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BBC Panorama Documentary Exposes Glazer Family Debt at £1.1bn

 BBC Panorama Documentary Exposes Glazer Family Debt at £1.1bn

The Glazer family are in the news yet again for all the wrong reasons as BBC Panorama has found evidence exposing the Glazer family debt at £1.1bn, which is some £400m more than previously thought. After borrowing extensively against their suffering shopping malls in America, the Glazer’s hold as owners of Manchester United must surely be threatened as the recently quieted green and gold protest led by MUST will surely gain more steam in the upcoming weeks and months.

The BBC documentary uncovered financial documents stating the Glazers have borrowed £388m against their American based malls, under the name First Allied Corporation, and £66m against the NFL franchise Tampa Bay Buccaneers. The £700m debt directly attributed to Manchester United will soon bare an interest rate of 16.25%, a staggering number considering the cost and investment needed to run a football club.

As fan displeasure continues to grow, anxiety and dread over future investment to better the club stays at the forefront of United supporters’ thoughts. The mounting debt is drawing concern from all over the globe. From Tampa Bay Bucs fans, non-Premier League supporting Americans and other Premier League figures such as Wigan chairman David Whelan, (he recently revealed he almost bought Manchester United for £11m twenty years ago) who was quoted in the Panorama documentary stating, “it’s unsustainable, the debt in the Premier League“.

Manchester United management continue to stick with their guns by saying the money is there to spend, if the right player comes along for the right price. Upset United supporter and City analyst Andy Green first uncovered the extent of the Glazers’ debt and believes, “These are people who tell us not to worry about Manchester United debt because they are great businessmen. In their core business in the US they got it absolutely wrong.”

Green’s discovery came when he figured out the Glazers’ mortgages for First Allied Corp (the malls and shopping centres, which are private and records are unavailable to the public) had been bundled with other loans as Commercial Mortgage Backed Securities, which are publicly traded and require detailed information that the Glazers must provide. Green found these such mortgages on 63 of the 64 First Allied shopping centres totaling the previously stated £388m. Four of the shopping centres have already gone bankrupt due to insufficient revenue growth and inability to keep up with interest payments. A sign that more could soon come?

The financial picture that has been painted by the Glazers’ brush has Green wondering how they’ll survive the mounting £1.1bn debt. Also painted in the same canvass are the payment in kind loans, or PIKs, which are owned by Red Football, the parent company who owns Manchester United. The loans are worth £200m and will soon have an interest rate of 16.25% attached to them.

United chief David Gill stresses that the PIK loans have nothing to do with the club itself. “We don’t worry about the PIK repayment. That’s nothing to do with the club”. However, sources close to the Glazer family have spoken of Red Football’s intentions to possibly use cash from the club to help pay off the PIKs. The Glazer family states they’re “comfortable” with the loans.

Ultimately, the situation with the Glazer family represents a large and spreading problem with clubs such as Liverpool, West Ham and Portsmouth in the Premier League who mount such large and unsustainable debts – some barley fighting off bankruptcy.

The BBC Panorama documentary, Man United – Into the Red can be viewed in the UK using the BBC iPlayer. The show itself originally aired Tuesday, June 8th and has received mixed results. A recent tweet from The Times Oliver Kay read, “I don’t want to accuse Panorama of dumbing down, but…..#MUFC documentary not living up to the hype. Sorry”

Feel free to leave a comment letting others know your thoughts about the documentary and the Glazer family’s debt.

Clips from the BBC Panorama videos can be viewed by anyone in the world at:

This entry was posted in General, Leagues: EPL and tagged , , , . Bookmark the permalink.

44 Responses to BBC Panorama Documentary Exposes Glazer Family Debt at £1.1bn

  1. Red Nose says:

    Love Glazer, hate United

  2. McBride says:

    I hope a debt-less British investment group buys United and the team starts finishing 4th and 5th in the league.

    Folks in Manchester don’t seem to have a clue what professional sports are all about.

  3. bradjmoore48 says:

    Jesse – I’m interested in viewing this documentary, how can you view this stateside (from what I remember, you can’t use BBC iPlayer for tv viewing outside the UK)? Any legal means to watch this in the US? :-)

    • The Gaffer says:

      Brad, I updated the story and added three links at the foot of it to clips from the BBC Panorama series.

