? Surely only an idiot or somebody completely desperate would be paying double-figures interest on anything right now? Yes, yes and yes."

    Double figure interest rates are at lows, but its certainly not uncommon to be paying double digit interest across the capital structure. One obvious reason is that bonds are multi-year fixed rate facilities (likely in this case a 7-8 year facility), and the relevant benchmark is not 3-month LIBOR (less than 1%) but 7-8year LIBOR (more like 4-5%). Would it be surprising to find a senior secured bond with no maintenance covenants paying a spread of more than 500bps to LIBOR? Not at all, especially when senior debt (secured debt with maintenance covenants and direct recourse to assets) is paying in the region of 450bps to LIBOR.

  • Comment number 75.

    Does anyone else find all the linked text in the BBC blogs insanely irritating and unneccessary? It's terribly distracting and it doesnt really serve a valid purpose. Just look at the terms linked, are you really gonna nip out of the article to pursue info about Countdown or Nani? It ruins articles.

  • Comment number 76.

    " United will be OK. They're a global brand now, too big to fail. "

    so what was the point about the blog.

    Hughgolden i agree its become more like wikipedia and just look at the nonesense you can learn on there.

    poor blog in my opinion.

  • Comment number 77.

    Good article.

    The only point I'd disagree with is the beef.



    Much more likely to be organically raised Limousin or Charolais.

  • Comment number 78.

    This rather proves the point of FC United of Manchester - punk football, owned by the fans, not for sale at any price, taking football back to the people at affordable prices, no selling your soul.
    Say no to moneybags football !!

  • Comment number 79.

    I'd like to think this is less about Man U and more about the knock on effect to the rest of football. I'm interested in the topic but more in the fact that it continues to get more and more expensive to watch/be involved in what should be our game and VFM isn't going up as far as I can see. The majority of games I pay my sky subscription for are average at best in spite of Andy Gray's attempts to convince me that every game has been a classic.

    The bigger picture is that sooner or later someone needs to stand up and start taking football back. AFC Wimbledon and FC United are a start but only a very small one. A BBC journalist that started a campaign to take back football with the platform the BBC generates would be an interesting proposition and instant hero status with a huge number of fans I reckon. Over to you BBC bloggers.

  • Comment number 80.

    All this talk of debt makes me, a humble St Mirren fan fell just a tad smug. As the only club in the SPL to have no debt at all, and infact to be EARNING money in interest in the bank shows a level of financial control that no other club has managed. We made a profit by building a new stadium and selling the old one which has helped our finances greatly. Shame the smug feeling disappears as soon as I look at the SPL league table.

  • Comment number 81.

    '...assets the Glazers have put up to secure all that borrowing are the ground, the players and all the other bits that constitute a football club (apart from its soul, the fans own that).' Well how much soul can the prawn sandwich brigade in surrey conjour up when you don't quite make the champs' league, attendance starts dropping, sky aren't as interested anymore, and ultimatly the bubble bursts. the cockney man u fans might be well off enough to spend lots of cash on shirts and merchandise but they're also rather fickle.

    'Pull a leeds'?...for the likes of liverpool thats the best they can hope for. At least pulling a leeds ultimatly means the club survives. Pulling a leeds gets you 40'000 against huddersfield in league one.

    It's truly massive clubs like leeds that are proving what footballs about. not just with results but attendances too. We might not be popular with other fans but ultimatly our loyalty is propping up the finances of smaller clubs.(gate receipts,tv revenue.) Perhaps these so called larger clubs crashing down the leagues and imploding isn't such a bad thing. it may help re-distribute the money among the rest of the football league and give the game back to the fans.

  • Comment number 82.

    Too big to fail?

    Matt you should look at the US economy - they say that about it but the US is a disaster no matter the 1.8 trillion worth of 'stimulus' borrowing, to add on to the 12 odd trillion worth of debt already there. This of course not even considers private debt and mortgages (French - it means dead hand - boom boom), and oh my word commercial property.

    That fun hasn't even started yet.

    Think Iceland - writ large.

