Andy has been writing about United for decades and this piece, translated from the Norwegian Manchester United website, takes a look into the state of United and makes for an insightful and knowledgeable read that takes an in-depth look and discussion at the financial transformation that has happened at United over the past 2 decades and what position United find themselves in the modern day. Mitten writes intellectually and backs up his points with both analogies an evidence and it makes a great read that is as subjective as one can be on the subject.
When Manchester United issued their financial results in the past, I was pleased if they were healthy and used to goad City supporting mates that their club couldn’t hold a candle to United’s success. I wasn’t comfortable with the rampant commercialism at Old Trafford which began in the early 90s, but I was proud that the club I supported was so well run and successful. United’s share price rose exponentially in the 90s. I know lads who struggled to get £150 together when the shares were floated in 1991, yet sold them for such a profit that they could afford to go on a pre-season trip to the Far East just five years later. United’s value boomed alongside the club’s profile and profit line. It was a capitalist’s dream and a bit of a surprise that they did so well because United shares were heavily undersubscribed when they were first floated. The float was viewed as a bit of a flop as serious investors didn’t think there was money to be made from football. There isn’t usually, but United aren’t your usual club.
The success of the club started to attract predators. A BSkyB led takeover attempt was thwarted in United’s treble season by a mixture of fan protests and government interference, but the predators didn’t stray too far from their prey. By 2004 Malcolm Glazer and sons had bought double digit shareholdings in the club. I interviewed David Gill that summer in Chicago and he spoke well of the Glazers and their “passion for sports”. United fans didn’t share his enthusiasm and the protests were wide ranging but ultimately futile, failing to stop the Americans from taking full control of United in May 2005. Somewhere along the line I stopped being so enthusiastic about United’s financial results.
Despite public utterances of support from the two Sirs – Alex Ferguson and Bobby Charlton, the Glazers have been unpopular ever since, so despised that they cannot visit Manchester without security. It’s different in the US where they mingle more readily on United’s pre-season tours and they were even pitch-side before the recent MLS All-Stars game in New Jersey, with photographers training their lenses for a rare photo of them all together.
The Glazers and the takeover have been the major issue for a lot of fans since 2005 and arguments still rumble. Friends have fallen out and 2,000 Reds who once made up United’s hardcore now watch breakaway club FC United. It’s a huge dispute among a relatively small group of people because most United fans don’t care who owns the club. Colonel Gaddafi could buy the club and the majority of fans wouldn’t be bothered so as long as the team continues to win and he promised to buy Wesley Sneijder. It’s sad, but true. There would be some opposition, but Gaddafi could appoint North Korea’s Kim Jong Il as director of communications and the Burmese military junta as his board and he’d still get away with it because most fans are just focused on results and, as a bonus, decent football.
Issues like ticket price rises are of little or no concern to most overseas fans, who can only dream of one day attending a match at Old Trafford. I attended a supporters club in Cape Town in 2009 and the club’s ownership was not even on the radar. What mattered to those Reds, quite rightly, was who was playing, scoring and whether United were winning. United’s many new sponsors want to connect with fans all over the world who support United for the love of it and are optimistic about the future. They want the feel good factor of linking their name to United and the benefits which follow. The club’s latest financial figures, which were released last week to show record turnover and operating profit, don’t even include United’s recently announced a sponsorship deal with DHL. The logistics company will pay £10 million a year to sponsor the training kits. There’s not a club in world football who wasn’t envious about that deal.
A few days after the deal, Ferguson criticised the Football Association. His words caused such a stir that they were broadcast around the world – with DHL’s logo behind either shoulder. The investment was starting to work for DHL before the week was out. After five or six years of uncertainty about United’s huge debts, the Glazers are getting on top of the figures. They are overseeing exponential rises in revenue, especially commercial revenue from the sponsors. That is allowing United to pay off the huge amounts of interest to service the debts, the Glazers to take money out of the club (£51 m in the last 12 months) and still reduce the debt at the club. That’s how powerful United’s earning power is.
I’m no fan of highly leveraged takeovers of football clubs, the Glazers and their motives, but they saw vast potential in United, used other peoples’ money to buy the club and now they are reaping the rewards, just as they will do when they eventually sell out. Not that most fans care so as long as the team keep on winning.
Original transcript: Manchester United Scandinavia