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Blog: Man Utd debt problems show similarities with Liverpool

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By John Baines

Saturday 09 October 2010

It’s not often that Manchester United should be glad to be upstaged by Liverpool, but John Baines believes that this year there should be a Christmas card on its way from Old Trafford to Anfield.

Apart from a ‘What’s wrong with United?’ spread in the Manchester Evening News, United have managed to slope off into the international break without having every nook and cranny of their ordinary start to the season dissected by all and sundry.

After another unconvincing display at Sunderland, the Sunday papers began to get their teeth into the Reds, but just as the roast was being digested and Songs of Praise was starting, Monday’s pre-planned post-mortem’s of Sir Alex Ferguson’s side had been scrapped, with daggers drawn towards Roy Hodgson’s shambolic outfit.

Defeat to Blackpool, which left the Anfield club lingering in the relegation zone, was a Sports Editors dream. The furious reaction of the Liverpool support, coupled with calls for Kenny Dalglish to be brought back as manager - all on top of the takeover saga – meant any stinging criticisms towards the Manchester reds were tucked away conveniently in the middle of the supplements. Out of sight, out of mind. Crisis? Where?

So it’s all groovy on the playing front at O.T. and if you look hard enough, below all the mentions of New England Sports Ventures, administration and High Court cases, you might dig out news about United’s most recent financial figures released today.

Triumphantly boomed out to the media was the fact that United had become the first English club to break through the £100m profit barrier. Operating turnover was £286m – dwarfing neighbours City’s £125m recorded last week – and details of increased income from new media, broadcasting, sponsorship and commercial deals were told.

However, whilst those numbers reinforced the immense and ever expanding earning potential of the club, the sums were the silver lining round the cloud. The overall balance sheet actually showed a net loss of a hefty £83m, with virtually all of that in relation to the methods of the Glazers initial acquisition.

Whereas Hicks and Gillett were siphoning off £27m per annum to service their interest payments, the Glazers effortlessly trumped that by paying back lenders approx £40m in club funds. There were more large one-off payments shelled out as part of the controversial bond issue which was launched in January, and almost £20m was lost due to a downfall in interest rates.

Whilst the clubs top brass will try to paint a rosy picture of the healthy situation United find themselves in given the gains, these figures will further enrage fans who believe that too much of United’s vast income is being taken out of the club, and used to pay off the huge debts accrued by the Glazers. More in depth details of the finances are to be published shortly, where the full extent of the Red Devil’s debt will be made clearer.

The issues affecting both clubs are very similar yet have hit Liverpool harder because of their reduced earning capacity of their great rivals. But, in essence, the ownership issues are the same, and money earned by both institutes on the back of decades of history, tradition and success, is being removed to essentially, in the long term, increase the wealth of a load of wealthy Americans. The whole existence of both clubs, whilst unlikely they will ever cease to exist, is being jeopardised as they are being used as a cash cow by these businessman.

It may be rich to prophesise about money being taken out of football while there is so much money in it, and, how much do Manchester United and Liverpool care about Stockport and Tranmere? But, what rights do people with no association or affiliation have to rob money so many people have contributed to the cause?

The value and prestige of both clubs has been created by an unthinkable amount of people through countless generations. The modern day articles may have been shaped by the dynasties of Ferguson and Busby, Shankly and Paisley; been glorified by the Ronaldo’s, Gerrard’s, Beckham’s, Fowler’s, Robson’s, Rush’s, Best’s and Keegan’s to name but a few. But the club’s have been made and immortalised by the unnamed and the unknown.

From the millions of fans to the kit-men and tea ladies. From the stewards and secretaries to the caretakers and cleaners. Those people whom down the years have put in an extra hours work, gone that extra mile, done that extra deed, spent an extra few quid. All that contributes to what a football club is about and all have contributed to what is now mercilessly being taken out.

That’s what these moneymen need to realise, but probably never will do.

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By john on 11 October 2010 at 08:16

To me the major problem highlighted by this, are the business rules that are in place to allow all this to happen. I also assume that these are the same, or similar, rules that allow other companies from other industries to be asset stripped. Where was the due dilligance - non existant as usual- The truth is if I had the ability to go to the banks and borrow sufficient funds I could have bought United and then, totally legally, dumped the debt onto the club. The main difference, if I am correct, was that United being traded on the LSE were required to let the Glaziers offer a bid for the remaining shares once they had obtained sufficient number to force this - just like any agresive buyout - whilst Liverpool were sold by the owners? Good a manager as he has been Sir Alex and the Rock of Gibralter stud arguement are behind all this. I believe they would never have sold but for that. If the Rock owners were ever true United fans wonder what they are thinking right now. Why not do the journalist thing and try to get an interview?

By Anthony P on 11 October 2010 at 01:25

I am a liverpool supporter and for this to happen is a shame, they should just sell the club with out hesitation so that liverpool can beat Man UTD and have a spot in the top 7....

By Anthony P on 11 October 2010 at 01:25

I am a liverpool supporter and for this to happen is a shame, they should just sell the club with out hesitation so that liverpool can beat Man UTD and have a spot in the top 7....

By James on 10 October 2010 at 21:50

Very valid points John. I'm from Australia and am a devoted united fan! To see the American owners do what they have done to the two most successful clubs in English football is beyond me. Tradition doesn't seem to be in their business model. Ethics do not apply to them and is not even in their vocabulary! What throws me is that only the success of these two clubs hd brought interest from overseas "investors".. Had these clubs not have been so successful, I wonder if they would have shown the same interest.. Answer is a no! Oust them before these two giants in the English game become the modern day Leeds FC (no disrespect to Leeds intended)





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