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| The Glazers continue to thrive while Manchester United flounder | The Glazers continue to thrive while Manchester United flounder |
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| Amid the reams of corporate boasting in the Glazer family’s pitch to make $200m from selling a small slice of Manchester United plc shares, a section trumpets to likely investors United’s concerted raising of Old Trafford ticket prices since the Americans bought the club in 2005 and loaded it with their own £525m debt. | Amid the reams of corporate boasting in the Glazer family’s pitch to make $200m from selling a small slice of Manchester United plc shares, a section trumpets to likely investors United’s concerted raising of Old Trafford ticket prices since the Americans bought the club in 2005 and loaded it with their own £525m debt. |
| The timing, following the £75m the family made selling shares when they floated United on the New York stock exchange in 2012, is painful. The thinness of the club’s squad was exposed by Swansea City’s 2-1 opening-day win at Old Trafford last Saturday and there is an unconvincing late transfer market scramble to shore it up. | The timing, following the £75m the family made selling shares when they floated United on the New York stock exchange in 2012, is painful. The thinness of the club’s squad was exposed by Swansea City’s 2-1 opening-day win at Old Trafford last Saturday and there is an unconvincing late transfer market scramble to shore it up. |
| Supporters are confronted with the legacy of £700m drained out in interest, fees and bank charges by the Glazers’ takeover, botched planning and underinvestment, which can be traced back to 2009. Then United reached the Champions League final, where they lost to Barcelona, then sold Cristiano Ronaldo to Real Madrid for £80m, a windfall that was not reinvested in recruiting new players. | Supporters are confronted with the legacy of £700m drained out in interest, fees and bank charges by the Glazers’ takeover, botched planning and underinvestment, which can be traced back to 2009. Then United reached the Champions League final, where they lost to Barcelona, then sold Cristiano Ronaldo to Real Madrid for £80m, a windfall that was not reinvested in recruiting new players. |
| Edward Woodward was in 2005 a banker at JP Morgan and a senior architect of the Glazers’ debt-loading takeover, including the high-interest £265m “payments in kind” loaned by hedge funds, which has cost United so far that scarcely believable £700m. Woodward is now reinvented, installed by the Glazers as the club’s vice-chairman, charged with actually running the famous club. With #GlazersOut trending on Twitter for two days following the defeat by Swansea, Woodward is tasked with showing he can negotiate the thickets of football administration and, by extension, that the Glazers should be trusted. | Edward Woodward was in 2005 a banker at JP Morgan and a senior architect of the Glazers’ debt-loading takeover, including the high-interest £265m “payments in kind” loaned by hedge funds, which has cost United so far that scarcely believable £700m. Woodward is now reinvented, installed by the Glazers as the club’s vice-chairman, charged with actually running the famous club. With #GlazersOut trending on Twitter for two days following the defeat by Swansea, Woodward is tasked with showing he can negotiate the thickets of football administration and, by extension, that the Glazers should be trusted. |
| He will point to this week’s signing of the Argentinian international defender Marcos Rojo from Sporting Lisbon, which was complicated by the endemic Portuguese spectacle of investors owning rights in the player, as evidence of sure-handedness. Supporters, however, will take much more convincing. | He will point to this week’s signing of the Argentinian international defender Marcos Rojo from Sporting Lisbon, which was complicated by the endemic Portuguese spectacle of investors owning rights in the player, as evidence of sure-handedness. Supporters, however, will take much more convincing. |
| On 30 July, with the season about to start and player reinforcements clearly needed, the Glazers released their 167-page prospectus, tweaked a fortnight ago, to sell 12 million shares at $17 each in Manchester United plc – registered by them in the Cayman Islands tax haven and floated on the New York stock exchange. The document extols with familiar breathlessness the money made, the 659 million global “followers” for United and listing 29 of the club’s “global and regional” sponsors, from Chevrolet on the shirts, Japanese instant noodles company Nissin, to Cho-a Pharm, United’s “official pharmaceuticals partner in Korea and Vietnam”. | On 30 July, with the season about to start and player reinforcements clearly needed, the Glazers released their 167-page prospectus, tweaked a fortnight ago, to sell 12 million shares at $17 each in Manchester United plc – registered by them in the Cayman Islands tax haven and floated on the New York stock exchange. The document extols with familiar breathlessness the money made, the 659 million global “followers” for United and listing 29 of the club’s “global and regional” sponsors, from Chevrolet on the shirts, Japanese instant noodles company Nissin, to Cho-a Pharm, United’s “official pharmaceuticals partner in Korea and Vietnam”. |
