Liverpool FC Forum

by **Reg** » Mon Jun 07, 2010 1:58 pm

Manchester United owner's debts hit £1.1bn Monday, 7 June 2010 7:43 UK - By John Sweeney and Andrew Head
BBC Panorama

Manchester United's owners are £1.1bn in debt - £400m more than previously known - after borrowing extensively against their shopping mall business.

A spokesman for the American family has said it holds more than £2bn in assets but the extent of the debt owed by the Glazers is likely to fuel a continuing revolt by some supporters, who oppose their ownership of the club.

Details of the financial arrangements of the owners also come at a time when the sport's governing bodies are facing questions about Premier League debts that have reached a combined total of £3.4bn and the growing popularity of leveraged buyouts in English clubs.

Mortgage documents seen by the BBC show that the Glazers have borrowed £388m ($570m) against shopping malls and £66m ($95m) against their American National Football League team, the Tampa Bay Buccaneers.

In addition to their mortgages in the US, a portion of the Glazer family's £700m Manchester United debt will soon see them charged interest at a rate of 16.25%.

Fans fear that, despite the club's record of success on the pitch, the Glazers' leveraged buy-out of United has saddled the club with debt and that may mean that there is no spare money in the future to buy a new generation of star players.

Disappointed fans have launched the "green and gold" campaign that resurrects the original team colours in protest over the Glazers' ownership. Their numbers have reached 158,000 and former United star David Beckham has signalled his support.

They point to the £80m sale of star striker Cristiano Ronaldo last year and note that he has not been replaced by a player of similar quality. Yet ticket prices have gone up by more than a third. The club's management denies any lack of commitment to buying new talent and says that cash is available for Sir Alex Ferguson to buy players.

Negative equity

City analyst Andy Green, 37, is the disgruntled Manchester United supporter who first uncovered the extent of the Glazers' debts. Mr Green said: "They borrowed more money at inflated valuations right at the top of the cycle. "These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong."

The Glazers have defended their ownership of the team The debt levels at the club are also drawing the attention of other prominent football figures.

Dave Whelan, Chairman of Wigan Athletic, told Panorama: "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."

The Glazer family's main assets are the shopping centre business in America, First Allied Corporation, along with Manchester United and the Tampa Bay Buccaneers.

First Allied is a private business and its accounts are not publicly available. But Mr Green discovered that the Glazers' shopping mall mortgages had been bundled with other loans as Commercial Mortgage Backed Securities.

Those bundles are publicly traded and therefore require the Glazers to provide detailed information on all the mortgages, which are then publicly available in the US. Mr Green found mortgages - confirmed by the BBC - on 63 of 64 First Allied shopping centres, totalling £388m ($570m).

Most of those were taken out with Lehman Brothers before the US investment banking giant went bankrupt, triggering the global banking crisis in 2008.

'Watch list'

While Lehmans collapsed, the Glazers' mortgage debt lived on and many of those shopping centres are not generating enough income to keep up with interest payments. With falling commercial property values, many are also now in negative equity. Banks have put 28 of the shopping centres on a watch list, meaning they are worried about the loans. Four shopping centres - one each in Ohio, New Mexico, Texas and Georgia - have already gone bankrupt.

When they bought Manchester United in 2005, the Glazer family borrowed £500m and paid the remaining £272 million in cash. Mr Green found that the Glazers had remortgaged 25 of their shopping centres in the six months before the takeover.

He believes the family borrowed against their US properties to pay for United: "At the time when they had to present a huge amount of cash over here in the UK they borrowed a huge amount of extra money in the US and publicly they didn't buy anything else that year."

A spokesman for the family did not respond to questions about the mortgages taken out by First Allied.

But with properties now worth about £380m ($550m) but mortgages valued at £395m ($570m), the shopping mall company now appears to be worth next to nothing.

'Commercial expertise'

That financial picture has analyst Mr Green questioning how the Glazers will service their £1.1bn debt.

Fans are wearing green and gold in protest over the Glazers' ownership United chief executive, David Gill, has said: "We're very confident the business model we have in place will ensure the club can continue to compete at the top of football for many years to come.

"The owners have been true to their word since they took over the club in 2005. They've brought commercial expertise and commercial benefit to us in a numbers of areas, and we've seen our revenues grow significantly."

The Glazers' most troublesome debts are held by Red Football, the parent company that owns Manchester United.

They are payment in kind loans, or PIKs, worth £200m and the interest owing on them will soon rise to 16.25%.

Mr Gill told the BBC in January: "We don't worry about the PIK repayment. That's nothing to with the club."

A spokesman for Manchester United told the BBC last week that the club stands behind Mr Gill's assertion that the debts will be repaid without involving the club.

But sources close to the Glazers have confirmed that Red Football may use cash from Manchester United to pay off the PIKs in the future. The Glazers are said to be "comfortable" with the PIKs.

The situation at Manchester United reflects the wider issue within the Premier League, where clubs like Liverpool and West Ham are struggling with huge debts and FA Cup finalists Portsmouth barely staved off bankruptcy.

Both the Premier League and the FA declined requests for interviews on the subject of debt in football.

Panorama: Man United - Into the Red, BBC One, Tuesday, 8 June at 2235BST and then available on the BBC iPlayer

by **dawson99** » Mon Jun 07, 2010 1:59 pm

Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

by **lakes10** » Mon Jun 07, 2010 2:20 pm

dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

I did not know anything about it untill Bav posted about it the other day, I am not sure that Rafa going had anything to do with it apart from getting shot of a manager having a bad few years.

a lot of stuff happend in the last 24hrs of Rafa being our manager...bit like when MR Brown left....phone calls after phones and offers being turned down.

by **Reg** » Mon Jun 07, 2010 2:23 pm

dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

Sure makes sense, get the existing owners to do your dirty work prior to taking over and maybe thats why Rafa hasnt made a fuss, because he knew the new owners didnt want him and therefore he put the club before himself and bowed out.