      These work for US visitors, too.

      The entire episode of Panorama will not be available to us in the States, though. The only way to see it would be through illegal download means, which I do not recommend.

      Cheers,
      The Gaffer

    • Jesse Chula says:

      brad,

      unsure at the moment. The Gaffer will most likely read the comments, so let’s hold tight and see if he can shed some light on the situation.

      I’d love to watch it myself.

    • Devils Advocate says:

      brad..I live in the UK and watched the Panorama program. I would be happy to fill in any gaps left from the article. Needless to say, the revelations in Panorama have provided more shocks for supporters of football in England but more specifically United, namely:

      1 Cost of PIKs alone to rise from £45million to £80million per annum
      2. To date, £426million has been paid in interest and “fees”
      3. Under the terms of the £500miliion bond issue, the Glazer family are allowed to take up to £100million this year alone.
      4. The £300million originally invested from the Glazers in 2005 appears to have been borrowed from their shopping mall empire.
      5. 63 of their 64 Malls are mortgaged and are currently on a “watch” list given 4 of them have gone to the wall with a reported loss of $4million.
      6. Tampa Bay Bucs are currently $100million in debt and struggling to attract the best talent due to constraints on pay.

      The Glazers declined to be interviewed but a spokesman responded by saying they were “comfortable” with an estimated £1.1billion debt given asset base of £2billion. Given the portfolio, having a debt to asset ratio of 50% in the current economic climate is very risky!

  4. Fool, So you’re saying Man Utd have only started to win thing since the Glazers took over (roll eyes)? Let’s not count god knows how many premier league titles and champions league titles before the Glazers came to the club. I think I’m right in saying that they managed to win these titles with the club being debt free as well.
    Well done McBride, you confirm just how f**king stupid most Americans are.

    • McBride says:

      And you’ve confirmed the poor reading comprehension of at least one non-American.

      I never said United started winning when the Galazers arrived.

      • ‘I hope a debt-less British investment group buys United and the team starts finishing 4th and 5th in the league.’

        Does the above not imply that debt free Man Utd would slip down the table and start to finish 4th or 5th?

        Money talks in England. We do not have the safety net of a club remaining in the top division no matter how shit they are or whether they even manage to win a game. The worst club in the league does not get first pick of the best player the following season.
        If you come bottom in our league, you go down and you get f**k all

        • McBride says:

          “Does the above not imply that debt free Man Utd would slip down the table and start to finish 4th or 5th?”

          No. It does not.

          The post referred to my desire that a new, non-American ownership group would buy the team and that it would then face a stretch of hardship. That is not to say the recent successes are due to the Glazers or that removing the Glazers would cause this hypothetical downturn.

          My irritation with United fans is that over the last five years they have complained first about the nationality of their new owners, then about the rumored financial difficulties of said owners, all the while seeming to ignore the fact the product on the pitch is as good as it has been during any period of club history.

          United fans have a team that wins as often as any club in the world. They should shut up and be happy about it.

          • ‘United fans have a team that wins as often as any club in the world. They should shut up and be happy about it.’

            The point is they already had this, they just didn’t have the 800 million pound debt to go with it.
            If a club is struggling to pay its debt then it sells its assets and for a football club those assets are players.
            We have already seen Ronaldo go, is it Rooney this season?

          • tonyspeed says:

            You nationalistic donkey. no one cares about their nationality. they staged a buy-out with borrowed money and then saddled the club with debt. If we fail to pay that debt both the training ground and old trafford could be taken by the bank.

            The only reason their nationality comes into play is that as non-english citizens, their loyalty to the legacy and history and grandeur of manchester united is in question. To them this whole thing is a business deal. To United Fans though their actions are completely out of order.

          • Devils Advocate says:

            Concur fully with Poker Rakeback and tonyspeed here. The nationality of the owners is irrelevant. Fans would be equally furious if an English purchaser had saddled the club with monumental debt, having not invested a single penny of their own money as it now appears. To then draw income to the tune of £10million in one year alone from what is the world’s most indebted football club merely rubs salt in the wounds.

            The Glazers have no concept of the fact that they bought an institution, not just a football club. They were asked by the British Government to take heed of the culture and traditions that are so much a part of English football. They have paid lip service to these requests.

