Man Utd still has over £1bn debt despite stadium spend

Manchester United still have overall debt of more than £1bn despite the cost-cutting programme led by Sir Jim Ratcliffe, BBC Sport reports.

The outlet adds that the club has confirmed spending £63.5m buying land for their new stadium as part of a wider Old Trafford regeneration. On the pitch, United’s early-season form has been poor: they are 12th in the Premier League and have already been knocked out of the EFL Cup.

Record revenues, debt still weighs

BBC Sport says United posted record revenues of £677.6m and a £22.6m operating profit, even though it is the first time in a decade they have not played in Europe.

However, finance costs remain a major issue. Net finance costs for the year were £69.6m, up 228.3%, which the report says is mainly due to a foreign exchange loss. Football finance expert Kieran Maguire, quoted by BBC Sport, claims the figure alone has now exceeded £1bn since the leveraged Glazer buyout in 2005.

Breakdown of the debt

While debt has fallen from £1.3bn at the end of December, BBC Sport states it is still over £1bn. The article breaks it down into historic debt (now £577.6m), £111.4m outstanding on the revolving credit facility, and outstanding transfer fees—sources estimate this represents about 75% of the £473m listed as “trade and other payables”.

The club also says part of the stadium-related refinancing financed the £63.5m land purchase, but it does not explain what was done with the rest. BBC Sport adds that the stadium itself is likely to cost in excess of £2bn.

Supporters have been frustrated by what they view as under-investment in Michael Carrick’s squad, despite the club spending £148m on three summer signings (Carlos Baleba, Andrey Santos and Youri Tielemans). As BBC Sport reports, United argue the extra money was earmarked for the stadium even though the loan is lodged within the club’s accounts.