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Manchester United's ticking time bomb
by Paul Kennedy, April 10th, 2009 7AM



Despite record revenues of $371 million, Manchester United's parent company, Red Football Joint Venture, suffered pre-tax losses of $65.6 million in 2007-08 in part because of interest payments on loans its owners are unable to restructure in the current economic environment.

The 2007-08 season saw United win the English Premier League and UEFA Champions League.

With 63,000 season-ticket holders, its own TV network and a lucrative shirt deal, as well as TV revenues from the lucrative EPL deal, United enjoyed an operating profit of $118.3 million.

"The turnover is spectacular, which is what you would expect from a season when they won the Premier League and Champions League," Harry Philp, financial analyst at Hermes Sports Partners, told BBC News.

The losses were the result of payments on moneys the Glazer family borrowed when they took United private. Their debt is now more than $950 million.

The loans included money owed to hedge funds that lent money at 14.25 percent interest rate.

"That debt is a ticking time bomb that they have to pay off," added Philp.

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