http://www.ft.com/cms/s/0/cf9bbe5c-db8f-11df-ae99-00144feabdc0.html
It is rare that sporting headlines and financial headlines go hand in hand but that is exactly what has occured in the past few days as one of the worlds greatest footballers has decided he no longer wishes to represent what he once described as 'the greatest club in the world'. Wayne Rooney's revelation yesterday that he wants to quit Manchester United for pastures new has left a major cloud hanging over Old Trafford. The club which was as recently as July announced as the worlds most valuable sports team valued at $1.84 billion, has been accused of lacking ambition to match Rooney's personal goals.
The depressing reality for Manchester United fans is that the leveraged buy out by American tycoon Malcolm Glazer in 2005 has left this once financial powerhouse unable to compete with rivals in England and Europe. What will hurt United fans most is that this ever weakening financial position is not befitting the clubs performances and is solely a result of the Glazers ownership. His takeover of the club in 2005 was financed almost entirely by borrowed money, money which subsequently became Manchester Uniteds debt. United went from being a profitable and debt free organisation to a heavily indebted club in one fell swoop with the Americans purchase. In July this year Manchester United revealed record operating profits of £100.85 million, however the club still made an overall loss of £83 million due in large to interest payments necessitated due to the Glazers leveraged ownership. This business model has left Manchester United facing the prospect of having to sell its most prized assets in order to survive.
In 2009 Cristiano Ronaldo was sold to Real Madrid for £80 million. Of the £80 million recieved by Manchester United only a tiny portion has been assigned to reinvesting in players, whillst the rest has been used to service the insurmountable debt which now stands close to £800 million. Now it appears that Rooney is about to become the next high priced asset to bow out and leave United with little or no star quality and an endless amount of debt. The Glazers can remain unperturbed by this debt as it falls in the name of Manchester United, so that when the time comes they can simply walk out the door and leave someone else pick up the pieces.Tough times for Manchester United on the pitch... Even more worrying is the financial state of the so called 'most valuable sports team' off the pitch.
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