‘’Malcolm Glazer’s gonna die... How we kill him I don't know, Cut him up from head to toe, All I know is Glazer’s gonna die!’’
A couple of seasons ago, at the height of MUST’s (Manchester United Supporters Trust) ‘Green and Gold’ campaign this song was sung regularly at Old Trafford, usually with virtually the whole crowd joining in. For a while (whilst United where winning title number 19) the anti-Glazer songs took a step back and songs about the team became the most prominent. However, at stages last season, mainly in the middle of the season when United fans had to deal with seeing City mount what seemed like an unassailable lead at the top, the anti-Glazer sentiment came to the fore yet again (certainly where I sit at Old Trafford anyway). And now this is surely only going to resurface again with news that they are going to sell a portion of the club on the New York Stock exchange.
Of course, for a cynic or rival fan who either enjoys seeing the Glazers systematically destroy United or thinks that United fans have nothing to worry about, they might come to the conclusion that the anti-Glazer section among United fans only crops up when the team performs below expectations. They arguably have a point; however, the anti-Glazer feeling among the vast majority of United fans has never gone, not since the dark day in 2005 when they bought the club.
“But you signed Rooney/Berbatov/Nani/De Gea/Jones/Carrick/Hernandez (delete where applicable) and won loads of trophies since the Glazer’s bought the club….how can you even have the audacity to complain about having no money?!”
This is usually something I hear opposition fans tell me, and believe it or not something even some United fans spout. Of course, as a statement of fact, these people would be correct. But a fully functioning football team is more than just about winning trophies. Ask Leeds fans if they could swap that Champions League run for being in the Premier League now, I am sure most would say they would prefer to have missed out on semi-final heartache. Anyway, lets try and take a quick look as to why United fans are so upset about the Glazer’s ownership of the club.
So let’s start off by scratching the surface. Why have Manchester United won all these trophies and got to numerous cup finals since the Glazers bought the club? Well, quite simply this would rest on the shoulders of Alex Ferguson and the players. Despite being hamstrung, (even though he won’t admit it) Sir Alex has constantly managed to get the team to perform beyond expectations. Of course, he has been helped by having players such as Vidic, Ferdinand, Evra, Ronaldo, Rooney, Van Der Sar, Carrick, Giggs, Scholes and so on perform to a consistently high standard for so long. On the surface it looks rosy. United have performed very well since 2005, particularly in the League, but you need to dig deeper to see why the Glazers are ruining United. Of course United’s name and ‘brand’ also helped them in this period gaining them large profits.
Malcolm Glazer’s gonna die… How we kill him I don’t know, Cut him up from head to toe, All I know is Glazer’s gonna die!
The Glazers bought the club not with their own capital but with money they borrowed. Vast sums of money, that of course needs to be paid back eventually. When you borrow money to buy something, be it a car, a house or a football club, the bank/s will charge interest on that loan. United, despite winning trophies and selling players for £80million, are not making enough money to even pay off the interest on that debt, let alone EVEN PAY OFF THE ACTUAL MONEY BORROWED. As David Conn from The Guardian has pointed out, since 2005, the £525million that they borrowed, has already incurred interest charges of more than £500million.You do not need too be an editor of the Financial Times to see that this is not healthy.
At the start, the Glazers (I assume) thought they could try and recoup some of this money by increasing ticket prices and forcing season ticket holders to buy a ticket for EVERY single cup game (be it League Cup, Champions League or FA Cup). This hasn’t worked, and obviously, neither has selling Cristiano Ronaldo. Now the Glazers are desperate.
They may be bad businessmen, but they are not stupid businessmen. They have put their reputations on the line when buying United and they have about 420 million (where United’s current debt stands) reasons as to why they should want to wipe out some of this debt. In May the results of Q3 were announced and they did not make for very good reading. The United fan Andersred points out spectacularly on his blog that the Glazers’ trick of being able to sustain ownership of the club based on a limited budget and high profits is coming to an end. United were paying around £250k a DAY to pay off the debt.
The Glazers have come up with the solution that the best way to keep the club sustainable is to sell a part of it off on the New York Stock Exchange. They had originally tried to do the same in Singapore with the idea being that United’s appeal in the region would lead to a lot of interest. For various reasons this didn’t happen and the Glazers went shopping around again. They started looking at the NYSE and started looking for suitors. Morgan Stanley, the financial services company based in New York were one, but pulled out after claiming the Glazers were being greedy (nothing new there). But why New York, and not London? As Newsweek mentioned on an article about the subject:
“New York’s stock markets permit companies to sort their shareholders into different classes, allowing founders and owners to sell shares while maintaining control. In London, such a setup gets you excluded from key indexes.”
Of course, the line needs to be found where constant pressure on the owners does not lead to negative performances by the players (see Blackburn Rovers)
Of course the Glazers won’t admit this is the reason, but it is. They have tried to appeal to investors by claiming:
‘….It [United] has 659m "followers" worldwide. Coming after a season in which United were pipped to the Premier League championship by Sheikh Mansour's lavish-spending Manchester rivals City, and were knocked out of the European Champions League in the group stage, the document boasts of a massive global TV audience and that "over 5 million items of Manchester United branded licensed products were sold in the last year".
The "strategy" for United is also set out, specifying how the family intends to "increase our revenue and profitability, by expanding our high-growth businesses that leverage our brand, global community and marketing infrastructure".
The Glazers state they intend to develop areas including "global and regional sponsors, retail, merchandising and product licensing, exploit new media and mobile opportunities, enhance the reach and distribution of our broadcasting rights [via United's MUTV channel] and diversify revenue and improve margins".
The document states confidently: "We believe that we are one of the world's most recognizable global brands with a community of 659m followers"; and it predicts that football's popularity and profitability around the world will continue to grow.’ (David Conn, The Guardian)
If it sounds like a sales pitch, it is because it is precisely that. Investors have no guarantee that they will actually have a say in running the club, after all their shares will be worthless against those the Glazers have. Also, it is worth noting there are currently no plans for investors to receive any form of dividend.
The structure of the club will be completely changed. The holding company will be based in the tax haven that is the Cayman Islands, an English club, run by Americans, based in the Cayman Islands and listed on the New York Stock Exchange.
Let’s hope this does not become a reality, as Rangers, Leeds, Fiorentina and so on have all shown what can happen when reckless owners are put in charge and badly manage big clubs
It is certainly something that is hard to stomach for United fans such as myself, and we have to now ask ourselves, what can be done to rescue our great club? Well simple, put pressure on the owners. Of course, the line needs to be found where constant pressure on the owners does not lead to negative performances by the players (see Blackburn Rovers). But we need to find a way to reignite support without it coming across as negative to the players. More must also be done to help wake up a certain section of United fans who are more than happy with winning trophies rather than what goes on behind the scenes. Next season will see City spend even more money. Chelsea have and will continue to spend. United need to strengthen to compete, but Ferguson’s magic can only last a little longer. Yes they have bought players, but one has to wonder where this money has come from.
Lastly, the most saddening thing and the starkest warning about the whole scenario has come from the Glazers themselves. In the document they have to publish by law in order to outline to investors the potential dangers in doing say, it states that the debts, wholly imposed by the Glazers' original takeover, "could adversely affect our financial health and competitive position". Let’s hope this does not become a reality, as Rangers, Leeds, Fiorentina and so on have all shown what can happen when reckless owners are put in charge and badly manage big clubs. I only hope that someone, sometime soon, manages to have the cash to meet the Glazers’ ridiculous valuation of the club. Otherwise, particularly if City become more of a dominant force in the game, the long term future of the club looks bleak to say the least.
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