Plans by the American owners of Manchester United to tackle the club's huge debt will not ease fans' fears
With England's bruising disappointments in the European Championship still raw, the Premier League's big news is that Manchester United are to be floated on the New York stock exchange. A pillar of English football is being re-routed to New York, via a holding company in the Cayman Islands, in order to reduce the £423m debt mountain which the American Glazer family loaded on to United to buy the famous old club in the first place.
Against heartfelt protests from thousands of United supporters who saw the Glazers' leveraged buyout for what it was, the American speculators borrowed £525m to buy the Old Trafford club in 2005 when United were debt-free, and had gathered the money for the expansion of their stadium to a formidable 76,000 seats without borrowing a penny. When their hostile takeover was done, the Glazers saddled the club with their own borrowings, and neither the Football Association nor the Premier League has ever expressed a murmur of disapproval about it.
Seven years on, the cost of servicing that debt and of two refinancings which have involved enormous bankers' fees, has been more than £500m. Yet as the latest financial figures declare, United's debt, the legacy only of paying for the Glazers' takeover itself, remains £423m. Sir Alex Ferguson has repeatedly described the Glazers as "excellent owners" to the dismay of clear-sighted supporters. The club's chief executive, David Gill, has insisted the debt and interest burden has not damaged the club's ability to invest in Ferguson's team, or its sense of itself as the grandest of clubs.
Those blandishments have worn thin. Last season United were pipped to the Premier League title by Sheikh Mansour's lavishly funded Manchester City, knocked out of the Champions League in the group stage, and dispatched by Athletic Bilbao in the Europa League. Hauling the 37-year-old Paul Scholes out of retirement to anchor the midfield was not the sign of a club in its confident prime with a large war chest at its disposal.
Now, after a proposed float in Singapore was pulled last year, the Glazers have revealed the preferred scheme their army of bankers have orchestrated: find other people prepared to pay off some of the debt while the family retains complete control. The $100m figure widely cited as all they intend to raise is not correct; in fact the Glazers will try to get investors to cover as much of their £423m debt as possible.
The 231-page registration document filed with the New York stock exchange in preparation for the United float is the latest Glazer candidate for the most depressing document ever produced containing the word football. It features a "reorganisation" map, so investors can navigate themselves through the tax havens within which Manchester United is to be harboured.
The Glazer family will retain control, via their company Red Football, registered in the low-tax US State of Delaware: "Red Football will remain our [Manchester United's] principal shareholder and will continue to be owned and controlled by the six lineal descendants of Mr Malcolm Glazer."
That strange and cold-blooded phrase means Malcolm Glazer's five sons and one daughter; United will be registered in the Cayman Islands and traded in New York, but will remain controlled by one US family. Investors will be invited to buy A shares in the Cayman Islands holding company. They will carry 10 times less the voting rights of the B shares the Glazers will issue to themselves. Also there is no plan to pay dividends to the investors. They are asked to buy shares to trade, perhaps on a daily basis, in the expectation their value will increase as Manchester United, described as "one of the world's leading brands," further exploits its commercial potential.
This stock market move is intended to reduce the debt and put United in a healthier position, which may provide Ferguson with more money to spend on building a side to compete with the cash-rich likes of City and Chelsea. Supporters, savvy from the start, see the financial interests of the Glazers serving themselves at the heart of it.
After an England team of triers – outshone by more sophisticated football cultures – tumbled out of the Euros, there followed the now regular two-year call for a revolution in how we run the game in England. The Premier League clubs, the Football Association and the whole game down to the grass roots, the argument runs, must pull together for the common good.
Days later, Manchester United – English football's most famous name – is to be flogged off in New York via the Cayman Islands, boasting to investors of its "brand". This hocking of legendary clubs has always seemed at odds with a coherent approach to building a great sport, a waste of the great opportunities the modern era has served up. Read More
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