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Glazers' financial woes increasing

MANCHESTER UNITED’S owners, the Glazer family, have suffered further embarrassing financial difficulties after four more of its…

DAVID CONN
Wed Aug 25 2010 - 01:00

MANCHESTER UNITED’S owners, the Glazer family, have suffered further embarrassing financial difficulties after four more of its US shopping malls recently fell into default on their mortgages.

With the interest rate charged on United’s enormous “payment-in-kind debts” rising from 14.25 per cent to 16.25 per cent this month, the news could hardly come at a worse time.

An investigation by the Guardian in conjunction with BBC’s Panorama programme and the investment analyst Andy Green found that of the 68 shopping malls owned by the Glazers’ US-based First Allied Corporation, four had gone bust and one more had defaulted on its mortgage.

An analysis of the malls’ most recent financial disclosures has revealed that four more have since failed to pay their mortgages and become classified as “delinquent”, with two falling into default this month.

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That means nine, or 13 per cent of the Glazers’ malls are now “delinquent” or insolvent, and a further 29 centres, 43 per cent, have so many units empty the rental income does not cover the mortgage payments.

First Allied is the only significant business the Florida-based family runs besides Manchester United and the Tampa Bay Buccaneers NFL franchise, and the bank disclosures show it making income above the malls’ running costs of only US$9m a year.

These disclosures come at a particularly sensitive time considering United’s own debts. The interest rate increase took effect this month, according to the most recent accounts filed by one of the Glazers’ United companies.

According to Red Football Joint Venture Limited, the accounts for the year to June 30th, 2009 recorded that United’s total bank and other borrowings had swollen to €871 million, all of it derived from the Glazers’ original personal borrowings to buy the club in 2005.

Green said the latest disclosures from First Allied were a cause for further concern. “They show that the Glazer family’s only significant other business is making almost no money, and certainly not generating the cash to reduce United’s massive debts,” he said.

Guardian Service