Fergie continues Glazer PR battle as interest rate rises
Sir Alex Ferguson has defended the Glazer family, warning Manchester United’s fans that continued unrest in the stands could disrupt the team. The warning, pre-briefed from his United Review programme notes for the match against Newcastle United tomorrow night, is a repetition of the Scot’s support for the Glazer family since the May 2005 takeover.
Ferguson, who offers no explanation of how protests in the stand have harmed the team to date, has consistently defended the family despite overwhelming financial evidence that that the Americans’ ownership of the club is costing millions in interest, loans, dividends and management fees annually.
Indeed, Ferguson’s tirade comes on the eve of the Glazer family’s Payment in Kind (PiK) debt interest rate rising, as widely expected, to an onerous 16.25 per cent per annum. The rise will add an additional £5 million in interest to a PIK debt that will hit £269 million next year.
“One situation clouds the new season and that is the continued opposition to the Glazer family,” Ferguson told club mouthpiece United Review.
“I have no problem with the green and gold campaign. Fans are entitled to protest as they see fit. But not to the detriment of the team.
“The fact is that the Glazer family own Manchester United and until such time as they decide they want to sell, they will stay as owners regardless of the opposition.
“So it comes down to the extent of the protest. What I don’t want to see is Manchester United mired in so much controversy that it deflects our purpose of winning matches.”
Ferguson sees no irony in the argument, even though the Scot’s ‘controversial’ dispute with John Magnier in 2004 over breeding rights for the racehourse Rock of Gibraltar, which was part-owned by the United manager, precipitated the sale by the Irishman of his shares in the club to the Glazer family.
Ferguson’s name was dropped from the list of owners when Rock of Gilbraltar, which won a record seven Group One races as a three-year-old, went to stud. The Scot challenged the decision, prompting a battle that was saved from court at the eleventh hour when the United manager accepted an offer of £2.5 million to cover stud fees for the horse.
The horse dispute is not the only controversial moment involving the Scot of course, with regular rants at referees – incurring a four match FA touchline ban last season for the Scot’s “unfit” jibe at Alun Wiley – fellow managers, the media, officialdom and even supporters.
Despite – or perhaps because of – Ferguson’s pivotal and unforgivable role in the highly leveraged takeover, the United manager has called for unity behind the Glazer family, which has allowed a net transfer budget of minus £47.5 million over the past two seasons.
“Whenever we have had success it has been a collective effort with everyone united – management, players and fans. How many times have I commented in the past about the need to pull together?” Ferguson continues, demonstrating beyond doubt if any remained, which side of this particular fence the manager lies.
“There is no doubt that players respond and relish support. We have had some great European nights at Old Trafford and I wouldn’t like to see anything develop that would diminish that kind of backing.
“I see that one of the protest groups has come up with a slogan along the lines of “New Season, Same Goal”.
“I know what they have in mind but I just wish they meant that once again we will all be united, busting a gut to win something big; in that sense it is not a bad slogan.”
Strange then that analysis by the Independent Manchester United Supporters Association (IMUSA) shows that United won more games and scored more goals since the launch of the Green & Gold protest movement in January this year.
IMUSA demonstrates that United scored a net average of a goal and a half more per game following the protest’s start than before. Coincidence perhaps but there is little doubt that the movement heightened the often flat atmosphere at Old Trafford last season.
Meanwhile, the Sunday Times confirms today what many analysts had predicted in January – that the interest rate on the PiK debt will rise from August. The PiK debt, standing at £202 million when last announced, will rise to more than £269 million in the coming months because the family has failed to keep the club’s debts below the level required under the terms of the loan.
For that reason alone the family issued its £504 million bond in January, which doubled the interest rate on the club’s senior debt but enables the Glazers to take significant amounts of cash out of the club in dividends, management fees and loans.
Indeed, the Glazers’ PiK debt must be paid off in full by 2017 when it will be worth more than £600 million. If the family doesn’t pay down the debt by that date it will hand over the club to three New York based hedge funds
That’s one kind of unity that Ferguson probably doesn’t want.