    The debt-based, fiat monetary system is in its death rattle, and Manchester United bought into this American way of business via the Glazers.

    What will happen if interest rates go up, thereby crippling the club with rises in servicing borrowing costs?

    Man U, Liverpool, Chelsea - they will all end up like any other over-geared business - insolvent.

    Then the Chinese will arrive. They have all of the 'debt' in terms of IOU's from America.

    A knock down price and hey presto, President Wu will be in a corporate box eating prawn sandwiches!

    Timeframe - before 2013.

  • Comment number 83.

    Football's debt problems will continue to rise whilst all clubs pay wages to players and coaches which do not reflect the amount of money being earned by the clubs. Fifa need to bring in legislation that will stop clubs having a wage bill exceeding 40% of the previous years turnover.At the moment most Premier League clubs have salaries that account for at least 60% of the revenue generated. Is there any other business in the world which pays so much of it's total revenue on wages? If there is then it is another business going down the pan.
    BlueRoo what you say could easily happen.

  • Comment number 84.

    Hi Matt....

    Hope the 4th title does come in.. but it is all a edgy game.. these days..
    We have lost the powerful force of Ronaldo and Tevez..If they had been in game today I am sure the talk would be different..

    That said the debt financing is the most common way in US.. Everything they do is on debt and in hope things appreciate and they can sell them at a higher price and walk away clean...Sadly for them the investment in Man utd is not so sweet as the debt finance is high.. And this means they are scouting for off-loading this investment.. Don't know.. when but surely over the high priced breakfast and lunch there will be talks of off-loading Man Utd..

    Sadly that only means the people who get the raw end is the fans and the game of football.. Again just cause a business man had a vision of making money and some banker was willing for to give a few million bucks as debt at a higher cost for an asset that they never owned and will never own...

  • Comment number 85.

    As a supporter of a nonleague club I find this financial strife a welcome trend. The Premier League has been just a construct for the top clubs to cream off the value that football's history, traditions and popular appeal has had. It will be great to see all the top clubs collapse as they will since they all have huge debts that cn only be paid if they all survive.

  • Comment number 86.

    History shows us that all Empires Rise and Fall.
    A little Empire is essentially what "The Global Brand" known as Manchester United has become.
    The British Empire. A Global Enterprise, solid as a rock, magnificent! It's downfall was sown in it's very success. It simply overreached itself and couldn't cope with the consequences. Too full of it's own importance and too greedy. Sounding familiar?

  • Comment number 87.

    Very good article and OH so true!!
    I'm a Portsmouth fan, yes we do exist and no, we don't like being the butt of everybody's jokes.
    There really is too much money in the premier league these days which is altering the structure of our national sport. Of course it helps if you have brand like the top 4, 6 or even 8 clubs but the whole point is that it is supposed to be a competition of equals and it isn't. every time a player changes clubs for £40 million, the smaller clubs groan, because we can not compete on this basis. The owners, as you pointed out, are all rich or very rich foreigners, loyality is to profit not the footy club or fans that support the club. This is the reason, I'm sure, that another league fixture in the middle east was proposed. This will happen within the next few years.
    Sooner or later the system will collapse, as you say, just like the British Empire, once one club folds others unfortuneately will follow. Right now we, Portsmouth, are odds on favourites to fit that role.
    Most of us (fans) think we will survive one way or another, but the premier league won't. It will disappear within 10 years to be a European super league with restricted access. That's the day footy in this country will die.

  • Comment number 88.

  • Comment number 89.

    english football cannot escape from sound business economics! whatever the brand, the success of any football club.
    Any business owner needs to think LONG TERM not quick bucks.
    My questions are:
    where is the glazers family EQUITY? and therefore are they risking anything they own?
    And the answer is no. They are in the OPM (other people money) business. They saddled the asset they're chasing with debt just like any big wall street hedge fund. And they're sucking slowly but surely the club from its substance. Disgusting!

