Malcolm Glazer, owner of the Tampa Bay Buccaneers, is now also the owner of Manchester United—the second most successful team in the history of English football and, by most measures, the wealthiest football club in the world. Glazer’s purchase is an achievement that leaves Manchester United supporters in angry disarray, and poses some very difficult questions both for the American businessman himself, and for football in general.
It is possible that Glazer’s grand adventure into English football will bring Manchester United to its knees, and Glazer along with it. It is also possible that it will corrupt football as Europeans know and love it, tear the game completely away from its working class roots, destroy clubs that have survived in their local communities for over a hundred years, and replace the beautiful game of the people with a megabucks, televisual farce that I would liken to the American NFL.
It took a two year war of controversial financial attrition and a little under £800m ($1.5B) for Malcolm Glazer and his son Joel to complete the acquisition of Manchester United. On May 23rd, 2005, the Glazers were finally able to announce that they owned 76.21% of the club. This statistic represented a key moment in their campaign. As the owner of more than 75% of the company’s stock, Malcolm Glazer was then (under British company law) able to delist Manchester United from the London Stock Exchange and transfer the debts he incurred in purchasing the club onto its own books. On June 22nd, he did just this, ending the club’s 14-year stint as a publicly traded company.
Manchester United supporters have long been concerned about Glazer’s intention to burden the club with his debt, and have been vociferous in campaigning against the American. Over one third of the financing of Glazer’s bid was debt secured against the club’s assets, including its Old Trafford stadium, while a further £275 million came from loans from three US hedge funds. Supporters fear this debt will be paid by raising ticket prices, by attracting more corporate sponsorship to the disadvantage of the average supporter, and by reducing investment in the team itself.
Stories in the British media have suggested that manager Alex Ferguson’s plans to challenge English Premiership champions Chelsea could be hampered by financial restrictions at Old Trafford in the wake of the takeover. Major sponsors Nike have already warned Manchester United that a continued lack of success could cost them dearly, while there are reports that a limit of £25 million has been put on Ferguson’s annual transfer budget. Since Chelsea is bankrolled by the Russian oil billionaire Roman Abramovich, who seems to regard £25m as the price of a round of drinks, Manchester United supporters fear that the gap between the two clubs could become insurmountable. Although Nike signed a 13-year uniform deal worth up to £303m with Manchester United in August 2002, an escape clause will allow Nike to walk away from the deal in July 2006. The company’s Vice-President of Sports Marketing, Ian Todd, has admitted they will be monitoring United’s progress closely following their failure to win a trophy last season. He told The Sunday Telegraph: “We don’t know what is going to happen next year. All options are open. Chelsea won the league this year, Arsenal won the FA Cup and Liverpool won the Champions League. So you could argue that Manchester United is only the fourth-best club in England at the moment.”
To make things worse, it has been suggested that the scale of Glazer’s debts may affect Manchester United’s future participation in the Champions League—where a successful run through to the final can be worth more than £40 million. The executive committee of UEFA, football’s European governing body, is expected to approve new, tougher licensing rules focused on club debt that will come into force at the start of the 2007-08 season.
Carrying on regardless, the Glazer family has continued to build up its shareholding to the point that on June 28th, they were able to announce that they had secured 98% of the club’s stock, taking them past the 97.6% level needed to force a compulsory buy-out of the remaining stock. In short, Malcolm Glazer—who has already installed his sons Joel, Bryan, and Avi onto the Manchester United board—is now The Man at Manchester United. Much to the disappointment of a vociferous element in their fan base.
Shareholders United, for one, is a leading anti-Glazer group that at one point claimed to have over 28,000 members and to own 15% of the club. Although their claims of ownership have proved untrue, and their calls for match boycotts and mass demonstrations against Glazer have proved utterly ineffective, Shareholders United are still talking a good fight about their ability to (in the words of their spokesmen Oliver Houston) “put the squeeze on the parasitic Glazer.”
Clearly these supporters have been unimpressed by the protestations of Joel Glazer—who is expected to take an active role in running the club—that the members of his family are “avid” Manchester United fans. Houston claims that Shareholders United, with backing by the Japanese bank Nomura, plans to drive the Glazers out of Manchester United by putting a stranglehold on the club’s income and positioning themselves to buy a sizeable share of the club when Glazer is forced to sell up at a loss. One example of their tactics is a recent plea to fans to terminate their mobile phone contracts with shirt sponsors Vodafone, and sign up to other networks instead. Shareholders United claims to have forged a deal with two corporate communications firms which will net its campaign around £60 for each completed switch.
When the three Glazer brothers made their first visit to Old Trafford on June 29th, up to 300 fans protested outside the stadium and forced the trio to leave in police vans while fans pelted the police with missiles and the police in return used batons and scores of dogs to restore order. While one-time Manchester United legend Bobby Charlton gave the Glazer plans for the club his full approval, and apologized profusely for the behavior of the fans, the vice-chairman of Shareholders United, Sean Bones, took a more militant tack. He proclaimed: “The Glazer family are the enemies of Manchester United. We find them disgusting and repulsive. They may have captured the club but they only have it on a temporary basis. It might take a long time, maybe two or three years, but we are showing Glazer that we won’t give up. In the long-term the Glazer brand will be suffocated. The previous Manchester United brand was peerless in terms of sporting brand names. The Glazer brand is toxic and tarnished, uncool, and unstylish. Glazer will lose the war.”
