Man Utd to refinance
News story this morning about how the Glazer’s have given notice on their money borrowed from hedge funds.
Read more about the story here: –
https://news.bbc.co.uk/sport1/hi/football/teams/m/man_utd/9192771.stm
It’s interesting because the interest payments on the debt have been putting a huge strain on Man Utd’s ability to spend money. A case in point in the following sentence: –
“Earlier this year the rate rose to 16.25%”
I’m aware that raising finance in the current market is tough and rates can be punitive. I went through an exercise last year with somebody that was trying to fund a $20m purchase. We just couldn’t get an acceptable rate through private equity without gingiv up a large chunk of the business and losing control. It didn’t seem worth it.
I guess we will have to wait to see what the deal is that has allowed them to pay down the debt. But I’m keeping a longer term eye on the finances of the big clubs as this will surely dictate their activity in years to come. It’s not possible to live on borrowed funds or large levels of debt indefinitely. The long term winner will be the one that can get that balance of spending and revenue just right. I think a lot have it wrong at the moment, not just at the top.
Category: Football trading strategies, Industry news