  5. UpTheBlues says:

    Long live the Glazers!
    Glazers for president!

  6. Eric Altshule says:

    Not to rain on anyone’s parade of hate, but the documentary shows that the Glazers have $1.1 billion worth of debt against $2 billion worth of assets. Considering that much of their holdings are in real estate, that is pretty normal for that kind of business. Every major real estate operation carries debt, and if their assets are down to $2 billion at the bottom of a giant real estate meltdown, they are not in any serious trouble as a financial institution.

    I am no expert in this sort of thing, but in a casual reading of a couple of internet articles, it seems that Donald Trump has a higher debt-to-asset ratio, and nobody thinks he is going bankrupt any time soon.

    • Devils Advocate says:

      Eric..I would imagine the interest on Trump’s loans are significantly lower than those of the Glazers. The interest rates on the £228million PIK loans alone are due to rise to an alarming 16.25% in the very near future, raising the payments from the current £45million to £80million a year.

      I would also hazard a guess that Donald Trump’s loans are not on the “watch” list, unlike those that cover the 63 mortgages used to secure the Glazers’ Mall empire, the debt here being some $570million. A 50% debt to asset ratio (currently) but very different circumstances.

  7. loveglazers says:

    Love Glazers

    Hate United

    No sympathy for United fans. Glazers bought them 3 titles with that debt… where were their whining during the good times?

  8. Patrick says:

    Funny thing is, the Tampa Bay Buccaneers spent the least ammount on salary our of all NFL teams last year and are still in the bottom 3-5 for salary.
    Everyone knows the Man U dilemma so I won’t beat the dead horse anymore.

    I just don’t understand why they don’t sell some assets and refocus their efforts on one venture instead of failing in 3 areas.

  9. bradjmoore48 says:

    Not sure if this will mean much in the long term, in case there is a late rush, but as of now, only 1/3 of Man U’s season ticket’s from last year have been renewed (18K renewed now, down from 56K last year), as the deadline approaches. The Glazers are “shocked.”

    http://www.mirrorfootball.co.uk/news/Glazers-shocked-as-Manchester-United-season-ticket-renewals-plummet-amid-talk-of-boycott-article453961.html

  10. McBride says:

    “You nationalistic donkey. no one cares about their nationality. they staged a buy-out with borrowed money and then saddled the club with debt.”

    Well a fellow named Christopher Harris who runs a site called . . . let me see, ah, here it is . . . epltalk.com told the New York Times in 2008 that: “A lot of it was just anti-American feelings that many Brits have but don’t openly discuss.”

    This Harris fellow (great website by the way, Tony, you should check it out some time) pointed out to the paper that:

    “not long after Glazer began accumulating his stake, a Russian oligarch named Roman Abramovich — said to be among the richest people in the world — bought another top E.P.L. franchise, Chelsea. There was nary a peep from its fans.”

    So I’d say that yes, the nationality of the Glazers did play a role in the United fans’ anger. It’s not just that they aren’t English.

    • tonspeed says:

      and i should beleive chris gaffer because he is god? because he represents the british people? because he is a foremost authority on british thought? because he is an infallible judge of situations? that he is completely unbiased and neutral? in that case, he is in the wrong profession. he needs to be emporer of the world.

      the facts are what the glazers have done. regardless of how it started (and it started negatively as well http://en.wikipedia.org/wiki/Malcolm_Glazer_ownership_of_Manchester_United) the facts are evident to all. so you can stop feeling stereotypically that “every hates us cause we’re american” and start realising that everyone hates the glazers because they are douches with no interest in manchester united or associated football for that matter. they have taken uneccesary risks and are endangering manchester united. portsmouth is the case in point. not only that, but uefa is endangering their champions league participation as well. sure, it’s just a warning shot over their bow, but who knows if the next bullet will really hit. But, just as always, the man utd fans will be here to rescue her from the ashes. Munich…Glazers…what next?

    • Devils Advocate says:

      McBride…you have completely missed the point here and given the tone of your entry I’m not even sure you’re being serious. But on the assumption you are, comparing Abramovich to Glazer is akin to comparing chalk to cheese.

