SBD/Issue 184/Franchises

Glazer Family's Businesses Found To Be Nearly $1.6B In Debt

Group Of ManU Fans Uneasy About Amount
Of Debt Currently Being Carried By Glazers

Manchester United and Buccaneers Owner the Glazer family is $1.59B (all figures U.S.) in debt, $578.8M "more than previously known -- after borrowing extensively against their shopping mall business," and the debt "may threaten their hold on" ManU, according to Sweeney & Head of the BBC. Mortgage documents indicated that the Glazers have borrowed $570M against their shopping mall company First Allied Corp. and $95M against the Buccaneers. In addition, a portion of the Glazers' $1.01B ManU debt "will soon see them charged interest at a rate of 16.25%." A Glazer spokesperson said that the family "holds more than" $2.89B in assets. But Sweeney & Head noted the "extent of the debt owed by the Glazers is likely to fuel a continuing revolt by some supporters, who oppose their ownership of the club." Analyst Andy Green found the mortgages "on 63 of 64 First Allied shopping centres." Green said of the Glazers, "These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong." EPL Wigan Athletic Chair Dave Whelan added, "I don't think anybody can be satisfied with how Manchester United are being run. ... They have got somewhere in the order of three-quarters of a billion pounds worth of debt. That has got to be eliminated and eliminated quickly." But ManU CEO David Gill said, "We're very confident the business model we have in place will ensure the club can continue to compete at the top of football for many years to come" (BBC.co.uk, 6/7). The GUARDIAN's David Conn noted the prospectus that was circulated to potential ManU investors in January listed First Allied as the family's "only 'principal business interest,' besides United and the Bucs." Green's investigation into First Allied revealed that that business "has been seriously hit by the recession." Not all of the First Allied shopping centers "are in trouble; some are fully occupied and making profits." Conn: "Yet peeled back by this exposure is a fact acknowledged by the Glazers: their property business, recession-hit, is not the engine for the family's fortunes. It is the sports clubs they bought, United and the Bucs, which they believe will generate them cash and increased value" (GUARDIAN, 6/7).

GLAZERS RESPOND: Buccaneers Dir of Communications Jonathan Grella yesterday issued a four-paragraph statement in response to the reports, and in St. Petersburg, Rick Stroud notes the Glazer family's message "was clear." The statement indicated that the family is "not siphoning profits from its NFL team to offset debt of more than" $1B from ManU. The statement added that the Glazers' companies "generate revenues of $800 million a year and that each business -- including the Bucs and Man U -- is 'independent and self-sufficient.'" The statement: "Buccaneers fans should know that the Glazer family is as financially well-positioned as ever before. Companies they own generate revenues in excess of $800 million each year" (ST. PETERSBURG TIMES, 6/8). But in St. Petersburg, John Romano notes the statement "did not dispute Green's numbers," and it "seemed to acknowledge the loans secured against the shopping centers." The Glazers "have never denied that they took on debt when they bought" ManU, and what Green's research "seems to reveal is the debt is larger than anyone had imagined." Green: "I don't want to give the impression that they are about to go bankrupt. They have two very valuable sports franchises worth billions. The problem is they are sitting on a very large amount of debt." Romano writes the Glazer family should "try being honest." Romano: "The Glazers should show up at FanFest 11 days from now and actually answer unfiltered questions from fans" (ST. PETERSBURG TIMES, 6/8).

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