MANCHESTER United confirmed yesterday a £12.3million drop in annual profits to £46million. The figures represent the first to be released since Malcolm Glazer completed his takeover in the summer, but include only three months of the Glazer era.
United chief executive David Gill forecast the potential for a fall 12 months ago - with reduced TV money from the Premier League and lower income from the Champions League the key elements behind the announcement - but he is adamant the Old Trafford club are no danger of being crushed by the mammoth level of debt incurred by Glazer's takeover.
"Manchester United will not implode by finishing third in the Premiership," said Gill. "Neither our internal business plan, nor the bank financing plan is based on first, first, first, cup, cup, cup. It is based on the sensible levels we were following as a plc, which were fairly conservative and based around finishing fourth in the Premiership and getting into Europe. It is about the same now."
While Gill's assertion will be met with disdain by major supporter groups, he was able to clarify some of the misconceptions he feels have grown around the debt.
"There are two elements to the debt, the hedge funds and the senior debt," explained Gill. "The hedge funds have no security over the club and no influence over it either. Yes, they have to be repaid but that is something the Glazers will do from their own resources or refinancing plans in time.
"Manchester United is supporting the senior debt, which is around 265million to 275million. People need to recognise the cost of servicing the interest on that debt is not in excess of the what we were previously paying in dividends and corporation tax as a publicly quoted company."