MUFC FLOTATION: Glazer family fails to impress US playmakers, postpones flotation

United owners at best a joke, at worst an over-leveraged accident waiting to happen – sources.

I’ve been a Manchester United supporter since 1955, and so The Slog has been following the antics of the tragically failed cryogenic experiment Glazer family since they took over the club. The story so far is easy to relate: the greed of three United directors allowed the Glazers in,  following which they saddled a debt-free club with £600m of debt, took it off the market and began filing their accounts in Delaware, a State whose company reporting rules make Bermuda look positively indiscreet by comparison.

The Glazers borrowed too much against shady businesses when the going was good, and are now looking for mugs to give them yet more highly-geared Monopoly money so they can clear off the mounting debts. Asia’s massive fan-base made the Far East their first choice, the only problem being that Asians are smart and saw the scam coming a mile off. So there was a quick switch to New York, and an  even quicker decision by the Big Apple’s movers and shakers to switch off the proposed public offering.

I was putting the finishing touches to a piece about their reception in New York when the news broke last night that the family had ‘put off’ the flotation. The Daily Telegraph this morning notes that ‘the Premier League club has decided to temporarily pause its plans, as anxiety over the eurozone unsettles markets across the Atlantic’.

My enquiries of last week and this suggest that is complete bollocks. Last Thursday, one US-based institutional adviser told me:

“Their valuation of United’s stock is a joke. They won’t get any further in this town. They’re just a bunch of guys on the make. It won’t happen”.

This has proved to be a prescient remark. A trusted corporate legal source had this to say over the weekend:

“The Glazers don’t check out – at least, this is what’s coming back to me. The word is they need the money to survive, and it certainly shows in the way they’re approaching this. After Facebook, a lot of folks have grown up about hype. The dual-ownership thing in particular is seen as an obvious ploy to get money without responsibility. The mood isn’t there any more  for buccaneers like the Glazers.”

Today’s Telegraph piece certainly confirms that feedback: ‘Several institutions, including Sica Wealth Management and Beam Capital Management, earlier this month voiced doubts over Manchester United’s high levels of debt, and the dual ownership structure proposed by the American Glazer family’ writes Nathalie Thomas.

But the big question raised by this is where do the debt-laden Glazer family members go from here? United had, by their standards, a disastrous season during 2011-12. Manager Sir Alex Ferguson has been talking up his ‘kids’, but an increasing number of fans have their doubts about the current ownership structure. In the background wait the Red Knights, a well-heeled group of genuine Manchester United devotees who have been biding their  time, waiting for the Glazers to run out of road. Their time may well have come.

18 thoughts on “MUFC FLOTATION: Glazer family fails to impress US playmakers, postpones flotation

  1. I have never quite understood how a private equity company can buy another company with debt and then put that debt onto the shoulders of the company that has just been bought. That seems entirely wrong from an accountancy perspective and clearly opens the door to chancers like the Glazers to play games with other people’s money.

    • Indeed, and loading MUFC with bank debt means it makes no UK profits because of the large interest bill and therefore pays no UK corporation tax. This is a standard trick for any foreigner buying a UK company and they would be advised to do it by all large firms of accountants. Still at least we have the bonus of being a torch bearer for globalisation even if the small man on PAYE is making up the shortfall on Osborne’s tax income. He can’t be asked to pay for the university education of our young but subsidising global business rip offs is ok by our politicians.

      I’ve totally lost interest in premiership football, too much money and not enough local participation on the field. Same as politics and the finance sector!

      • “I’ve totally lost interest in premiership football, too much money and not enough local participation on the field. Same as politics and the finance sector!”

        Ditto the Olympics.

    • But wasnt it this which infuriated the movers and shakers when you know who bought Harrods all those years ago? Even before that I think I can recall a cops and robbers drama on the box where the baddie had done something similar. It was said to be against the law but to carry a minute fine.

  2. Their offer was “Buy second class shares that effectively give you no ownership power and also pay no dividends.” One would have to be a moron to buy such shares.

    • At least their offer was clear. More in keeping with a glazier than a Glazer admittedly, but transparent nonetheless.

      There’s many a public offering that achieves a similar return in stark contrast to the bubbly promises in the glossy brochures.

  3. It happened with us at Anfield with those two cowboys Hicks & Gillette. According to the intelligent sports press (the likes of Patrick Barclay), we were actually ajust before the take over by FSG less than 72 hours from being put into the hands of administrators.

  4. The problem with big-league sports (football, Formula 1 etc) is that they comprise two very different elements. There’s an emotional fan-base which continues to believe it’s all about sport and the relative achievements of their preferred champions, then there’s the commercial operators, for whom the sport is merely a convenient vehicle for financial manipulation.

    It starts at even minor league level, where local ‘entrepreneurs’ use the football club as a personal laundry, graduating to the mega-bucks level with the Premier League cash-cows.

    One must feel sorry for the committed fans, not particularly because they are abused at every turn, but because they seem too emotionally attached to the tenuous sporting action to spot what’s happening. Take the rose-coloured specs off, guys – it’s just a commercial entertainment run by crooks – save your emotions for things that really matter.

  5. A colleague gave me a good analogy:

    “A football club is a tube. You pour money in the top from the FA, TV rights and investors and it flows out the bottom into the hands of the players and the board.”

    When the tap is turned off at the top, the flow at the bottom ends pretty abruptly.

    The insanity that is players’ wages means that any upper tier club cannot survive without constant cash in-flow.

  6. Taking football clubs public, followed by a takeover by a small, cash-oriented group is not very clever. Yes, the clubs need enormous sums for the top players and manager, even above those that come from TV. But once the ownership gets into the public domain, anything can happen and it probably won’t be beneficial to the supporters (or players, perhaps).

    Much better to find another way of raising all those £millions. If there isn’t one, that is a message in itself. Certainly the supporters could never have raised the cash needed.

    • Definitely something we can can learn from Europe, the fans of clubs like Bayern Munich and Barcelona don’t let rich foreigners mess them about. Pity the EU hasn’t made a rule about it :-)

  7. I don’t get it. What’s the problem? Some loony guys and creditors might have lost some money…. or is it that the Bank of England is thinking of doing some QE on Manchester United stock?

  8. Pingback: Amazingly, the greedy Glazers are going ahead with the New York Man United flotation | A diary of deception and distortion

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