For a while earlier this year it seemed as though the Glazer family’s rapacious involvement with Manchester United might be coming to an end. Matches were accompanied by large-scale fan protests against the owners while a group of United-supporting businessmen were said to be preparing a takeover bid. Now, however, it seems the three unprepossessing middle-aged brothers who look after their father’s businesses are going to be around for a while yet.
Before being acquired by the Glazers in 2005, United were debt free and the most profitable club in the world. They have since paid £460 million in interest, fees and charges. A recent investigation by the financial analyst Andy Green, the Guardian and BBC’s Panorama attempted to show that the Glazers are struggling with each of their businesses, not just Man Utd.
The Glazers have sold their other major interests so rely only on their two sports clubs – United and the Tampa Bay Buccaneers – and US business First Allied Corporation, which owns and rents shopping malls. With the family’s other businesses not likely to contribute to clearing United’s debt, the Glazers will need to continue drawing loans and consultancy fees from the club – they have done so to the tune of £22.9m so far.
Indeed, if the past five years have shown anything it is that the Glazers will try to claw back the money by squeezing more from fans. United turned over a record £278m last year. Season-tickets prices have gone up by around 50 per cent since 2005.
As Duncan Drasdo of supporters’ group MUST said: “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. 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 story of the Glazers’ involvement in football could be used to make broad points about how clubs’ finances have been allowed to spin out of control. It was a pity that Wigan chairman Dave Whelan should be the only football insider to offer his views on Panorama. Whelan has apparently told manager Roberto Martínez that Wigan must break even every season. That may well be his ambition, but the club made an £11m loss last season, is £66m in debt and currently spends 89 per cent of its revenue on wages.
The Glazers, meanwhile, simply do not seem to have the resources you would expect for such a dynasty. Malcolm Glazer was said to be the 400th richest man in the world according to the Forbes Rich List last year. But he borrowed heavily to buy United, First Allied has £392m in outstanding mortgages and Tampa Bay Buccaneers are suffering from under-investment. The team finished bottom of their division last season after spending $30m (£20m) less than the salary cap. The Glazers claimed this was the result of a conscious attempt to develop young players and in no way reflected the state of their finances – which sounds very familiar post-Cristiano Ronaldo.
The “highly secretive” Red Knights did not feature in the Panorama report but were instead illustrated by two extras dressed in armour swinging swords at each other. The Knights seem to have disbanded within the past few weeks. They claim the family is overvaluing the club and they will not pay over the odds. The news that the Glazers rejected a bid of £1.5 billion is said to have put the Knights off, given that they valued the club at as little as £800m.
The rejection of this bid is perhaps the most interesting feature of the whole story. It seems against common sense for the Glazers to have turned down this offer. They paid £69m in interest last year, only made a profit because of the Ronaldo sale at £80m, and have large mortgages elsewhere. If the bid was genuine it seems that the Glazers will be at the club for some time.
This opens the question of how the fans react. The freezing of season-ticket prices was seen as a big coup for the campaigners. MUST also petitioned fans not to renew in anticipation of a bid from the Knights. But the fans are now left in an awkward position and there seems to be no real consensus on what they should do. They can continue to support the club at the risk of prolonging the Glazers’ ownership, or give up their season-tickets and lose out on seeing the team. The simple dichotomy of “loving United and hating Glazer” is not an easy one to achieve.
From WSC 281 July 2010