GLAZER'S BORROWING CONTINUES

Another summer of discontent is brewing at Manchester United. As usual, the football world is alive with transfer speculation, and not much of it is good for the demanding fans of Britain's biggest club. Rumours of star midfielder Cristiano Ronaldo's imminent departure are jangling the nerves of the Old Trafford faithful. Equally worrying, though, are reports about United's uncertain financial future.

Last week it emerged that the Glazer family, United's American owners, are in talks to borrow up to £500m against the value of future ticket receipts to pay off the debts they acquired during their controversial £800m purchase of the club just over a year ago.

Analysts doubt that United can be aiming to raise quite as much as £500m from ticket revenues alone, calling such a figure 'unrealistic'. Such a sum, after all, would be twice as much as Arsenal has just raised by mortgaging its own future gate receipts to finance the new Emirates Stadium. But there is no doubt that the Glazers, led by Joel Glazer and advised by JP Morgan, want to reorganise their huge pile of debts.

'A refinancing of some sort is definitely being considered, although nothing has been finalised,' a source close to the Glazers said. 'But a securitisation might be considered. Every club is probably wondering whether they should emulate the Arsenal model. The market environment is good and there are increased revenue prospects for Manchester United. The risk profile [of the club] has changed quite a bit since the Glazer family took over.'

It is certainly true that things are looking up for United's business. The recent auction of Premiership broadcasting rights means that domestic TV income will soon earn the club £14m a year more than was anticipated at the time of the Glazer buyout. Vodafone's decision to cut short its shirt sponsorship contract turned out to be a blessing in disguise: US insurer AIG has stepped in with a larger, £14m-a-year, deal. And an expansion of Old Trafford could earn United an extra £10m a year.

Yet talk of refinancing isn't likely to soothe the anxious hearts of ordinary United supporters - and their nervousness is understandable. In the football world, securitisations, which commit clubs to paying off creditors for up to 25 years, in exchange for a large upfront payment, have a bad name.

Financiers have generally been upbeat about the Arsenal deal, which sees the north London club move out of its cramped Highbury headquarters into a 60,000-seat arena with plenty of money-spinning corporate boxes. But etched in fans' memories is the trauma of Leeds United, which borrowed heavily against projected future earnings, then narrowly avoided bankruptcy and the loss of its stadium when those earnings failed to materialise.

That kind of blow-up, at least, shouldn't happen at Old Trafford. Whereas Leeds fatally splurged its borrowings on star players, the Glazers' plan is almost certain to pay off existing debts (charged at punitive rates of interest) with new, cheaper ones. The new debt will also be longer-term, enabling United to spread repayments and making 'disasters' such as a temporary failure to qualify for the lucrative European Champions League more manageable.

Financially, securitisation seems a prudent course. But it is unlikely to receive much support from the fans, who were used to United being debt-free before the highly leveraged Glazer buyout.

In fact, a securitisation only underlines what has always rankled most among many United supporters: that the new owner is taking money out of 'their' club, rather than putting it in; and using that money to pay for the very takeover that they so bitterly opposed.

It also means that there could be less cash available to spend on players. 'This deal may or may not help the Glazers out of a debt hole,' says Oliver Houston of the Manchester United Supporters' Trust. 'But if most of the club's income is going to the banks and bondholders, how can it be good for the club and its attempts to keep up with the big clubs in England and Europe?'

Houston also stresses the risks inherent in long-term debt, and says that United could end up paying more in total. Yet it certainly behoves the Glazers to rid themselves of at least some of their more expensive obligations. The family owes £265m to JP Morgan, secured against the club's assets, and - most pressing of all - £275m to three US hedge funds, at a short-term rate of up to 20 per cent.

How cleanly United could replace this debt with something cheaper depends on the detail of its current covenants. It could, for instance, face early redemption penalties. And new lenders, mindful of any existing charges on United's assets or revenue streams, might not be willing to extend the very best interest rates to the club. United might find it difficult, for example, to match the 5.28% rate enjoyed by the asset-backed bonds that Arsenal is releasing on to the market.