Is debt-ridden Manchester United in decline?

 Manchester United's manager Sir Alex Ferguson walks from the pitch after his team's 1-0 loss to Leeds United in their English FA Cup third round socc

Britain Soccer FA Cup

Manchester United's manager Sir Alex Ferguson walks from the pitch after his team's 1-0 loss to Leeds United in their English FA Cup third round socc

 Manchester United's Wayne Rooney, left, and Dimitar Berbatov walk from the pitch after their team's 1-0 loss to Leeds United in their English FA Cup

Britain Soccer Premier League

Manchester United's Wayne Rooney, left, and Dimitar Berbatov walk from the pitch after their team's 1-0 loss to Leeds United in their English FA Cup

 Manchester United's Wayne Rooney walks from the pitch after his team's 1-0 loss to Leeds United in their English FA Cup third round soccer match at O

Britain Soccer Premier League

Manchester United's Wayne Rooney walks from the pitch after his team's 1-0 loss to Leeds United in their English FA Cup third round soccer match at O

Snow, as Pulitzer Prize-winning American poet Richard Wilbur noted, has a remarkable ability to mask ugliness. In Wilbur's poem "First Snow in Alsace," it covered the scars of war. In English football, it is throwing a temporary shroud over the depth of problems at Manchester United.
Because of wintry conditions, United was spared the test of playing crosstown rival City in a League Cup semifinal on Wednesday, as Britain dug itself out from its heaviest snowfalls in three decades. The derby postponement means a wait until Saturday, when United faces a tough Premier League trip to overachievers Birmingham, to see whether Alex Ferguson's side can rebound from its painful start to 2010.
But even snow can't hide the fact that United is a troubled team, both on the field and off. The fast-approaching business end of Europe's football season, when league titles will be won and lost, will show whether United's recent shakiness is nothing more than an uncharacteristic dip in form or, as some are starting to suspect, the beginning of a longer-term and potentially corrosive decline that the club may be ill-equipped to arrest.
The biggest cause for alarm is the state of United's finances. Newspaper reports last weekend that the club's American owners, the Glazer family, are considering raising funds with a 600-million pound (US$963 million/(EURO)668 million) bond issue were a stark reminder of the giant and growing debt that United is laboring under.
United insists, and outside experts agree, that the club makes enough money to keep its creditors at bay, at least for the moment. But it hasn't escaped anyone's attention that Ferguson is still sitting on the bulk of the 80 million pounds ($128 million;(EURO)89 million) United got from selling star winger Cristiano Ronaldo to Real Madrid this summer. The question is why?
Ferguson clearly needs more talent. Forward Dimitar Berbatov has not fulfilled the promise he showed when United paid 30 million pounds for him in 2008. Winger Nani is another disappointment and striker Michael Owen is no longer a sure goal scorer. That veterans Ryan Giggs, Paul Scholes and Gary Neville are still getting so many games is due not just to their amazing longevity but also because not enough skillful youngsters have risen through United's ranks _ as those players once did _ to permanently unseat them.
While still just two points behind leaders Chelsea, United has lost five of its 20 league games. That's not a crisis but it is one loss more than in all of last season and a sure indication of how Ferguson's team has struggled and looked ordinary at times. After the humiliation of losing to Leeds in the FA Cup on Sunday, the first time that a Ferguson side has fallen to such lowly opposition in that competition, some United fans called for an end to his 24-year reign.
Ferguson says the Glazers are not stopping him from spending. They don't have to _ Ferguson is doing that himself, being thrifty in a market which he says is over-inflated.
"Maybe it is the Scotsman in me but I believe in value, even when I am spending someone else's money, and the asking price for players we were looking at just wasn't realistic," the Manchester Evening News quoted him as saying at the start of this season. "We don't suddenly have to splash out to try and compete at the top."
Perhaps. Coming months will prove whether Ferguson is right or being priced out of renewed success. Either way, United's tightly held wallet _ be it because of debts or because asking prices for players make no sense _ is raising questions. Compared to big-spenders Real Madrid and Manchester City, United is starting to look like a threadbare cousin.
Thanks largely to its 76,000-seat Old Trafford stadium, United is a moneymaking machine, with annual turnover of 257 million pounds ($412 million;(EURO)286 million), according to the most recent accounts available. But interest repayments from the debts the Glazers took to buy United in 2005 more than swallow any profits. Those debts swelled to 699 million pounds ($1.12 billion; (EURO)778 million) in the last accounts. With repayments, a pretax profit of 24 million pounds in the year to June 2008 became a pretax loss of 44 million. Interest payable on United's debt _ 69 million pounds in 2008 _ would buy a marquee player each season.
The concern, however slight it may appear at the moment, is that the debts could eventually undermine United's ability to continue financing winning football. Losing, in turn, could hit revenue, potentially starting a downward spiral. The retirement of 68-year-old Ferguson, when it comes, could also be a delicate financial time for United if his replacement proves unable to quickly match his success, especially in Europe's lucrative Champions League.
"They can comfortably service the debt at the moment," says sports industry financing adviser Harry Philp. "But there is a ticking time bomb ahead for them."
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John Leicester is an international sports columnist for The Associated Press. Write to him at jleicester(at)ap.org.