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. This is the second of a two-part summary of The Athletic’s report and examines where the club has reached after those fifteen years of Glazer ownership, how much of their investment the Glazers have already got back and what it will take for the family to sell Manchester United Football Club.
Part one looked at how the takeover happened and who the key players are.
How the Glazers are getting their investment back
As noted in Part One, 34% of the cash used to buy Manchester United – some £270 million – came out of the Glazer family’s own pockets. It was a big gamble for them, but The Athletic notes that they ‘will feel their gamble has paid off.’
‘Annual dividends total roughly £84 million at the latest count, to which you can add £75 million banked from the New York Stock Exchange listing together with soft loans to some of their other companies [and] further share sales.’
‘All in all, it means they have collected about £200 million.’
‘Dividends are paid twice a year and the latest tranche of £11.3 million went to shareholders in January. As owners of 78 per cent of the club, the six Glazer siblings split £8.8 million equally.’
‘A further cash dividend of $0.09 per share will be paid on June 3 despite the impact of the coronavirus crisis’.
61 Sponsors – is the Glazers’ business model a good thing?
That coronavirus crisis has obviously had a huge impact on United’s finances as reported here this week. But in a sense it is the closest thing to a vindication of the Glazers’ business model for United. The fact that they have built up such a huge list of sponsors – some 61 – means that the gate receipts and TV revenues lost due to COVID-19 are not the biggest part of the club’s income.
The Athletic reports that commercial revenue stood at £66 million in 2009, accounting for 24% of total revenue. By 2019 that figure had increased to £275 million, which was 44% of total income.
‘Industry sources say this shift means no club is better incubated from the current crisis than United, whose wages-to-income ratio is 53 per cent – one of the lowest in the Premier League’ the article notes.
However, United’s former manager director of merchandising Edward Freedman, who increased merchandising revenue from £1.2 million to £28 million in the space of five years, believes the Glazers’ model is flawed.
‘”They haven’t got a clue what a brand is,” he tells The Athletic. ‘It’s a very clever money-making move for them to get those deals. However, I’m sorry to say that, as far as enhancing Manchester United, it doesn’t work.”’
‘“We were offered all that [the sponsorship deals] long ago and never would accept any of it. Not for all the money in the world.’
‘”Then, of course, the people who understood the brand left and people came in who saw only the recompense of taking money.’
‘“But taking money for things that aren’t compatible with your brand will eventually ruin your brand. That’s what I can see them doing. The whole charisma, the whole glory of Manchester United, seems to have gone.”’
A former executive told The Athletic a similar story.
‘“For a long time, their pitch was pretty simple: ‘Manchester United is the greatest football club in the world, why wouldn’t you want to be associated with that?’ But every year they go without success on the pitch, that will become a bit harder.”’
The family’s approach to contracts, transfers and ground improvements
The Athletic quotes an agent who claims that ‘The Glazers micro-manage everything.’
‘”That’s why it all takes so long to sign players or offer new contracts. It’s no coincidence numerous players have got down to the final year of their deals. It goes from Matt to Ed to Joel to Ed to Matt. It’s excruciating. And in that time, Liverpool have signed a player.”’
The article continues: ‘The Glazers … have been known to request a presentation on prospective transfers via video link at United’s London headquarters… Once the money is justified, the signing is sanctioned.’
‘In the process, details can be missed in negotiations. One source tells of a player who was due a new contract — but the initial offer from Woodward and Judge was £10,000 lower than his salary at the time. “It wasn’t a deliberate ploy,” insists the source. “Because 30 minutes later, they ended up doubling his wages.” Woodward denies this.’
With regard to ground improvements, another source claims that the Glazers originally intended to rebuild Old Trafford, but they have long since given up on the idea because it would cost too much – ‘probably £1 billion’.
‘”But their neglect of Old Trafford is still very disappointing. The concourses are very tired and the customer service is terrible.”
What will it take for the Glazers to sell United?
The club is now worth £2.2 billion, according to the report, making another takeover very unlikely.
‘A reported £1.5 billion offer from Qatar found little traction in 2011; last November, talks were held with Saudi Arabia …but sources say the Glazers were only prepared to give up 20 per cent of the club.’
‘Saudi Arabia wanted control and have now turned their attention to Newcastle United.’
The outlet quotes ‘an informed source’ as saying ‘”“I am sure they would walk if someone offered them $5 billion [£4.11bn] and I suspect $3.5 billion [£2.9bn] would start a conversation… there are just not many people around with that sort of cash.”’
The article concludes that it looks like we will be stuck with the Glazer family for a very long time to come.
United might have to finish their Premier League season at neutral grounds as the authorities try to ensure player safety. How much do you know about those neither-home-nor-away games the Red Devils have played in the past? Take our quiz below to find out.