Glazonomics

Glazer sums ‘fail to add up’ [BBC]

Malcolm Glazer’s vow to fund Manchester United boss Sir Alex Ferguson in the transfer market has been questioned by a leading business academic.

United are the world’s richest club, with an income of £171.5m but Glazer’s takeover cost £790m – a large part of which was borrowed.

The Glazer family borrowed £265m from bankers JP Morgan, plus an additional £109m in other bank loans.

However, in two years’ time the Glazers will also have to make repayments on complicated financial instruments known as hedge funds, which have provided £275m for the takeover.

“Glazer might have some scheme to pay off these debts but I can’t see where the money is coming from for the transfers.

“It’s difficult to see how they could a sign a player of the calibre of Wayne Rooney. The only way they could do that is to ask to increase their debt – but would they find a bank willing to lend them more money?” [said Jonathan Michie, director of the Birmingham Business School].

“The only way to make cash available for transfers is to increase ticket prices, which, at best, will price many supporters out of the ground, replacing them with more affluent spectators.

“Even with ticket price rises, it is not clear whether they will be able to remain solvent in year three of their business plan and beyond.”

Folly, folly, Man United……

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