The bid by the Red Knights consortium for Manchester United has been shelved after the Glazers attached a £1.5bn price tag to the club. The consortium was thought to be prepared to offer £850m to £1bn. With Sir Alex Ferguson’s future uncertain, little money spent recently on players and debts increasing the club did not look that attractive.
The bid by the Red Knights consortium for Manchester United has been shelved after the Glazers attached a £1.5bn price tag to the club. The consortium was thought to be prepared to offer £850m to £1bn. With Sir Alex Ferguson’s future uncertain, little money spent recently on players and debts increasing the club did not look that attractive.
In any case, alongside the third quarter figures, the Glazers had issued a defiant statement saying the club was not for sale ‘and the owners will not entertain any offers.’ At Liverpool, fan pressure has encouraged the American owners to seek an early exit, but the financing of their debt is far less secure. Manchester United has stated that 2010/11 season ticket and seasonal hospitality sales were in line with previous seasons, suggesting that the boycott proposed by the Supporters’ Trust is having a limited effect. In an interview chief executive David Gill described the green-and-gold scarf demonstrations as a ‘visible minority’ that would ‘go away’.
The results showed that third quarter revenues increased 4 per cent to £74.6m as commercial turnover rose 11.6 per cent year on year to £19.3m. Media revenues rose 9.4 per cent to £21.3m, helped by an increase in television income for the Champions League. Earnings before interest, tax, depreciation and amortisation fell 10 per cent to £23.1m.
The holding company for the club, Red Football, disclosed a loss of £40.7m related to interest rate swaps linked to previous bank debt. This was £5m worse than suggested in the bond prospectus issued earlier this year. Fluctuating interest rates between the sterling and the dollar have resulted in an additional £19.2m loss since the club launched their bond issue in January. The club’s overall debt is understood to have risen from £716.5m to more than £730m.
The Glazers have yet to use an option to take £70m out of the club to pay down the payment-in-kind notes which they hold. It is understood that cash reserves of £95.9m will be made available to Sir Alex Ferguson to spend on the transfer market this summer rather than being used to reduce the £212m payment-in-kind loans.