      In the first place, Chelsea were in need of investment to stave off financial uncertainty and impending debt and to rebuild the club after the departure of Ken Bates. Abramovich, a self-confessed football fanatic, is a benevolent benefactor who funds the club direct from his own resources in the form of low interest or interest free loans. It’s hardly surprising then that the Chelsea faithful welcomed him with open arms. Chelsea’s fortunes lie not then in the hands of a variety of bankers.

      United, by comparison, were one of a handful of clubs completely debt free, making profits and with a proven track record of success. They were already deemed to be one of the world’s great clubs with a global fan base to match. Glazer’s hostile takeover of the club was opposed by the majority of supporters from the outset. The rest is history and I have no desire to repeat myself over and over on this.

      In closing, I’m sure Chris Harris is not wrong if he notes resentment of sorts being levelled against the Glazers but rest assured, had the owner been English and acted in a similar fashion, he too would have been vilified. I repeat myself once again, this is not anti-American, this is anti-debt. Regards

      • McBride says:

        “I repeat myself once again, this is not anti-American, this is anti-debt.”

        Repeat yourself all you want. The anti-Glazer sentiment began before the particulars of the purchase were known.

        Fans were furious a “greedy twat” American had taken over their team and were burning him in effigy before the word debt ever came into the picture. Some United fans interviewed said they didn’t want the team run by an American who didn’t understand the history and tradition of the sport.

        • Devils Advocate says:

          “The anti-Glazer sentiment began before the particulars of the purchase were known.”…I know this not to be true but I’m sure you can put me right by providing a credible, official source as opposed to conjecture..right?

          Ironically, the term “greedy” has been used both sides of the Pond and was also levelled at the Glazers by officials of the hard pressed Tampa Bay Bucs, your own countrymen. It seems the honeymoon period there died a death some time ago with the Buccaneers feeling used and side-lined in the wake of the United deal.

          But I have no doubt there are many Man Utd fans who vilify the Glazer family for their actions and conduct over the past 5 years. If you look at the situation objectively you may come to accept that the arguments and views of life long supporters have merit.

          Might be worthwhile researching before passing comment.

          • McBride says:

            “I know this not to be true but I’m sure you can put me right by providing a credible, official source as opposed to conjecture..right?”

            According to Albion Road:

            “Ever since Malcolm Glazer acquired his first Manchester United shares in mid-2003, there has been an undercurrent of disquiet amongst the Manchester United faithful, who have seemed deeply distrustful of the American tycoon from the very start.”

            So I guess the fans were distrustful in ’03 because they guessed two years he would borrow money to take a controlling interest in the team? He didn’t borrow money to buy the small stake in ’03.

            And I’ve never said I thought the “arguments and views” of the anti-Glazer contingent don’t “have merit.” If the way the Glazers are running the team isn’t sustainable they have every right to protest. I just don’t believe this situation is 100 percent related to debt.

        • Devils Advocate says:

          According to Albion Road:

          “Ever since Malcolm Glazer acquired his first Manchester United shares in mid-2003, there has been an undercurrent of disquiet amongst the Manchester United faithful, who have seemed deeply distrustful of the American tycoon from the very start.”

          Interesting point but the article focuses on the facts of the buyout and its potential consequences. The fact that the buyer is American is merely detail for editorial purposes. Having said that, I’m sure you can’t have failed to notice other comments made in that same article including but not exclusively:

          1. “The legacy of the Glazer takeover is debt”…using the assets of the club to safeguard the debt, rather than his own personal wealth”.
          (Panorama reveals that the £300million originally “invested from the family’s own pockets” was, in fact, a series of loans, secured against the shopping mall empire).

          2. “Manchester United fans feel that Glazer has used them, their support and their undoubted love for the club as a bargain chip at the table to further secure his already vast own personal wealth and esteem, with little risk to him or his family. Instead the majority of risk is being taken by Manchester United Football Club and it is the fans who are being asked to pay for the honour of this risk”.

          3. “If the financial situation at the club cannot be resolved and the club starts to struggle, Glazer will be able to walk away, bruised and bloodied yes, but still in healthy economic shape. Manchester United, on the other hand, could face insolvency, or worse still, going out of business altogether”.

