Glazers take out over £1bn from United

Manchester United remain in a relatively strong financial position compared to most other clubs, but fans are increasingly angry that their club continues to pay huge sums merely for the privilege of having the Glazers as owners states the Swiss Ramble.

United are the only Premier League club to pay dividends to their shareholders, mainly the Glazers. Since 2016 they have paid a hefty £166m, averaging £22m a year. Note: the high £33m payment in 2021/22 included including £11m delayed from 2020/21.

Although it has fallen from its (sizeable) peak, the £21m interest payment in 2020/21 was still the highest in the Premier League. United have now paid a staggering three-quarters of a billion pounds (£743m) in interest since the Glazers’ leveraged buy-out in 2005.

Focusing on the last 12 years, the £517m interest payment is nearly three times as much as the next highest club, namely Arsenal with £174m. Looked at another way, it is almost as much as the rest of the Premier League combined (£536m).

Even after all the refinancings, the £592m gross debt is virtually unchanged since the Glazers’ arrival. United’s debt was 3rd highest in the Premier League in 2020/21, but Chelsea’s £1.5 bln was provided interest-free by their owner (now written-off), while Tottenham Hotspur’s £854m funded a new stadium.

Regular visitors to Old Trafford will know that the venerable old stadium has seen better days, which is unsurprising given the Glazers’ lack of investment in infrastructure. Glazers apologists will point to the massive transfer spend, which is a meaty £1.4 bln since 2012, but the point here is that this is money the club has generated, not provided by the owners.

In fact, in the last 10 years, no owners in the Premier League have taken out more money than the Glazers have done at Man United with £154m (dividends £133m, share buyback £21m). In stark contrast, some owners have put in significant funds: Man City £684m, Chelsea £516m and Villa £506m.

:ack of success, despite the huge player spend, is also a damning indictment of the club’s recruitment skills. The amount of money wasted since Sir Alex Ferguson’s retirement is shocking. This is also the case with wages, especially in the last couple of years. wages for first 9 months of 2021/22 shot up to £288m, due to signing Ronaldo, Varane and Sancho, which works out to £384m on an annualised basis. This is in line with the club’s estimate of a 20% year-on-year increase to £387m, which would be the highest ever in England.

They have also been particularly poor at making money from player sales with their £81m profit from this activity in the last 5 years being firmly in the bottom half of the Premier League. For some context, Chelsea £413m is more than five times as much.

Falling commercial revenues

Supporters of the Glazers will point to their commercial acumen, in the belief that revenue growth has somehow justified the fact that the club has (to date) had to shell out well over a billion quid to finance the takeover, but is this really the case? It is certainly true that revenue has nearly tripled under the Glazers, rising from £173m to a COVID-impacted £494m in 2021, but it is worth noting that their revenue has dropped by £87m (15%) since 2017, one of the worst performances in the Big Six. United’s commercial engine has essentially stalled (revenue flat for 5 years before 2021 decrease), while there has been substantial growth at their rivals.

United have only qualified for this season’s Europa League, which will hurt them financially, as the Champions League is far more lucrative. Their relatively poor performance in Europe is highlighted by money in last 5 years with United earning €150m less than Man City and Liverpool.

The Swiss Ramble estimates that the Glazers have taken out £1.1 bn from the club (interest £743m, debt repayments £147m, dividends £166m, directors remuneration £55m & management fees £23m). Total cost to United rises to £1.6 bn if £465m share sales are included.

While under-performance on the pitch will have been painfully evident to United fans, they would be justified in being unhappy with the lack of financial progress in recent years, when they have also been eclipsed off the pitch by their rivals.

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The Political Economy of Football V2

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