Fifteen years ago today Malcolm Glazer effectively ‘bought’ Manchester United. It was the day the board wrote to shareholders saying they were selling their shares to the Glazer family and advising them to do the same.
The Athletic has done a detailed analysis of the history of the Glazers at Old Trafford, speaking to a number of sources, both named and anonymous. They have uncovered some interesting and little known facts. This is the first of a two-part summary of The Athletic’s report and looks at how the takeover happened and who the key players are.
The Athletic reports that in order to take control of United, the Glazer family invested £270 million of their own money and borrowed the rest -some £520 million, using the club as collateral for much of it. They therefore took a debt-free club and bought it with 66% of borrowed money.
The money was not just borrowed, it was borrowed under a ‘dodgy’ scheme that allowed the interest to be paid by more borrowed money – a practice that many thought the government should have been able to stop.
‘The three hedge funds — Perry Capital, Och-Ziff Capital Management and Citadel — who lent the money were entitled to demand seats on the board and a share of capital in United if payments had been late’ The Athletic notes.
The practice would not have been allowed in America, where NFL clubs are only allow to leverage a maximum of 15% of the club’s value. But there was nothing that could be done to stop it happening in the UK.
People fighting the takeover included the then CEO of the club, David Gill. The report states that Gill sold £1.3 million of shares to a board member to try to keep them away from the Glazers and made a sizeable donation to Shareholders United.
Gill called the Glazers’ proposals ‘aggressive’ and ‘potentially damaging’, although The Athletic claims that ‘Gill now denies stating “debt is the road to ruin”, the words that are stretched across a famous green and gold banner.’
The Glazers kept Gill on for five more years during which time his salary increased from £1 million to £1.95 million.
Ole Gunnar Solskjaer was also an opponent of the takeover. The Athletic notes that ‘Solskjaer signed up to the resistance movement in February 2005 after doing extensive background research. He remains listed as a patron on the Manchester United Supporters Trust website.’
The Key Players – Ed Woodward and Joel Glazer
Ed Woodward was apparently the architect of the Glazers’ business plan and ‘central to its implementation’. The Athletic reports that it was Woodward who saw ‘the value in a global brand’ and ‘sold it to the Glazers and they took the risk.’ This may perhaps explain, at least in part, why Woodward continues to run the club despite some of the seemingly horrendous mistakes he has made.
Apparently the executive vice chairman speaks to the Glazer family every day ‘without fail’. He is paid a salary of £3.16 million, which is the highest of any Premier League director.
Joel Glazer is the family member who is most hands-on in terms of United and in many respects operates as the president of the club. He and Woodward are particularly close and ‘Woodward has been known to tell of the occasion the pair ended up in a heap together in the stands of Moscow’s Luzhniki Stadium while celebrating the Champions League final victory over Chelsea.’
Unlike his late father and instigator of the United takeover Malcolm, Joel is reported to be an avid fan. He has a huge picture of George Best in the 1968 European Cup final hanging in his boardroom and has a replica of the Old Trafford dressing room in his offices.
Yet as The Athletic notes and as most fans are aware, the family’s primary motivation is to make money. There was little investment in transfers until the debt was refinanced in 2013 although Sir Alex Ferguson himself has said that the Glazers always supported what he wanted to do on the transfer market.
In the second part out later today, we examine where the club has reached now after those fifteen years of Glazer ownership, how much of their £275 million investment the Glazers have already got back and what it will take for the family to sell Manchester United Football Club.
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