The club has been saddled with debt since the leveraged takeover in 2005 but the owner insists it does not affect plans to sign big-name players
Manchester United co-chairman Joel Glazer has defended the club’s level of debt and dividend payments to the owners and insists it has no impact on transfers.
The Glazer family have been heavily criticised during their 16 years in charge and one of the reasons is that their leveraged buyout of the club in 2005 landed the club with millions of pounds worth of debt.
In addition to that, they have continued to pay themselves dividend payments worth over £100 million during their tenure of ownership, but Glazer defended their actions to supporters at a Fans’ Forum meeting last week.
What was said?
Initially, Glazer, who was attending the meeting for the first time, was asked about why they take their dividend payments.
“I know this is a subject that a lot of people have a lot of different views on, but when we take things and look at things as a whole, we think that Manchester United is a very well run club,” he said. “We’re able to spend with the top clubs throughout Europe, whether it’s wages or transfer fees, we’ve been able to keep our ticket prices low, we’ve not increased them in over 10 years.
“We’re able to pay a dividend but it’s a modest proportion of our five to six hundred million pounds of revenue; it’s less than three per cent of that.
“It has never stood in the way of us pursuing players or transfers on the pitch. We may have walked away from transfers at times because the other side wanted an outlandish number. And while it’s easy to pay it that one time, it does have consequences.
“You do it once and the next person expects it, and then the next person expects it. And that’s not good, ultimately, for the club. So, we think that we’re able to accomplish all these things and still have a very, very successful club and invest, and do everything that’s necessary for a club of our stature.”
What about the debt?
The next question from one of the representatives on the forum was about the level of debt and why the money they take out could not be used to pay part of that off.
“I know this is clearly another area that has got a lot of discussion and debate over the years. We think we have a very comfortable position when it comes to this. We have debt, but a lot of other clubs do have debt as well,” Glazer explained.
“We pay a very low interest rate, mostly fixed interest debt. So, if interest rates went up it would not affect us, but we had made progress in reducing our debt over the last several years.
“The net debt was meaningfully reduced a couple years ago. Unfortunately, the pandemic hit and we have had to use a lot of our cash reserves because we didn’t have any supporters in the stands, we didn’t have the matchday revenue, and that has affected us, like it’s affected all the clubs throughout Europe. The difference is we’ve been able to keep investing. We’re strong.”
Throughout a lengthy response, the club’s co-chairman also pointed towards the fact they did not furlough anyone and pledged investment in their ‘big plans’ for the training ground and stadium.
He added: “We’re going to keep investing on the pitch, which we did last year, and we plan on doing it meaningfully this year. So, we feel that we’re in a good spot. There’s always headline numbers [for the debt], and then there’s the real costs on an annual basis and, again, it’s never affected our ability to operate in the transfer market or do anything else with regard to the club.”
How did the meeting go?
Glazer attended the meeting for the first time to address fans’ concerns about Manchester United’s involvement in the proposed European Super League and the way the club is being run.
The American-based owner spent over two hours on the virtual meeting during which time he repeatedly apologised for a previous lack of communication and the ill-fated ESL proposals. A supporters share scheme was also put forward in addition to a fan advisory board to promote better communication.
Sources told Goal fans felt cautiously optimistic following the meeting and are hopeful the owners will follow through with their pledges.