    For that I have complete contempt. This cannot work. This is unsustainable and will lead to major disaster for this club or any other club. Let us change the rules. Let us get back to common bloody sense. And yes, let these clubs be run by true lovers of the beautiful game, they will surely pay more respect for the history and the fans of these clubs. And remember that you cannot go against sound economic principles for a long time.

  • Comment number 90.

    This is a "sport" blog about a game called football? Sorry, I thought I was reading a section of the Financial Times!
    You just don't get it do you 23. Jamie and 38. "Balancedthought"? The reason why the game is actually a farce of a competition is precisely because of what, in the main, your beloved Manchester United have done to it! Years ago, before I stopped going to football matches because of the ridiculous ticket prices, I remember reading a book by a bloke called David Conn about what was going wrong with football. The back cover was a photograph of shoppers (sorry, Consumers), coming out of the Manchester United Superstore/Megastore grasping their bags of souvenirs to take back to Devon. It was about 1995. A glory er...sorry, a souvenir hunter could even buy a bottle of "Manchester United Red Wine" to go with the clock/duvet/school bag/toy mascot/pants/power tools etc. All to fund the colossus of the growing Global Brand and to steamroller all the opposition. Despite being the Powerhouse of Marketing it still took the world's greatest ever manager another 4 years to win the European League. Not as good as Clough then, with other club's rejects in his Forest team!
    You use the words, "so all you ManU haters..." in your comment. Are you really surprised that ManU are the most hated club in England? Do you really think that it is all about being jealous? Or is it really about how THE BRAND is thrust in everyone's faces by a biased media looking at share prices and a chance to make another programme about The Theatre of Dreams or Coleen Rooney's shopping habits? Funny how the MEEDJA never made half as much fuss about Liverpool when they were winning pretty much everything in the seventies. Working class scousers not as "romantic" as the legends of Old Trafford?
    I personally would like to see Man City beat them at their own game. Buy, yes BUY, the best players and win the lot over and over again just to rub it in. And before you say anything, I'll say "pot" and "kettle". About United's Fantastic Youth Policy: Cantona, Schmeichel, Keane, Berbatov, Rooney, Ronaldo...all through the youth ranks eh?
    Even if City were to win a few trophies and maybe the Euro Pot one day, they would have bought it just like you did. It's not even a knockout Cup competition played between the actual Champions of their respective countries! Clough and Paisley must be looking down and thinking "if only we'd had all that cash!" Mind you they didn't need it did they?
    Anyway, I was actually crazy enough to want to see your ManU win title after title, with Chelsea perenially finishing second, just like Rangers did in Scotland. Why? To actually show what a farce it all is. Scottish fan on holiday, "I support Ross County and Rangers". One to be "cool", one for the reality/kudos. Spanish Hotel Manager in Majorca, "Me, I am Barcelona and sometimes Mallorca". How long before it's "I like Pompey, (Average gate 3,000) but I support ManU (Average gate 90,000)in the European SuperLeague." Sponsored by HSBC.
    I am always surprised at how much the average football fan seems to know about Stock Options, Bonds, Share Prices, Flotations on the Stock Market etc.etc. Or is it because the "fans" on these pages are not really football fans but actually Middle-Class Businessmen who are interested in football? Vol-au-vents in the dining club anyone? Not for them an away match with Stoke City against Chesterfield in the Cup on a freezing, rain-lashed away end totally open to the elements with just a Pie SHED at the back of the stand for no respite. A trip to the air-conditioned toilet block (NO ROOF!). Ahhhh, memories! It made the Boothen End's toilet trough seem quite modern.
    You see CHAPS, one day it'll all end in tears and you can go back to watching those other CHAPS play at Twickenham, or should that be "Twickers"? whilst you peruse the Sunday supplements after lunch. I just hope I'm still around to see the flight of the middle-classes from football back to where they belong.
    One more thing. Some say football reflects society. What are they on about? We have an economy totally dependent on the Financial/Service sector(s), in MASSIVE DEBT, run by self-centred, GREEDY incompetents. We don't make anything anymore, we have no industry and the working man is on the decline. It's a few getting richer at everyone else's expense, poseur celebrities struggling to string a sentence together before they drive off in their "Lambos". Stanley, you're better off where you are!

