Man Utd soothes dividend fears

MANCHESTER United has soothed fears that it could cut its dividend to help meet the record-breaking £30m cost of buying defender Rio Ferdinand.

The Premiership club's shares have fallen sharply since the deal was announced on worries over the impact on its finances. But a spokesman said: 'The deal will leave us slightly in debt, but we are under no pressure to sell players and neither is the dividend at risk.'

Man U is one of the few clubs to pay shareholders a dividend, which last year cost £5m.

Within the next few days, Man U will pay Leeds United the first instalment of £15m which will temporarily drain its cash resources. Another £14.3m will be handed over in July next year with a further £4m depending on future performance of the team.

Man U will write off the transfer fee over five years, the length of Ferdinand's contract. The annual £6m charge will lift write-offs for 2003 to around £23m. Analysts say the true cost of Ferdinand, when his wages are taken into account, will be closer to £10m a year.

Man U shares closed 1p up at 109p, against 183p earlier this year.