EVEN MORE UNITED DEBT REVEALED (go back to the homepage)

Glazer's 'Red Football' holding company loses 137m in its first year.

Financial Times:

The Glazer family's takeover of Manchester United resulted in a pre-tax loss of 137.7m in the club's holding company, figures filed at Companies House reveal.

The accounts for Red Football, set up by Malcolm Glazer for the deal, also show for the first time that the actual amount paid by the Glazers was 809.1m.

According to the accounts, after a net asset valuation of 286.8m, the goodwill generated from the deal comes to 522.4m, depreciating by 39.2m a year over 15 years.

Interest payments on debt of 598m totalled about 85.2m in the 14 months between May 1 2005 and June 30 2006, divided between 27.2m from cash flow and 57.9m in high-yielding payment-in-kind notes.

The accounts are the first declaration by the Glazer family, owner of the Tampa Bay Buccaneers NFL team, of the scale of the club's indebtedness needed to secure the takeover.

The family waged a protracted battle with the board before securing the takeover. However, the club's success on the pitch - it leads the Premier League and is in the semi-finals of the Champions League and the FA Cup - has eased pressure.

Manchester United reported in January that the club had made a 31m profit in the 12 months to June 30, with earnings at 46.3m. Red Football's earnings were 10m lower, the result of costs borne in the last two months of the accounting period.

People connected to the Glazer family said the accounting losses were expected and reflected the cost of financing the old capital structure of the club, the depre- ciation of goodwill and exceptional one-off takeover costs.