|
Glazers say ‘United are unaffected’ – would you credit it? |
 |
 |
 |
|
Thursday, 09 October 2008 19:48 |
So much is wrong with the today’s Glazer spokesman’s assertion that the club is untouched by the current crisis in financial markets, that it’s hard to know where to start.
Perhaps the saddest aspect is that a once debt free club, only burdened by £760m of debt to satisfy a billionaire’s greed, has to pass comment on the situation at all.
However, given that they do, the spin and plain lies are once again evident.
Firstly, the club was unable, over a year ago, to obtain the terms it required for the desired second refinancing to go ahead. Even before the term ‘credit crunch’ had been coined, the club was being adversely affected.
More recently, the club sponsor, AIG, has had to be nationalised to save its existence.
The supposedly blue chip company was the first major insurer to be found out by its risky forays into sub prime insurance, and is now effectively owned by the USA government.
The sponsorship deal is relatively small fodder compared to even its new net worth, but it is hard to envisage state approval for a renewal of the current deal when it runs out. The American public and government reaction to giving a UK based football team another $100m, having had to bail them out to the tune of $80 billion, would be interesting at least.
Bland assumptions that ‘someone else will come in and pay more’ seem to ignore the fact that worldwide business is likely to be cutting costs for some time to come.
Not enough to count as ‘affected’?
Well maybe the next couple of transfer windows will tell us more.
Recent transfers have been funded by player sales and adding to the debt. More than half of the payment for Berbatov was paid by sales over the summer, with the total fee only likely to reach the £30m quoted if United remain spectacularly successful over the next 3 years.
United will still be paying for Hargreaves, Nani, and Anderson till 2010, and while spreading the cost of players is commonplace, the scale of deferred obligations at United has reached epic proportions.
When you factor in that a major stakeholder in the hedge funds used by Glazer to borrow from is our old friend AIG, the ability to borrow even more to add future signings to the debt mountain must be severely doubted.
So, how can Glazer rake in more money to service the debt, perhaps replace sponsor money shortfall, and keep the team competitive?
Well, no doubt his first instinct will be to ramp up ticket prices again, but given that season tickets have struggled to sell out, that all home games so far this season have gone on open sale, and that football fans, like everyone else, are struggling financially, that too seems a closed door.
Someone once said that the Glazer plan was potentially ‘damaging’.
Just how right he was, and how ‘unaffected’ United remain, only time will tell. |
|
|
Who's Online
We have 8 guests online
|