  • Comment number 91.

    I have kept out of the deeper finance technicalities for brevity and offer this as a little wider overview on sustainability.

    Lots of MUFC defence and comments re "not ever one can do it" (finance via the Brand value). If the "others" fail (e.g. Portsmouth and many lower league clubs) in significant numbers, then the MUFC Brand value may well suffer because of the reduction in the market and therefore beyond the Glazers' control. May well explain why the Premier League is touting the PL Brand and looking for more corporate partners (official IT partner ..) to hedge against a wider failure and to boost cashflow (which has barely been mentioned compared to all the discussion re profits) to defend against a possible meltdown. The PL Brand and the likes of MUFC would probably be plucked from the ashes for the new Chinese or Indian owners but the remaining tenuous links to the Britishness of the game and the traditional fan would be a casualty of such a meltdown.

    Probably lots of football club directors hoping fervently that theirs is not the club that starts the domino effect of financial failure ... Time for brave hearts and sphincter control?

  • Comment number 92.

    Well tbh it I am beginning to wonder if the money is there. It is blatantly obvious that United need another striker, to back up Rooney, - as Berbatov seems to have just lost all his pace whatsoever, making him subsequently about as much use as a cat-flap for a rhino. Another questionable position is right back. Neville I think admittedly realises it's time to call it a day, Rafael is still young, so as of yet is still very inconsistent, Wes Brown always does well at right -back but some of his performances at centre back at the moment have made me wonder if he's over the hill, - or is this because he's being played in a less favourable position. Probably the best bet for me, is O'shea who is also currently injured, - okay not so much of an attacking threat, but steady at the back , - and always does a job, - which is United need at the moment stability. Another suspect position for me is centre midfield, United for me have a lot of mediocre, - perhaps a little harsh. fairly good centre midfielders with no one that stands out that you could say I would pick him every week. And there for me lies the problem, there is no continiouty, and you are left guessing which two United will put in the middle. The final position I would question is left midfield, I think what we need is a pacey left winger that can trouble defenders. Giggs is a bit slow now for the wing but still can be used very well in the middle, Nani should theoretically be the answer however his inconsistent performances, - at best, look like he may be on his way out, Park will always give you 100% commitment, but lacks that turn of pace you need to really scare defenders, and Tosic well, - it's hard to comment.

    But the point I'm making is, by no means is this the end of United, as people love to predict. All they need is their regular defence back in place, and they'll be right back in the mix, - not that they aren't already, although they do look a bit toothless in attack at the moment.

    Picking United's best team when everyone's fit I would say,

    O'shea, Ferd, Vidic, Evra
    Valencia, Fletcher, Carrick, Giggs
    Rooney Berb

    Now with perhaps four signings made in the positions I mentioned, - whether this has to be funded by selling some of those supposed stars that haven't made the grade, i.e. Tosic (might get 4 million),Nani (10 Million perhaps) (Berba, 14 million - tops!) that brings in 28 million. Surely some of that 80 million is available to spend, if you say half, - 28 mill plus 40 million, gives you 68 million. Now that could buy you at Right-back Maicon, might be 12 million or so. Left-midfield either Silva, perhaps 24 million, or Di-Maria supposedly want 30 million for him (bit over-priced. Centre-midfield is a tricky one, and probably the least pressing position to get someone in, of the 4 I mentioned. Not that many on the market, perhaps Rodweel(20 million, - not really established yet), - however I do think we need someone long-term not a short term solution. A striker who can finish with pace, that's all Im asking. There is talk about Djeko from Wolfsburg, but he seems very hitty miss to me. Fergie seems reluctant to pay 40 million (as resported for Villa who is now 28). There is talk that United might put in a bid for Benzema who has failed to live up to expectations, but I don't Fergie will like being seen as second fiddle in the first place, so can't sse him going for him. There was a rumour that Diego Forlan may return, in my opinion that would be a good deal, but one I would be interested in if Chelsea get Aguero, (who United seem to have lost interest in ever since thee asking price got above 30 million), then I think Anelka may be pushed out, and he would be a great signing, although I think Chelsea may be reluctant to sell to their main rivals.

