Bidders for Manchester United knew the club was saddled with sizeable debt when they entered the takeover race and likely learned more about the intricacies of the operation during their meetings at Old Trafford in March.
That situation was laid bare this week with the release of the club's second-quarter finance results for the three-month period starting December 31, 2022. No dividends were taken out but the club’s long-term debt stands at £535m, with cash reserves down to £31m from £87.4m.
No Champions League and the winter World Cup played a part but the news comes at a delicate time in the takeover process.
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With that now past its second stage, the road to a potential sale is coming to a head and by the summer, fans should know who is in charge of their club. Sheikh Jassim bin Hamad al-Thani and Sir Jim Ratcliffe are considered the frontrunners and will be fully aware of the Old Trafford financial picture. Indeed it would have been more eyebrow-raising to see a positive financial report.
But the current state of the club can be lent on by the bidders as a bargaining chip regarding a sale price. The Glazers reportedly want £6billion for United, with reports suggesting second bids from Sheikh Al-Thani and Ratcliffe fall considerably short of that at £4.5bn. Of course the aim will be to find some sort of middle ground and Ratcliffe is adamant he won’t dish out 'stupid' money for the club.
Fears remain that the Glazers will not sell if their valuation is not met, despite the leveraged buy-out loading debt onto the club in 2005. The huge deficit serves as a reminder to the difference between the then and now and with Old Trafford in desperate need of a revamp, there is plenty to spend on top of the asking price.
A huge amount of work needs to be done to redress the balance, let alone make United the world’s leading club again. Acquiring it is just the start for the buyers. Sheikh Al-Thani may wish to wipe the debt but that shortfall can provide leverage to lower the price, as it can to Ratcliffe.
It's hard to see a scenario where the Glazers get their asking price and the current owners only have themselves to blame.
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