Man United’s cash reserves fall by $158 million

Manchester United’s cash reserves fell by 100 million pounds

($158 million) in six months partially to finance an investment in

a roster failing to maintain the English champions’ dominance.

As a result of spending that also took in stadium improvements

and a bond repurchase program, the Old Trafford bank balance

dropped from 150.6 million pounds to 50.9 million pounds ($238

million to $80 million) to Dec. 31, the club’s quarterly accounts

revealed on Tuesday.

Despite net spending of 48 million pounds ($76 million) on new

players, including goalkeeper David de Gea, defender Phil Jones and

winger Ashley Young, United failed to advance past the first round

of the Champions League and has been eliminated from both domestic

cups. Meanwhile, neighbor Manchester City holds two-point lead in

the Premier League.

United spent 5.3 million pounds ($8.4 million) in the three

months ending Dec. 31 buying back bonds that were issued two years

ago to raise 504 million pounds (then $762 million) to replace

long-term financing and reduce debts to hedge funds.

United has spent 92.8 million pounds ($147 million) repurchasing

that debt – more than the 80 million pounds (then $130 million)

received from Real Madrid in 2009 for the sale of Cristiano

Ronaldo.

The club’s debt, resulting from the 2005 takeover by the

American Glazer family, stood at 439 million pounds ($694 million)

at the end of 2011 and incurred almost 24.5 million pounds ($39

million) in interest payments in six months.

Although the debt was down from the 508 million pounds at the

end of 2010 it rose again in the final three months of 2011 by 6

million pounds ($9.5 million).

However, United’s moneymaking abilities appear to be

undiminished, with 175 million pounds ($277 million) in revenue in

the six months ending Dec. 31 – up more than 10 percent on the same

period a year earlier due largely to a rise in TV income and a new

training jersey sponsorship deal with express delivery and freight

firm DHL.

”Revenues continue to grow strongly although costs are

increasing just as quickly so pretty much negating that growth,”

the Manchester United Supporters’ Trust said in a statement.

”However the key figures of interest to supporters show the

Glazers have now spent every penny of the money received from the

sale of Ronaldo, and more.

”That’s now 92.8 million pounds spent on buying back their own

bond debt that they loaded onto our club.”

MUST said that since Ronaldo’s departure, net transfers totaled

90 million pounds ($142 million) while 225 million pounds ($356

million) had been taken out of the club to cover debt payments and

interest.

”What could the club have done with that extra 225 million

pounds? Cheaper tickets for loyal fans, investing massively in the

squad and stadium, developing and retaining the best youth players,

competing on an equal basis with the very best teams in Europe,”

MUST said. ”This is the true cost to Manchester United of the

Glazers’ ownership.”