BBC News - Manchester United debt hits �716m (original) (raw)

United's success in the league was achieved despite huge debts

Debts at the parent company of Manchester United have increased to £716.5m ($1.17bn), according to its latest accounts.

Red Football Joint Venture is owned by the Glazer family and secures its debts against the football club.

The accounts, for the year to June 2009, show United's debts passing £700m for the first time.

They also confirm that six of Malcolm Glazer's children were each given loans worth £1.67m from the parent company.

All are directors of Red Football, and such a practice is legal.

However Keith Harris, the head of merchant bank Seymour Pierce who has been involved in four Premier League club takeovers, questioned whether it was sensible.

"You would not expect directors to be borrowing money at a company of United's size," he told the Guardian newspaper.

"And, although it is now allowed legally, it is generally still frowned upon because it does not create a good impression of the directors' governance of the company."

Fan protests

The club's fans have recently protested against the Glazer's ownership.

After last week's revelation that the club was considering raising £500m through a bond issue to refinance its debts, supporters held up a banner saying "Love United, Hate Glazer" at Saturday's home match against Burnley.

Mark Longden, chairman of the Independent Manchester United Supporters Association, said then that United was being "driven to oblivion".

The accounts of Red Football Joint Venture also showed that more than £69m was paid out in interest alone over the year.

Despite the debts, the club turned a profit of £6.4m for the year.

This was a marked improvement on the £47m loss reported at the end of the 2007/08 season.

The accounts also show that player sales brought in a profit of £80.7m - the price paid by Real Madrid for Cristiano Ronaldo in the summer.