Yes theres a logical explanation but no, I havent heard any rumours.

5 Live will have, of course.....

by **Ola Mr Benitez** » Mon Jun 07, 2010 2:25 pm

Reg wrote:
dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

Sure makes sense, get the existing owners to do your dirty work prior to taking over and maybe thats why Rafa hasnt made a fuss, because he knew the new owners didnt want him and therefore he put the club before himself and bowed out.

Yes theres a logical explanation but no, I havent heard any rumours.

5 Live will have, of course.....

god.. I hope that is true!

by **neil** » Mon Jun 07, 2010 3:14 pm

Reg wrote:.. therefore he put the club before himself and bowed out.

£6 million better off of course

by **jacdaniel** » Mon Jun 07, 2010 3:26 pm

neil wrote:
Reg wrote:.. therefore he put the club before himself and bowed out.

£6 million better off of course

better than 16

by **zarababe** » Mon Jun 07, 2010 3:26 pm

lakes10 wrote:
JohnBull wrote:Bleedin Flags !!!
FFS how many times have you got to chew something before you swallow ? It's done ! Shouldn't have been, but it's done.
If you're scouse you'd realise that we get the blame if we've done it or not. Live with it. It's over.

the thing is mate its not over in the view of the americans.
going by the ameican new forums (used for news feeds in american but open to others) they are very upset about it, Liverpool fans aare being called all sorts of names on them.

they dont see it as Anti G&H but only as anti american.

some are planing a mass event to burn liverpool flags and shirts. (some might think its a good idea to burn the old shirt due to who got the money from them lol)

the thing is that the image of the club in america has been hurt by this event.

they are also using it for the usa v england game coming up, saying that all england fans are skin heads looking for fights, photos of the burning flag have been sent to the american players in hope it pushes them to beat us.

there is hope, as there are a few brits that use the sites and they are tryingto get the amricans to understand it was not about the usa but only G&H but they dont understand why two dick heads should change the liverpools fans views on the whole of the usa.

Oh ffs.. who fu'kin care what 'they' think... if you destroy nations, ppl will burn yer flag.. surprise surprise.. if ya destroy institutions aka LFC, ppl will burn yer flag, BECAUSE IT DEFINES YOU.. AND YOU DEFINE YER SELF .

Our club is on turmoil and we are debating the burning of a flag.. where are the real LIVEROOOL SUPPORTERS - fu'kin show yer selves LAR !

by **jacdaniel** » Mon Jun 07, 2010 3:27 pm

dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

were are you hearing these whispers? I hope you're right!

by **tubby** » Mon Jun 07, 2010 3:27 pm

dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

Yeah heard something the other day. In addition supposedly a souce close to Carra said the takeover would happen soon or something to that effect. We have been here before though, time will tell. For the time being though we are still up shits creek without a paddle.

I can only hope this is true as it's the only possible way we can expect to keep our star players.

by **jacdaniel** » Mon Jun 07, 2010 3:30 pm

bavlondon wrote:
dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

Yeah heard something the other day. In addition supposedly a souce close to Carra said the takeover would happen soon or something to that effect. We have been here before though, time will tell. For the time being though we are still up shits creek without a paddle.

I can only hope this is true as it's the only possible way we can expect to keep our star players.

Any idea who it is? were they might be from even..

by **Ola Mr Benitez** » Mon Jun 07, 2010 3:42 pm

jacdaniel wrote:
neil wrote:
Reg wrote:.. therefore he put the club before himself and bowed out.

£6 million better off of course

better than 16

Its only 4 million if he get a job this summer which is very likely with Inters interest

by **neil** » Mon Jun 07, 2010 3:46 pm

jacdaniel wrote:
neil wrote:
Reg wrote:.. therefore he put the club before himself and bowed out.

£6 million better off of course

better than 16

Wasnt 16 for the all the Rafa backroom staff? everyone else is still on the payroll, no? I hope ALL the grubby parasites that have walked away from our club £millions better off all choke while we stare into the abyss. but thats just me though isnt it.

by **Greavesie** » Mon Jun 07, 2010 3:55 pm

neil wrote:
jacdaniel wrote:
neil wrote:
Reg wrote:.. therefore he put the club before himself and bowed out.

£6 million better off of course

better than 16

Wasnt 16 for the all the Rafa backroom staff? everyone else is still on the payroll, no? I hope ALL the grubby parasites that have walked away from our club £millions better off all choke while we stare into the abyss. but thats just me though isnt it.

it's definitely just you calling them parasites after all their efforts to make this club successful :no

first he was a tw@t for holding out for his £16m, he takes £6m and he's still a tw@t, do me a favour lad

by **tubby** » Mon Jun 07, 2010 3:55 pm

jacdaniel wrote:
bavlondon wrote:
dawson99 wrote:Has anyone else ehard we are VERY close to new owners, that will rival Cheatski, and Rafa going is all part of this?

Hearing a lot of whispers here

Yeah heard something the other day. In addition supposedly a souce close to Carra said the takeover would happen soon or something to that effect. We have been here before though, time will tell. For the time being though we are still up shits creek without a paddle.

I can only hope this is true as it's the only possible way we can expect to keep our star players.

Any idea who it is? were they might be from even..

No sorry

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