| At Old Trafford, the Glazers’ prospectus explains they have increased matchday income “by restructuring the composition of our stadium”. A section has been coralled for some fans who still like to sing in the way they grew into as kids, when entry was cheap, but the prospectus does not mention that. Instead, it stresses modern Premier League reality: “A particular emphasis on developing premium seating and hospitality facilities to enhance our overall matchday profitability.” The Glazers have also “changed the composition of our general admission seats,” creating many different “options” for buying a ticket and introducing, like most Premier League clubs, “a categorised approach”. | |
| This, the Glazers assure investors, means fans are now paying significantly more. “Between the 2005-06 season [the first after their takeover] and the 2013-14 season,” the prospectus says, “the weighted average general admission ticket prices for our Premier League matches played at Old Trafford increased at a compound annual growth rate of 4.4%.” | This, the Glazers assure investors, means fans are now paying significantly more. “Between the 2005-06 season [the first after their takeover] and the 2013-14 season,” the prospectus says, “the weighted average general admission ticket prices for our Premier League matches played at Old Trafford increased at a compound annual growth rate of 4.4%.” |
| That has been over nine years with inflation at historic lows, through the banking collapses and recession, which increased the strain on football supporters and lent leveraged financial buyouts such as the one orchestrated at United a toxic reputation. Now the fans paying the big money in their socially re-engineered football ground are looking down with dismay on the team United are fielding and increasingly questioning the Glazers’ and Woodward’s competence as well as their money-making motives. | That has been over nine years with inflation at historic lows, through the banking collapses and recession, which increased the strain on football supporters and lent leveraged financial buyouts such as the one orchestrated at United a toxic reputation. Now the fans paying the big money in their socially re-engineered football ground are looking down with dismay on the team United are fielding and increasingly questioning the Glazers’ and Woodward’s competence as well as their money-making motives. |
| The prospectus shows that while huge money has been taken out of the club to pay takeover debt, United were steered through potentially rocky years by the force of Sir Alex Ferguson and the sale of Ronaldo. That can be seen as the watershed, when United floundered in football’s dramatically inflating transfer market, first underspending, then turning to the comfort zone of promising Premier League performers, while allowing galácticos to go elsewhere. | The prospectus shows that while huge money has been taken out of the club to pay takeover debt, United were steered through potentially rocky years by the force of Sir Alex Ferguson and the sale of Ronaldo. That can be seen as the watershed, when United floundered in football’s dramatically inflating transfer market, first underspending, then turning to the comfort zone of promising Premier League performers, while allowing galácticos to go elsewhere. |
| Robin van Persie, Ferguson’s pre-leaving indulgence, and the hurried January signing of Juan Mata for a suffering David Moyes, were late exceptions. At the same time United’s youth team cadre, the Class of 92, were reaching the end of their wondrous service. Yet replacements for world class players such as Paul Scholes and Ryan Giggs remain theoretical. | |
| United’s financial picture does not look quite as bright as the club paints it, despite income for the year ended 31 March 2014 – £111m made at Old Trafford, £183m reaped by the sponsorships and other commercial sweating, and an extraordinary £128m from broadcasting income – totalling £422m, by far an English football record. | United’s financial picture does not look quite as bright as the club paints it, despite income for the year ended 31 March 2014 – £111m made at Old Trafford, £183m reaped by the sponsorships and other commercial sweating, and an extraordinary £128m from broadcasting income – totalling £422m, by far an English football record. |
| Yet the Glazer debt for a club that had no borrowings before the takeover, is still about £342m and finance costs were another £53m, reducing pre-tax profits to £22m. United’s cash reserves – £34m – would still be the envy of most other clubs but are shrunk from the £151m in the vaults in 2009. Ronaldo’s £80m sale, according to investment analyst and United supporter Andy Green, was spent paying off the Glazer debt. | Yet the Glazer debt for a club that had no borrowings before the takeover, is still about £342m and finance costs were another £53m, reducing pre-tax profits to £22m. United’s cash reserves – £34m – would still be the envy of most other clubs but are shrunk from the £151m in the vaults in 2009. Ronaldo’s £80m sale, according to investment analyst and United supporter Andy Green, was spent paying off the Glazer debt. |