    The point I'm making is a couple of signings and United can be back where they were last year. How does this team sound.


    Maicon, Ferd, Vidic, Evra

    Valencia, Fletcher, Carrick, Silva

    Rooney, Villa.

    As strong as ever but at the moment they look a million miles from this. All this talk that United are in debt, hasn't been mentioned, until United seem to be struggling, and require a couple of players in, and people are asking is there money available? - And righly so in my opinion. United's form over the last 3 seasons has disguised the fact that perhaps the money isn't there, as they haven't looked really like they needed to sign anyone desperately, - perhaps to bolster the current squad. Now they are struggling, and clearly need a couple of players in, but they seem reluctant to dp into the market, - Why? I have no doubt Fergie has confidence in his team, but they need players in quick or risk being left behind, not in this season particularly as none of the super-powers seem to be performing, but in the next couple of years.

    Now a question.

    United itself aren't in debt they have it under their name, due to the owners, but if they decide to sell-up, that doesn't mean United carry that debt further does it?

    An answer would be gratefully accepted to this query.

  • Comment number 93.

    BREAKING NEWS!!!! (and an apology)

    MU Finance plc (what was it Keith Burkinshaw once said about Spurs?!?) has just announced a £500m bond issue. Being punted to Asian investors today and tomorrow, Europeans from Wednesday and the Yanks next Tuesday.

    I have to correct a mistake I made, though. The breakfast meeting will be at The Berkeley, not Claridge's. I'm told the cooked breakfast is just as good.

    And that really is that from me as I must get on with other stuff. But thanks again to all those who commented: some really, really good points made. Naughty of me to pick out one but I particularly enjoyed Comrade Stokestrider's cri du coeur.

  • Comment number 94.

  • Comment number 95.

    Sorry, that should be "English football's financial problems don't stop with the Premier League or Portsmouth."

  • Comment number 96.

    58. At 2:48pm on 09 Jan 2010, straightdrive123 wrote:

    .....Talking about ticket prices, yes they have risen sharply, but, do we complain about Rail/Bus fares or Gas/Elec tariffs which rise much steaply every year, No Sir ... we don't and that's because we are a very tolerant society.....
    You must live in some parallel universe mate, who doesn't complain about these things? I think you're on your own there.

  • Comment number 97.

    75. Hughgolden :

    Does anyone else find all the linked text in the BBC blogs insanely irritating and unneccessary?
    Handy hint of the day - "Don't bother clicking on the links"

  • Comment number 98.

    What concerns me is, after one of their most successful seasons, Manchester United would have a made a massive loss last year if they hadn't sold Ronaldo for £80m.

    Even if they do repackage the debt it looks like they will have to sell more of their players in the future to balance the books which will have the knock on effect of weakening the team which in turn will make them less successful and increase their debt/losses further.

    As with the Brown government it looks like they need to sort out their debt problems sooner rather than later.

  • Comment number 99.

    Matt go blog, but... it isn't Fergie's bond is it?
    It'll be the Glazers' bond.
    What always amazed me about this is that Fergie stayed on after the Glazers bought ManU. Do you know what deal they offered him?
    Also, ManU have just reported a profit of 48 mil pounds sterling, I believe.
    Do you know if that's BEFORE paying the interest on their debt?

  • Comment number 100.

    My biggest fear is that the working class have been forced out of the game due to corporate greed. Were MUFC or LFC bought for love? No. Money? Most definatley.

    It is all well and good to say that this is the way of the world but what happens when the Japanese, American and Australian bandwagon jumpers find another product to fall behind? The party can't last forever and sooner or later the big money owners will go with them leaving a game in massive debt, clubs going bust and half empty stadiums.

    Footballers are overpaid as it is. A good 80% in the top flight are only in the EPL for personal gain. There is doom and gloom on the way for English football and I hope all those who use the line that "Big money is the way of world" will wake up to themselves.


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