The Glazers might have a new option to consider when they sell Manchester United - ManUtdFC Blog

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Tuesday, May 4, 2021

The Glazers might have a new option to consider when they sell Manchester United

 
he Glazers might have a new option to consider when they sell Manchester United

It was a friendship that was only going to end badly.  The Glazer family was unpopular from the outset due to the way in which they acquired Manchester United by leverage, and they have accomplished nothing overtime to try to mend those differences.



A breakaway football team and complaints about their alleged usage of the club as nothing more than a cash generator have done nothing to derail the Glazers; meanwhile, the family has been able to use Ed Woodward as a focal rod for the hatred directed at them when remaining in the United States and basking in the glory of their beloved Tampa Bay Buccaneers winning the Super Bowl.

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The outrage from their participation in the Super League debacle may have done nothing to alter their tune - after all, what more is there to lose when you are still a figure of extreme dislike?

 

However, Sunday's demonstrations, in which fans gained access to the Old Trafford pitch and forced the postponement of United's match against Liverpool, must have sent a strong warning.

 

When Malcolm Glazer acquired an interest in United in 2003, it was still a publicly-traded stock, and he proceeded with a leveraged buyout two years later. 

It was a club buyout in which the Glazer family did not have to reach through their own pockets, instead of taking out loans guaranteed on the club's properties to the amount of £525m, with repayments - at exorbitant interest rates - coming from the club and, of course, the paying supporters.

The £525 million in loan financing has grown to £1.1 billion, with £704 million charged in interest, £244 million paid in debt repayments, and £125 million returned to the Glazers, United's controlling owners, in dividends.

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The rage directed at them is palpable, but will they sell up, even if they were, who will be willing to take on a club worth over £3 billion and saddled with £455 million in debt?



While the valuation of United could be about £3 billion, it is expected that the Glazers, if they were interested in selling, will like a far higher return, closer to the £4 billion levels.




When placed in a sports sense, the amount is enormous, but when applied to other companies, acquisitions well in excess of that size are normal.



However, while we can see football as a development industry with increasing yields year after year by broadcasting, the fact is that for many owners, it just does not generate enough money to support the outlay.

 

Sir Jim Ratcliffe, the owner of INEOS and French club Nice, has a net fortune of £16.5 billion - greater than Roman Abramovich - is a lifetime United supporter who grew up in Oldham. When scouring the market before taking over at Nice, he also balked at the valuations of Premier League clubs with his company head-on. The returns are just not there in comparison to the valuations, at least not at the levels that owners would expect for that amount.

 

The Middle East offers prospects for new investment, as shown by Manchester City's progress under Sheikh Mansour.

 

The prestige of owning a club like Manchester United is enormous, particularly considering that they are, undeniably, the biggest club in the world amid a relative lack of success on the field in the last decade or so.

 

But even such opportunities are restricted, and if the aim of the protesters on Sunday was to abolish the Glazers and make a better argument for fan inclusion on the board, will it be possible with such a move?

 

An intriguing theory that may be raised is organizational takeover rather than a human takeover.


"It's not out of the question that a large company, such as a software firm, would attempt to take over and add the club to their portfolio," football finance specialist Kieran Maguire, a lecturer at the University of Liverpool and author of 'The Price of Football,' said.



"Having Manchester United as part of the brand will have many advantages, and why not for tech companies like Google or Facebook?" Going forward, there are opportunities for the digitization of the company, to develop different experiences around football that will be of interest to firms like that, particularly for United's global fan base.

 

"While the ownership would be aloof, the odds are that anyone like that would not take from the company in the same way that the Glazers have done for their own personal gain."

 

The activities of Sunday resulted in a relatively minor decline in share price as stocks opened on the New York Stock Exchange on Monday.



It might have been enough to convince the Glazers that they should get through this latest episode. However, if the animosity persists and the Glazers stay down their course, the brand risks being poisonous, which will have a negative impact on the share price.


"Manchester United has become the golden goose for the Glazer family," Maguire said. "It seems that the Glazers are very defiant, and they have little intention to sell a company with which they make a lot of money when putting absolutely none through."

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