The true extent of the Glazer family’s astonishing impact on Manchester United will come home to roost over the next seven years, reports the Daily Telegraph. The family, currently marketing a £500 million bond issue debt swap, will drain £600 million from the club in interest, management fees and dividends before the bond matures in 2017.
“Analysis of the £500m bond prospectus distributed to investors reveals that in addition to annual interest payments of more than £300m the Glazers can take a guaranteed £160 million in dividends, one-off payments and fees out of the club,” states the Telegraph.
“The device allows the Glazers to take a dividend equal to 50 per cent of net cash profits, as long as gross profits are more than double the interest paid figure. If, as the Glazers forecast in the prospectus, income continues to grow at Old Trafford, over the seven-year life of the bond the total dividend could reach more than £140m.
“This comes on top of about £260m in interest payments already paid since the Glazers bought the club in 2005, and a further £23m already taken in fees and personal loans to the six children of Malcolm Glazer who sit on the club board.
“The Glazers are expected to use the dividends to pay off payment-in-kind loans that stand at £200m but, accruing rolled-up interest at 14.25 per cent annually, are set to grow by £30m this year.”
United will pay annual interest on the bond of at least £45 million if priced at nine per cent, although some City analysts have urged the Glazer family to push up the yield. Each one per cent increase in the interest rate will cost the club a further £5 million per year.
The total interest payable on nine per cent is £315 million. Additionally the family intends to remove £70 million in cash immediately plus a further one-off dividend of £25 million, annual ‘management’ fees of £6 million per board member plus further fees detailed in the 322 page prospectus being hawked around the City.
United supporter groups have urged further action against the Glazer family, including a protest at tonight’s match with Manchester City, late entry to the ground for the club’s Champions League fixture with AC Milan and the symbolic donning of United’s old green and gold colours.
“It is a shocking picture. These are immense amounts of money being leaked out of United to pay banks, lawyers, the Glazers themselves and interest, to pay for a takeover none of the supporters, or the United board itself, wanted,” said Duncan Drasdo, chief executive officer of the Manchester United Supporters Trust.
“United’s success and profits could have been used to keep ticket prices affordable or invest in the team but instead we see this heartbreaking waste, just because one family ultimately hopes to make a profit from the club.”
The sheer size of cash draining out of United’s coffers over the next seven years means that any spending undertaken in the transfer market by Sir Alex Ferguson can only be from further debt. Ferguson, who has consistently claimed he has money to spend, will almost certainly be shopping in the bargain basement for years to come.
Do something about it today:
- Wear Green & Gold as an anti-Glazer a symbol
- Become a member of the Manchester United Supporters Trust
- Join the Independent Manchester United Supporters Association
- Sign-up to the Glazer Out Facebook Group
4 thoughts on “Glazers will take £120 million next year; £600 million in seven years”
Please we the fans are the only ones who can see them off as even SAF seems not too concerned.lets refuse to attend games till they leave.
when do the glazers expect to pay off the debt?
do they even know? do they even plan to pay it off eventually or just sell the club on to some other leeches?
green and gold idea is a cracker if it takes off and people understand that it is anti-glazer
viva barca. we can only dream…