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Glazers setting aside £25m to pay for next Old Trafford 'superstar

Manchester United will restrict Sir Alex Ferguson’s annual transfer expenditure to £25 million except for a one-off “superstar” purchase who meets the Glazer family’s desire for an icon to play alongside Wayne Rooney and Cristiano Ronaldo, according to documents seen by The Times.
In two 60-page presentations outlining their business plan for the refinancing of the club earlier this year, the Glazers made clear that United’s annual transfer kitty will remain £25 million, despite their belief that operating profits will increase to more than £100 million by 2011. The only exception relates to an extra £25 million set aside for a “superstar”, seemingly a headline act who would raise the club’s profile off the pitch as well as on it.

Last year, The Times disclosed details of the Glazers’ original business plan, including controversial ticket-price rises. The new documents reveal the latest debt figure as £656 million, which is forecast to reach £733 million by 2012, and that the total costs of the takeover were £831 million, including bank and legal fees of £41 million. Annual interest payments have risen from £20 million to £40 million as a result of the refinancing.

The documents also reveal the Glazers’ belief that no other English club comes close to United’s commercial prowess and that “Chelsea’s lack of brand appeal and limited fan-base beyond the UK make it a less compelling commercial partner”.

They say that tickets at Old Trafford, which were subject to a minimum 12.5 per cent price rise this season, remain “undervalued” and will increase by a further 36 per cent by the start of the 2012-2013 campaign.

Television contracts will continue to soar, increasing the club’s annual media revenue from £46 million to £78 million by 2012. It is also revealed that players’ salaries will soar as a result of new television deals, with the squad’s wage bill (including bonuses) increasing from £53.2 million last season to £78.1 million by 2012. Increased sponsorship prospects will see the club’s annual commercial revenue rise from £56 million to £78 million by 2012 while the documents also recommend that the team should travel “to all corners of the globe” on pre-season and end-of-season tours to exploit the club’s brand.

Red Football, the Glazers’ investment vehicle, receives £1.6 million a year from United. The report makes no mention of the long-rumoured plan to sell and lease back Old Trafford or to break away the club’s rivals by pursuing separate broadcasting deals. Indeed, the Glazers describe the central distribution of broadcasting rights as “essential”.

The Glazers, whose initial plans for the club were described as “aggressive” by David Gill, the chief executive, regard their latest plan as “conservative”, but in many areas they speculate boldly. Predictions of playing performance are relatively cautious — a third-placed finish in the Barclays Premiership and progress to the last 16 of the Champions League each year — but their projected commercial and broadcasting revenues rely heavily on the latest football boom being sustained.

One area where have yet to speculate is in the transfer market. While Chelsea spend on average £75 million a year, the Glazers believe “£25 million of annual net player spend is sufficient to support forecast growth over the next five years” although an incremental £25 million capital spend bucket is available to the club.

A spokesman for the Glazers declined to respond to The Times revelations last night beyond saying that, “if the manager feels the right player is available, then Manchester United, as the world’s richest club, will seek to secure him.”