Nick Harris in the Indie:
As confirmation arrived yesterday that Malcolm Glazer will raise Manchester United ticket prices by 54 per cent in the next five years to help fund his takeover, it emerged that his detailed, 100-page business plan makes no mention of how he intends to pay back £275m in loans from hedge funds.
The omission suggests that either he will repay the money from personal funds, perhaps by selling the Tampa Bay Buccaneers, or else he will refinance the debt and load it on to United's books, in which case his business plan would become unsustainable.
Glazer's figures already work on the assumption that United will compete in the Champions' League every season, and that they will make the quarter-finals at least every third year. A similar assumption, which proved erroneous, started Leeds United's descent into financial meltdown.
If Glazer does not use private, non-United means to repay the hedge funds, lack of on-pitch success could be financially crippling within two years.
A leaked copy of Glazer's plan shows that interest repayments alone on a separate block of £374m bank debt will total £22.8m next year, falling to £11.8m by 2010. Glazer anticipates this will be funded through increased ticket prices and a 76 per cent increase in United's commercial revenues. No detail has been made public on how such an increase will be achieved, although new sponsorship events and exhibition games in Tampa are expected to raise £5.6m a year.
"The idea is that there is a continuation of the international tours and when United are in the United States they'll use the Tampa grounds," a source said.
Glazer expects to increase United's total turnover by 52 per cent to £245.6m by 2010, which is not unattainable as long as Old Trafford continues to be filled and United never fail to make the Champions' League proper.
That still leaves the question of the pay-in-kind securities issued to the hedge funds in return for £275m. These accrue interest of some 20 per cent annually, which accumulates and pays out when they mature in 2015. However, if the money is not repaid in full by August 2010, by which time they would cost £641m to clear, the hedge funds will gain control of United. "The Piks are a ticking bomb," said Howard Lacy, a director of Inner Circle Sports, a sports finance adviser. "Manchester United is now in a dangerous position."
David Gill, United's chief executive, and Sir Alex Ferguson, the manager, evidently disagree that United are in peril, having agreed to work indefinitely for the Glazer regime. Ferguson has been assured that he will receive a transfer budget of just over £25m per season until 2010, with another £25m in total available if necessary. United's fans will ultimately foot the bill through higher ticket prices. The cost of an average seat is expected to rise from less than £30 now - a mid-range price in the Premiership - to £46 by 2010.
Glazer's son, Joel, who is likely to become United's chairman and take a hands-on role in running the club, is planning to make public some of his ambitions for the club soon after the official offer period ends.