Supporters of other clubs have little sympathy with the plight of Manchester United fans. As can be seen from the excellent spoof Manchester Buccaneers web site, most find the club’s plight hilarious. While United fans complain that Glazer is a profiteer who should not have been allowed to purchase their club, their rivals point out—usually in the most direct language available—that a football club that lives by the Stock Exchange can’t complain if it dies by the Stock Exchange. Their point is that Manchester United built its decade of dominance over English football on a financial superiority that was only achieved by floating the club on the Stock Exchange in the first place. Without the investment of the financial markets, they say, Manchester United would never have been able regularly to pay transfer fees like the £30 million paid to Everton for the services of teenage phenom Wayne Rooney.
In the eyes of most supporters, Manchester United has—at least until the arrival of Roman Abramovich—been the Great Satan of English football, dragging the national game further and further from its working class roots, prostituting itself to the world of commerce, and using its financial muscle to bully smaller clubs in England and Europe alike. The club’s supporters, then, long reviled for their arrogance, cannot be surprised to find that they are receiving little support from elsewhere. After all, the cynics say, if it was OK for Manchester United to join forces with baseball giants the New York Yankees in a 2001 joint-marketing deal billed as the biggest in the history of sport, then why isn’t it OK for them to partner with Glazer and become the Manchester Buccaneers?
The mocking hordes, however, might want to think again.
Alan Sugar, the Donald Trump-lite in the British version of The Apprentice and one-time owner of London club Tottenham Hotspur, has said he cannot understand how Glazer plans to profit from his purchase of Manchester United. The price he is paying, says Sugar, is simply too high. But as the dust begins to settle on the takeover, it is becoming clear that Glazer has ideas that may go far beyond the damage already done to the English game by his predecessors at Old Trafford.
Plan A, apparently, was a legal challenge to the English Premier League’s agreement for the collective sale of all TV rights, leaving Manchester United free to negotiate its own TV deals for both overseas and domestic rights. In the wake of a decision by the European Commission that effectively stymied that option, the Glazers are now believed to be attempting to persuade the elite football clubs of Europe of the merits of a breakaway European super league—independent of both the domestic Football Associations and UEFA.
European football has been here before. Back in 1992, UEFA revised the format of its premier club competition, the European Cup, to create the Champions League tournament in response to threats of just such a breakaway. In the late ‘90s, the Champions League was expanded to include still more teams after the threats were repeated. The Champions League is already highly lucrative for the leading clubs, but the distribution of the TV money is handled by UEFA, which again leaves the Glazer family little room to leverage Manchester United’s global popularity. A new breakaway European league appears to be Glazer’s only option.
If Glazer was successful, the consequences would be severe for the clubs left behind. First, they would lose their share of the collective TV revenues they have all come to rely on. The more vulnerable, smaller clubs would rush like lemmings over the cliffs of bankruptcy, and the survivors would find themselves locked out of the European love-in in perpetuity. This is because the ideal scenario for Glazer—and others of a similar bent—would be a European super league funded and owned by its participant clubs who would thus be guaranteed involvement every year without having to qualify from, or even play in, their own national domestic leagues.
A former director of Manchester United, and a former Director General of the BBC, Greg Dyke has said that Manchester United believes it could earn £25m a year from the sale of the overseas TV rights to the club’s domestic league games alone. Currently, they get just £5m—the same as every other club in the Premiership. Dyke says: “If the Glazer family think they could get away with (a breakaway European league) then that would explain why they have borrowed as much as they have.”
Silvio Berlusconi, the billionaire Italian Prime Minister, media baron and former President of leading Italian club AC Milan, will doubtless prove to be a major Glazer ally in such an undertaking. In 1998, it was Berlusconi’s Milan-based company Media Partners that forced UEFA to expand the Champions League and increase TV money for the clubs with renewed threats of a breakaway league. Although Berlusconi was forced to step down from his role at Milan in July 2004 after the Italian legislature prevented him from running any private business while in office, he still retains ownership of the club. The post of club president has been left unfilled while his younger brother Paolo remains vice-president. And the concept of a European super league monopoly would obviously appeal to Berlusconi. In 2001, he lobbied UEFA to provide his team with a wild card entry to the Champions League, even though they failed to qualify outright.
English football fans, therefore, would be wise to temper their pleasure at Manchester United’s apparent comeuppance with a healthy skepticism about the motives and methods of Malcolm and Joel Glazer. While those Manchester United fans currently apoplectic about the Americans’ exploitation of the financial markets on which their success was built, may instead come to praise Glazer if he delivers them to the promised land of Superbowl Soccer.
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// Marginal Utility
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