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Fittingly given the photo we featured here yesterday, United supporters who remain dubious about Malcolm Glazer’s purchase of the club continue to be vocal about their concerns. MUST, the Man United Supporters’ Trust, issued a statement that you can read on the Man United fanzine the Red Issue’s website calling the debt issue a “time-bomb.”
Despite appearances to the contrary, the Glazer family continue to face an extraordinary and growing debt problem. Since last year’s debt refinancing, United and the Glazers have been faced with a series of interest rate rises which have increased the annual debt service bill from £62m a year on the total debt of £660m.
The interest bill is currently an annualised £100m-plus, of which £73m is payable this year and the other £27m in the future — a ticking debt time-bomb.
Tellingly, MUST link the debt to the recent turmoil in global financial markets, which they argue make it likely that time-bomb could go off sooner rather than later. And in the meantime, it’s the fans picking up the cost.
The recent and continuing turmoil in financial markets has not only forced the Glazers to postpone indefinitely any further refinancing but has also seen the six-month LIBOR rate (the variable inter-bank lending rate to which the United debt is undoubtedly tied) increase to almost one per cent above the bank base rate.
Today it stands at 6.69 per cent, driving up the annual cost of servicing United’s debt to painful pre-refinancing levels. No wonder, for the third season running, the Glazers forced the club to pass on this eye-watering extra finance cost to the fans by way of a 14 per cent ticket price rise.
The Glazers, of course, could not let such claims stand unchallenged, offering a rather pithy response:
The debts continue to be comfortably serviced by the business, which is performing better than ever.
As always there have been substantial funds for the manager to purchase players over the summer.
If the Glazers really want to ameliorate the concerns of supporters, though, they’d be better off challenging MUST’s complains in their damning specifics rather than offering bland statements such as the above. Whilst it’s their business and their prerogative not to do so, such a stance only makes it more likely that greater numbers of United fans will vote with their feet and go and watch FC United instead, especially if MUST’s worst nightmares come true.