da bet vitoria： Following the royal announcement that emerged late on Tuesday morning, the news that Manchester United’s owners, the Glazer family, are to settle their £220m Payment-in-Kind loans is unlikely to dominate bulletins in the way that New England Sports Ventures’ takeover of Liverpool did in October. Do the Glazers have a direct line to the Clarence House press office? It’s unlikely, and even if they did, wouldn’t they want their surprise announcement to gain as much exposure as possible rather than be lost amidst the stories about Will and Kate and the inevitable array of commemorative plates already being planned?
da bet sport： In truth, instead of pointing to the eventual resolving of the owners’ debt problems and those of Manchester United, the seeing-off of the PiKs raises more questions about the Glazer administration and addresses none of its problems. This is because nobody knows where the money has come from yet. According to a statement by Red Football Joint Venture Ltd (United’s parent company), they will “prepay 100 per cent from the outstanding loan on November 22.” Red Football Joint Venture Ltd do not have to reveal their funding because only Red Football, the club’s operating company, have to publish quarterly accounts, and the repayment of the PiK loans was made the responsibility of the parent company. It’s one of those peculiarities of business law with which the modern day football fan is becoming increasingly acquainted.
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The Glazers took out the PiK loans in 2005 when they bought United and, despite being renegotiated the following year, they had been tied to an intimidating interest rate of 16.25%. The fear, exacerbated by the terms of a bond issue in January, was that the Americans would take up their option to withdraw up to £70m from the club’s own accounts to help repay the PiKs. As the loans were taken out by the family and so were not the club’s official responsibility to repay, this clause permitting the Glazers to divert funds away from team restrengthening in order to lighten their own financial burden was what triggered the green and gold protests at Old Trafford in the second half of last season and saw the membership of the Manchester United Supporters Trust (MUST) swell to over 150,000. However, on the day that Manchester United’s quarterly accounts were published, the board were adamant that none of the club’s money had been withdrawn by the Glazers in this instance. As a caveat, the accounts do only cover the period up to September 30, but the board must be taken on their word.
Where else might the money have come from? The Guardian suggests three possibilities. The Glazers could simply have taken out another loan with which to repay their existing debts (the daytime television route). Another suggestion is that a small stake in United could have been sold to a third party. Finally, the owners could have traded in one of their US business interests, although this is deemed the least likely option.
Although MUST are promising to present the Glazers with a list of questions regarding United’s finances very soon, a clearer explanation of what is happening at United is unlikely to come easily if the Americans are under no obligation to say how they have managed to repay the PiK loans. The news that club funds can be ruled out appears to be positive but if the loans have merely been replaced in kind or paid off via an unnamed source of investment then the benefits to United of having the PiKs removed from the equation become less clear. Regardless of the repayment next week, however, the club’s gross debt, the legacy of the Glazers’ leveraged buyout, still stands at £509m according to the latest figures. That is a very slight reduction on the amount three months ago but nowhere near enough for United fans to start celebrating over.
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