          4. “..what cannot be questioned is that the loading of what United fans perceive to be his own financial burden, onto their club, is Malcolm Glazer’s biggest crime. It may well be a standard business practice, but it has raised the hackles of many a fan who now see their clubs owner as public enemy number one and the man primarily responsible for turning the club from a profitable PLC, into a debt ridden asset, somewhat cynically used to perpetuate the already obscene wealth of an American businessman, with relatively little or no risk to himself”.

          Be under no illusions, this is all about debt. The fact that Glazer is American is incidental. In the past, United have had offers from the Irish, a Middle East consortium, and an Aussie media mogul. Had they acted with similar moral bankruptcy, they too would have been vilified.

  11. tonspeed says:

    if you want to see the difference between abramovich and the hazers you have to go no further than wikipedia. http://en.wikipedia.org/wiki/Roman_Abramovich#Chelsea_F.C.

    “As of May 2008, Abramovich has spent approximately £600 million (€705 million) on the club since arriving in 2003.”

    “He is also present at almost every game Chelsea plays and shows visible emotion during matches, a sign taken by supporters to indicate a love for the sport, and usually visits the players in the dressing room following each match”

    talk about facts not about suspicions and rumours and the boogey monster under america’s bed.

    • UpTheBlues says:

      Greatest owner ever.

    • McBride says:

      “talk about facts not about suspicions and rumours and the boogey monster under america’s bed.”

      So your contention is that at no point was Glazer being an American an issue for United fans?

      • steven says:

        mcbride.. im sure 20% maybe more of the anti-glazers dont like americans.. and maybe it come up once or twice that theyre stupid greedy yanks.. but that is not the issue here.. if man utd were debt free, then youd still have that 20 or more percent of fans hating the owners because theyre american.. please stop trying to defend yourself.. everyone is against (but not totally) you on here

        • McBride says:

          “im sure 20% maybe more of the anti-glazers dont like americans.. and maybe it come up once or twice that theyre stupid greedy yank”

          This was my point the entire time.

  12. tonspeed says:

    http://www.guardian.co.uk/football/2009/dec/30/chelsea-roman-abramovich-debt-scolari

    Chelsea say they are ‘effectively debt-free’ under Roman Abramovich

    • Russian owner has converted debt to equity
    • ‘It is still our aim to be self-sufficient’

  13. TampaTwo says:

    As a devout tampa bay buccaneers fan I would be happy to see the Glazers sell Man U. Use that anger, spend a sh!$ load of money, and buy them out so my Bucs can get back to the Superbowl. Win win situation. If things don’t get better here in Tampa, the Glazers will have a war in two countries. Let us unite!

    • McBride says:

      “As a devout tampa bay buccaneers fan I would be happy to see the Glazers sell Man U. Use that anger, spend a sh!$ load of money, and buy them out so my Bucs can get back to the Superbowl.”

      As my Redskins have so clearly proven the past 10 years, spending cash doesn’t get you to a Super Bowl. The recipe for championships in that league is getting a good QB and making smart use of draft picks.

      I think Dan Snyder would be a fantastic Premier League owner. In the NFL, not so much.

    • Devils Advocate says:

      Tampa…Ideal scenario for sure. I’m sorry to learn of the unrest within the club and amongst supporters. What’s that saying “if you pay peanuts, you get monkeys”…Makes it tough for a club to compete on the field when they can’t compete on pay.

  14. TampaTwo says:

    I am not asking the Bucs to buy a superbowl but to pay the talent they have, and and at least try in free agency for a few, not overrated but strong players. Man U is all the Glazers seem to be spending, or spent I should say, their money on. I can understand he frustration over Man U’s debt, but some say their is hope that the team’s finances will turn around… by 2020. Hang in their guys.

    By the way, thanks for outbidding the Bucs for Haynesworth… Bust. McNabb was a awsome grab tho, and I hope he kicks some Eagle ass.

    • McBride says:

      “By the way, thanks for outbidding the Bucs for Haynesworth… Bust.”

      I see you’re a bigger fan of futbol than football. The Skins almost doubled their sack output from ’08 to ’09. AH was a great pick-up.

      • steven says:

        if youre talking about american football on a football page, then you need to get the f**k out.. i shouldve known from the name mcbride.. i shake my head at you

        • McBride says:

          “i shouldve known from the name mcbride”

          I didn’t start the conversation about football. Please direct your sanctimonious crap elsewhere.

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