FALLING SHORT

IT MIGHT all turn out just fine, financially. But then again it might not. And because Malcolm Glazer has borrowed such a large amount of money to fund the purchase of Manchester United, and is locking himself into such punishing rates of interest, there is precious little margin for error.

The biggest financial hot potato is matchday ticket prices, the same issue that is likely to cause the most consternation among fans.

If Mr Glazer succeeds in raising the average price of a seat at Old Trafford by 54 per cent over the next five years, he has a good chance of paying his interest bill. The Tampa Bay buccaneer will also justify the heady price he paid for the club and restore financial strength to a corporation that, at present, is questionable.

If, however, Mr Glazer is being a little optimistic, the finances of Manchester United could unwind remarkably quickly. Talk to the average Old Trafford regular about revenues, balance sheets, banking covenants and preferred equity, and it may be difficult to hold their attention. But fans are sure to find the financial intricacies much more absorbing if, or when, any financial difficulties start spawning a sporting malaise.

United fans can hope to see the team emulate past glories only if its finances are sound. But if things go awry, significant sporting achievement at United could prove elusive.

The good news for Mr Glazer is that he has a strong chance of being able to push through the ticket price increases. It may cause uproar. It will do nothing to endear the bearded one to a suspicious and antagonistic Manchester public. But monopolistic powers work to Mr Glazer’s advantage.

Here’s how: a United fan might choose not to go to Old Trafford because of the cost. But United fans are most unlikely to swap allegiance because of a rise in ticket prices. How many United fans would react by switching their support to Oldham Athletic, Rochdale, Chelsea or Nagoya Grampus 8? The fanaticism that defines football culture means that Mr Glazer is in the happy position of having the power to impose price increases on what is, to a great extent, a captive audience.

Besides, the cost of a seat at Old Trafford is among the cheapest in the Premiership, and that undermines the suggestion that Mr Glazer is being unreasonable by planning to raise prices. Since Old Trafford has been a sell-out for as long as anyone can remember, Mr Glazer can probably afford to ride roughshod over ticket price sensitivities without losing any sleep over the possibility that there’ll be gaps appearing at the Stretford End.

It is, nonetheless, a brave decision to assume that ticket prices will increase at the rates outlined. It is even braver to assume that United will manage to increase commercial revenues — from sponsorships, mostly — by 76 per cent over the next five years.

It is no mean ambition for Mr Glazer and his clan to expect total revenues to rise by between 35 and 40 per cent in the next five years, given that United , as a business, has been run perfectly respectably as a business in recent years. It is another exacting target to expect that operating costs will rise by only 11 per cent over the next five years.

But how realistic is it to assume that Manchester United will finish in the top three or four in the Premiership in each of the next five years? Will it be able to do that with its transfer budget constrained in the way it is likely to be?

And if it needs to spend more, how far will Mr Glazer’s finely balanced finances be knocked off course?

Mr Glazer is borrowing an awful lot of money. As anyone who has spent more than they should on a credit card will know, it is all too easy to wishfully think that the future will take care of itself.