The Glazer family seem to be in for the long haul as owners of Manchester United. Photograph: Dave Thompson/PA

David Conn

• The Guardian, Monday 7 June 201

The slump in the Glazers' shopping centre empire suggests United will be family's main source of funds.

As a tale for our times, about the hollowed-out economy in the US and here, and sport's modern, exceptional transformation into a vehicle for investors to make money, the Glazer family's ownership of Manchester United takes some beating.

When Malcolm Glazer, a self-made US entrepreneur and owner of the Tampa Bay Buccaneers NFL franchise, bought United in 2005 for £831m, £559m of it borrowed then loaded on to the club, he and his family still held industrial concerns including Zapata, a company which owned the fish oil firm, Omega Protein. They sold their Zapata holding last summer, to a hedge fund, for $74m. In the prospectus launched in January to refinance £500m of borrowings in United for the second time, the only "principal business interest", besides United and the Bucs, listed by any of Malcolm's six children, all United directors, was First Allied Corporation, a shopping centre company.

Edward and Kevin Glazer said they were officers of First Allied; Avram, Joel and Bryan Glazer listed only United and the Bucs, while Darcie Glazer-Kassewitz, Malcolm's daughter, said she was co-president of the Glazer family's charitable foundation, which is associated with the Bucs.

The investigation into First Allied Corporation, by the investment analyst Andy Green in conjunction with the Guardian and the BBC's Panorama programme, has revealed that First Allied's shopping mall business has been seriously hit by the recession. Four of the shopping centres have fallen insolvent due to empty store space and rents falling too low to cover the mortgages, in Columbus, Ohio; Denton County, Texas; Roswell, Georgia and Cobb County, Georgia. Another centre, Lakeview Crossing in Dallas, Texas, fell behind with its mortgage last month.

Green's analysis, from publicly traded mortgages on 63 of the 64 shopping centres listed on First Allied's website (the other, McLearen Square in Herndon, Virginia, paid its mortgage off), shows 28 are on the banks' "watchlist". That means the banks are concerned about low occupancy rates and whether the rent will be sufficient to service the mortgages.

Not all the shopping centres are in trouble; some are fully occupied and making profits. The mortgage documentation and latest monthly filings from the trustees, Bank of America Merrill Lynch and Wells Fargo, show a total of $567m (£392m) is outstanding in mortgages. The total rent First Allied received from its tenants meant the company cleared $9.7m before tax last year. So overall, the Glazers' business is still providing them with a return, but a meagre one for a family which has £202m of United's £717 total debt in "payment in kind" (PIK) loans to be repaid at 14.25% – shortly to increase to 16.25% – annual interest.

Green, a United supporter deeply critical of the takeover which has loaded debt on to the club and drained a staggering £460m out since in interest, charges and fees, says he found the investigation revelatory: "What struck me most is that this business, the only other one the Glazer family declared, does not create anything," he says. "They bought shopping centres, and they rent them out. The picture from the mortgages is that the centres overall are not generating anything like the return required if the PIKs are to be paid off from outside United."

The Glazers are understood to accept their property business has suffered seriously in the economic downturn, although they point out that $9.7m does at least represent a profit in sectors, property and retail, which have seen spectacular failures, in the US and here, after the banking collapses burst the credit bubbles in 2008.

Yet peeled back by this exposure is a fact acknowledged by the Glazers: their property business, recession-hit, is not the engine for the family's fortunes. It is the sports clubs they bought, United and the Bucs, which they believe will generate them cash and increased value.

United's chief executive, David Gill, has said the £202m PIK loans are "the family's responsibility", but that relates to the security for the loans – they are mortgaged on the United shares themselves, which the Glazers own. The money to actually pay the PIKs is almost certain to come from United, however, particularly in light of the financial difficulties First Allied Corporation faces. A key feature of United's £500m bond refinancing in January was to enable the Glazers to take £100m out of the club, plus half of the club's annual cash profits. Funds of around £150m have been amassed at United from operating profits and the £81m sale last year of Cristiano Ronaldo. The Glazers spokesman insisted that providing money for Sir Alex Ferguson to spend on players is the priority, and success on the pitch is vital to maintaining commercial momentum. However, that cash bank is also available for the family to take out partly to pay off their PIKs.

The bond prospectus launched in January revealed that the Glazers have been paid £12.9m in management and consultancy fees, and the six Glazer siblings personally borrowed £10m in December 2008. The family have not explained why these loans were taken out; there are tax advantages in directors being paid money in this way.

Malcolm Glazer, still then in command of the family business, bought the Bucs in 1995 for $192m, with a $95m mortgage, just under half the cost of the franchise. The Bucs won the Superbowl in 2003 but last season finished bottom of their division having been reported spending $30m less than the salary cap allowed for players. In an interview in March to discuss the Bucs, Joel Glazer insisted the low spending was not because they are "cheap" owners, but because they are basing their playing strategy on signing young players, not stars. He said that ticket sales are down due to disillusioned and recession-hit fans, and blackouts next season, where television refuses to show games with empty spaces in the stands, are "a real possibility".

Nevertheless, Forbes values the Bucs franchise at $1.1bn, so although many fans are staying away and protesting about underinvestment, the Glazers are sitting on a huge gain if they sell it.

At United, many fans remain confounded by the fact that the financial system has turned so far in on itself that investors are allowed to borrow the money to buy a company, then can load those borrowings on to the company itself to pay off. Fans outraged at the £717m United, previously debt-free, now owes to banks and hedge funds, and the £460m in interest, fees and charges for which the club has become liable since 2005, latched on to Newton Heath's original green and gold colours this season to demonstrate their adherence to the club's founding collective values.

"We have campaigned against the takeover because the Glazers have put not one penny into United, while taking huge sums out, and ticket prices have risen for ordinary fans to help pay for it," Duncan Drasdo, MUST's chief executive, says. "The revelations about First Allied appear to show they may not have money from elsewhere to invest in the club or pay down all the debts.It will all come from the club."

The Glazers are unabashed, however, emboldened, even, after the apparent withdrawal last week of a takeover bid from the Red Knights group of wealthy United fans. They, led by the Goldman Sachs' chief economist Jim O'Neill, believe the family is overvaluing the club, given its indebtedness, the investment clearly required to strengthen the squad, and the looming challenge of replacing Ferguson. The Glazers, who would argue that they are responsible owners, see only value in unexploited growth from TV and media rights, sponsorships – evidenced by the £88m four-year deal with Aon announced last week – and, they remain confident, from a full Old Trafford, despite fans' resentment and MUST's call not to renew season tickets while the Glazers are in charge.

That is the extraordinary position for Manchester United, a legend built on the strivings of workers on the Lancashire and Yorkshire Railway who founded it in 1878, on Sir Matt Busby's and now Ferguson's achievements, and generations of loyalty. The club has roared away, financially, from the industries and communities which nurtured it, and the Glazers, who bought the name and heritage of United with borrowed money, are not selling up, but digging in.

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