| While United have declined dramatically since, failing even to qualify for this season’s Champions League, Ronaldo has raced on to win for Real Madrid a 10th European champions trophy. Sheikh Mansour’s Abu Dhabi multi-millions, combined with concerted professional planning and a top football chief executive, Ferran Soriano, have arrived to arm derby rivals Manchester City, while Chelsea, Arsenal and Liverpool have strengthened their squads and operations, concluding major signings early this summer. | While United have declined dramatically since, failing even to qualify for this season’s Champions League, Ronaldo has raced on to win for Real Madrid a 10th European champions trophy. Sheikh Mansour’s Abu Dhabi multi-millions, combined with concerted professional planning and a top football chief executive, Ferran Soriano, have arrived to arm derby rivals Manchester City, while Chelsea, Arsenal and Liverpool have strengthened their squads and operations, concluding major signings early this summer. |
| United, once impregnable rulers of the Premier League era, look hollowed out by contrast. Ferguson’s retirement loomed as the one big decision the Glazers faced after they captured United, yet there was no evident succession planning. Ferguson seemed to shock the Glazers when he finally announced his leaving and they then compounded the error by allowing him to anoint his own successor, the unfortunate Moyes. | United, once impregnable rulers of the Premier League era, look hollowed out by contrast. Ferguson’s retirement loomed as the one big decision the Glazers faced after they captured United, yet there was no evident succession planning. Ferguson seemed to shock the Glazers when he finally announced his leaving and they then compounded the error by allowing him to anoint his own successor, the unfortunate Moyes. |
| Player recruitment planning looks years behind City, where the board developed a dedicated system after Mansour’s 2008 takeover, installing a director of football, now Txiki Begiristain, working with managers and directors to a stated aim of two world-class players in each position, backed by limitless cash. | Player recruitment planning looks years behind City, where the board developed a dedicated system after Mansour’s 2008 takeover, installing a director of football, now Txiki Begiristain, working with managers and directors to a stated aim of two world-class players in each position, backed by limitless cash. |
| Woodward would argue United’s system is sophisticated, too, with the chief scout, Jim Lawlor, researching players in depth, then managers, now Louis van Gaal – his arrival delayed until after the World Cup – deciding who he wants. Rojo, Ander Herrera and Luke Shaw are the fruits so far, and Woodward would emphatically reject the perception that he struggles to close deals, arguing that agreeing terms with a club willing to sell is the most straightforward element of a transfer. | Woodward would argue United’s system is sophisticated, too, with the chief scout, Jim Lawlor, researching players in depth, then managers, now Louis van Gaal – his arrival delayed until after the World Cup – deciding who he wants. Rojo, Ander Herrera and Luke Shaw are the fruits so far, and Woodward would emphatically reject the perception that he struggles to close deals, arguing that agreeing terms with a club willing to sell is the most straightforward element of a transfer. |
| It is, though, baffling that United allowed three champion defenders – Rio Ferdinand, Nemanja Vidic and Patrice Evra – to leave together this summer, with no replacements signed except Shaw, the £27m 19-year-old left-back. Woodward now has less than two weeks to shore up the squad, with the season already started. | It is, though, baffling that United allowed three champion defenders – Rio Ferdinand, Nemanja Vidic and Patrice Evra – to leave together this summer, with no replacements signed except Shaw, the £27m 19-year-old left-back. Woodward now has less than two weeks to shore up the squad, with the season already started. |
| In another announcement to the New York stock exchange a fortnight ago, Manchester United plc said British investment firm Lansdowne has bought 7.5 million shares, half through two Cayman Islands funds, paying the Glazers $127m. This is what the family envisaged in 2005 when Woodward and his banking colleagues organised their high-interest takeover: that the great club itself would pay off the Glazers’ debts, and they would cash in. | In another announcement to the New York stock exchange a fortnight ago, Manchester United plc said British investment firm Lansdowne has bought 7.5 million shares, half through two Cayman Islands funds, paying the Glazers $127m. This is what the family envisaged in 2005 when Woodward and his banking colleagues organised their high-interest takeover: that the great club itself would pay off the Glazers’ debts, and they would cash in. |
| There may be a #GlazersOut day eventually but it will more likely be selling to investors at a great profit than a chasing out by fans, outraged at what has been done to their beloved United. | There may be a #GlazersOut day eventually but it will more likely be selling to investors at a great profit than a chasing out by fans, outraged at what has been done to their beloved United. |