While Manchester United are returning to their former glory days on the pitch, you might have missed some of the action off the field. United have doubled down on going into the red.
According to Football Insider, the Red Devils have doubled the size of what is essentially their overdraft.
Doubling down
The club’s financials were released recently on Tuesday, 21 February. The accounts in question show that United activated a £ 100 million drawdown on a revolving credit facility (via Football Insider).
This occurred on 3 October 2022, moving the total drawdown to £200m.
Doubling down
United can take a further £100m from the overdraft facility. With regard to the additional overdraft, a flat interest rate has been agreed upon with a private lender.
What it means and what it doesn’t
While the latest drawdown might raise a few eyebrows, it does not guarantee that United will use all the additional £100m. The club has the option to use it should it see fit.
Generally, the seasonal nature of football is why clubs use a revolving credit facility. It allows the club to ease cash flow issues from fluctuations such as ticket sales and recruitment costs.
These expenses are not constant within the context of operations.
The Glazer era
The Glazers are expected to make way for one of four bidders for United by the summer, much to the delight of many of the Old Trafford faithful.
The Glazer family has typically depended on debt-based funding models while at United.
In what could be the last financial year of the Glazer era, the Red Devils posted a £119m loss on a turnover of £540m.
It’s the second successive year Old Trafford has trailed behind Manchester City in annual turnover. That said, an independent commission is now investigating City’s accounts. The probe follows charges levied by the Premier League, which consist of over 100 counts of financial impropriety.
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