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June 7 – The scale of debt held by the Glazer family, the owners of Manchester United, is even greater than first imagined after it emerged that their business empire owes £1.1 billion ($1.6 billion), which could threaten their ownership of the three-time European champions.
According to an investigation by BBC’s Panorama programme, to be broadcast tonight [Monday], the Americans are carrying £392 million ($568 million) of previously unknown debt relating to mortgages taken out on 63 of the 64 shopping malls owned by their company First Allied Corporation across the United States.
Four First Allied shopping centres have recently fallen insolvent due to low occupancy, while the report also suggests the malls do not make enough money to fund the mortgages.
They have also borrowed £66 milion ($96 million) against their American Football League team, the Tampa Bay Buccaneers.
The explosive findings suggest that the Glazers’ other business interests are unlikely to be able to pay off Manchester United’s £717 million ($1.03 billion) debts and cast further doubt on on whether the club will have funds to spend on transfers this summer.
United have always insisted Sir Alex Ferguson will be given cash in this transfer window but the Scot has suggested he will keep new arrivals to a minimum.
The research for the programme was carried out by Andy Green, a City analyst and United supporter who is a keen backer of the ‘Green and Gold’ campaign to oust the Grazers.
“The Glazers have called the US property market appallingly bad,” he said.
“They borrowed money at inflated valuations right at the top at the top of the cycle.
“In their core business in the USA they got is absolutely wrong.”
Panorama quotes Dave Whelan, the chairman of Wigan Athletic, as saying: “I don’t think anybody can be satisfied with how Manchester United are being run.
“They have got somewhere in the order of three-quarters of a billion pounds worth of debt.
“That has got to be eliminated and eliminated quickly.”
In March, United chief executive David Gill claimed the club’s debts were easily covered by the income.
He said then: “We have an element of the debt that is very easily serviced by the cashflows of Manchester United, we are in a sport that is getting bigger all the time and as one of the leading clubs we should benefit from that growth.
“We believe we have a much more appropriate and flexible financial structure in place.”