Price of United’s defeat nowhere near £15m

THE FINANCIAL impact of Manchester United’s failure to reach the last 16 of the Champions League has been “overstated”, according to an independent football analyst.

Simon Banks insists the cost in real terms to United of falling a round short of last year is between £2m and £2.5m, with the much-quoted £15m figure the amount on offer for going on to win the competition.

“It’s not a great deal to worry about compared to what their operating profits usually are, between £20-30million,” Banks said.

“Getting into the group stage, with the guarantee of six matches, is the real imperative, but after that it’s worth around £2million a match. To reach the £15m figure they would have had to have won it.

“Last year Manchester United got around £20m for being in the Champions League, this year they might get £18m, perhaps a bit more.”

Banks accepts continued underachievement in the Champions League could eventually have an impact on the Glazer family’s ability to repay the loans taken out in order to complete their takeover of the club.

However, the Champions League is not the club’s only source of income and the Glazer family have other assets which could help repay their debt.

“The real pressure on them is to get into the group stage next year. That’s their priority, and if you like, getting knocked out of Europe helps them in that - they can now concentrate on the league.”

“They don’t have to start paying back the debt big time for another three years.

“There are massive penalties for rescheduling the debts so they have to put up with paying the extortionate rates of interest.

“That’s when they have to start making serious money.

“Even if they won the Champions League they are going to struggle to meet it.

“If they weren’t in the Champions League for two seasons running they could have problems.”

Shareholders United chairman Nick Towle concurs with Banks, insisting the Champions League exit is “not a killer blow”, but believes the board are being stretched.

“On its own they will lose about £2.5m against budget for not getting into the last 16. That is a hit which by itself is not critical, but when you add it into all the hurdles they have had to jump, you’re looking at a picture of them having to work very hard just to stay where they are,” Towle said.

Towle believes United’s elimination gives sponsors looking to take over from Vodafone, the “initiative” in contract negotiations.

“They can say ‘your brand is not as attractive as it was, we’re not going to pay as much’ and it will drive the price down,” Towle added.