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Don’t be surprised to see the Glazers cut and run

It may only be a gut fee

ling but one cannot help but sense that the hostility of Manchester United fans towards the clubs American owners is beginning to show early signs that it’s starting to turn. A protest organised against the Glazers on Sunday is reported to have attracted around 3000 people, a spit in the ocean when compared to the 75,000 who attended the Spurs game twenty four hours earlier It raises the question as to whether the Glazer family has embarked on a calculated public relations charm offensive to win over their critics.

Just in the last few weeks 1) Joel Glazer got directly involved in the Wayne Rooney dispute and was prepared to open the cheque book to ensure that the striker renews his contract. 2) The family committed a hefty transfer kitty to reinforce the playing squad even though Sir Alex Ferguson has insisted that none of it will be used until the summer and 3) Gave the club an expensive go ahead to buy some of United legend Nobby Stiles’ medal collection at auction, something which the club had never previously done.

All those moves went down well with the majority of fans but you begin to wonder if there were other motives behind those unexpected decisions. Of course it could be no more than sheer coincidence that all this happened after fellow American investors Tom Hicks and George Gillett saw the Liverpool Football Club taken off them in a bitter high court battle.

Common sense must tell the Glazers that they could very well be heading down the same road with the debt loaded on to the club getting larger by the day. While it can be no more than pure speculation, if old man Malcolm Glazer is as seriously incapacitated with illness as has long been reported, the brothers may be contemplating cutting their losses before being forced to walk away from the club with nothing – as the former Liverpool owners did.

And it could happen sooner than most of us think. If the next set of accounts show a similar loss as they did recently, the Glazers may have very little option and could be prepared to invite offers for the club within 12 or 18 months. Or is that simply wishful thinking?

Will the Glazers be able to hang on to Manchester United in the long term?

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9 Responses to “Don’t be surprised to see the Glazers cut and run”

  1. ChrisW says:

    Wishful thinking. The recent loss was down to one-off items relating to the debt restructuring.

    The Glazers won’t “cut their losses” because the are in profit – the club is worth much more than when they bought it. They will sell when they think that value has peaked and they are far too thick-skinned to worry about demonstrations.

  2. Tom Addison says:

    I went on The Game webchat with Gab Marcotti on The Times yesterday, asking what he thinks of the protests and whether he thinks they’ll work. He’s hugely in favour of it, but thinks it’s going to need to go a step further to work, perhaps by affecting the advertisers (I assume that means boycotting them) in some way. the protest helped I think in that it let the Glazer’s know that we’re still here, but these guys are on course for pulling off the biggest buy-to-let scheme in history, I can’t see them wanting out early.

  3. Frank Scicluna says:

    Must admit you’ve got me beat Tom. Can you please explain what the buy-to-let scheme is all about?

  4. Tom Addison says:

    Buy-to-let normally refers to people who get a mortgage to buy a house, get some tenants to live in there who will pay rent, and then use that rent money to pay off the mortgage. So in the end (afer however many years) you’ll have paid off the mortgage, you’ll own the house and it won’t have cost you anything because the tenants rent has been enough to meet the mortgage payments.

    So the Glazer’s have used a loan/mortgage to buy United, our profits are paying back the debt/mortgage, so eventually the debt will be paid off, they’ll own United and it won’t have cost them a thing, because it’ll be our profits that will have paid off the debt. Cheeky *******!

  5. The Premier says:

    Spot on, ChrisW. They HAD to sign Rooney, so that they can control the price at which they sell him – he would have gone for cheap in the next 12 months. This way, buying clubs have to pay the glazers’ valuation. I believe he will be gone by the end of next summer.

    I believe that the “transfer kitty” is an illusion. The June 30 numbers show money in the bank because of the time of year – it’s a snapshot in time. They will have waited until after July 1 before taking some or all of the 70 million pounds they can take for themsselves, according to the bond issue.

    They may sell up sooner than they are planning to. There are some moves afoot outside of football to start controlling ownership and profiteering. I am surprised that with the UK’s current financial problemss, there hasn’t been a bigger move to impose a heavy tax on money that leaves the country – that sort of thing would hit them hard. Finally, I think that they are hoping for a ramp-up in internet revenues as games get put on the internet in a controllable way, without the leakage that occcurs now. I don’t thaink that will become as pofitable as they believe.

    LUHG

  6. Frank Scicluna says:

    That’s a very common practice here as well Tom, the major difference being the borrower is responsible for the mortgage. In the Glazers case, the mortgage became the responsibility of the club which should be illegal.

    @The Premier, I agree with what you say and have the feeling that the Glazers are laying the groundwork to sell. The interesting question is what role old man Malcolm is playing in all of this because by all reports he is virtually incapacitated. My sense is that his sons are in control and with so many of them, it will be difficult to reach unanimous agreement.

    I also agree that an increase in internet revenue is their major motivation but I can’t see it happening for at least another five years. I seriously doubt if they can hang on until then.

  7. The Premier says:

    As far as the old man is concerned, I believe he is curled up on a bed somewhere.

    I think that makes their family ownership a little less stable. From what I know of his history, he would always make the decision that he considered best for the family in the long term. From what I’ve heard of his urchins, they quite like to spend. So if there were a reason to turn off the club’s cash spigot, such as a downturn in revenues, the old man would have no trouble doing so, even if it meant living frugally for a while; the kids – I’m not so sure.

    That’s why it’s rather heartening to hear of the financial frailties of the family’s other businesses, including the NFL Bucs.

  8. Ella Patterson says:

    Firstly the Glazers are not to blame as far as I’m concerned. martin Edwards was the one who took us public and if anyone is to blame he is. The Glazers business interests in the US are failing so United is becoming more important to yhem so why would they sell it? I do not know what will happen, nor does anyone else but I just don’t see that 40 or so people, many of whom are hard nosed bankers, will be any better. They will have to borrow heavily and they will never agree with each other about ther running of the club. Be careful what you wish for as it might just be worse!
    Ella

  9. The Premier says:

    @Ella – WRT Edwards, it was a two-edged sword. Going public allowed the club to expand its revenues. Not all bad, but certainly set it up to be bought by leeches like the glazers.

    The Red Knights have come together specifically because they have an interest in putting part of the club into supporters’ hands, in a trust-type situation. They do not need to borrow heavily for the purchase, and they are not interested in a large return on their investment. The problem with the glazers is that save for some nebulous “performance covenants” there is no limit on what they can take out of the club, plus they have no interest in the club winning sttuff, beyond what is necessary to keep their “business plan” afloat. One need only look at their NFL franchise to see the way they operate.

    As far as running the club, the issue of “40 voices” is a red herring – it is relatively easy to put one football manager in place, who has the freedom to operate the club, with the only limit being the amount spent each year.

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