Birds of a Feather (2)

Glazer family chooses greediest bankers on Wall Street

Man United to use ’emerging company’ loophole to retain muddy reporting

With their valuation of Manchester United at £3bn ($20 a share), the Glazer Clan owners of the world’s most famous football club are, it seems to me, confusing the investment mood on Wall Street in 2012 (“This is a heavily indebted soccer club with a poor season behind it”) with the City of London at the height of the Dotcom Tulip in 1996 (“All things good must be excellent”).

We students of social psychology call this confusion ‘desperate greed’. So it is perhaps unsurprising that, for their launch advisers, the Glazers of Delaware have chosen the most desperately greedy firm on the Street of Covetous Mammon, Jefferies Group Inc.

But don’t just take my word for it: consult the numbers. The net income for Jefferies has fallen to $63.5 million (28 cents per share) vs. $80.6 million (36 cents per share) a year earlier. This is a decline of 21.2% from the comparative quarter. In fact, the company’s net income has fallen for the last three quarters. Over the last 30 days, analysts have not been optimistic about the company’s next-quarter performance. The average estimate for the third quarter is now 25 cents per share, down from 30 cents. For the fiscal year, the average estimate has moved down from $1.32 a share to $1.16 over the last thirty days.

Yet somehow, Jefferies felt OK about setting aside $870 million in the first six months of its fiscal year, enough to pay its 3,809 employees an average of $228,407. Goldman Sachs set aside $225,789 for each of its 32,300 workers. Average pay for the 26,553 people in JPMorgan’s investment bank was $184,989, or at least 18 percent less than Jefferies’s and Goldman Sachs’s reported figures.

This is of course a familiar banking syndrome: rewarding failure with ever-bigger salaries. But were I a stockholder in Jefferies right now, I would be asking two questions. First, why are salaries going up and my dividends going down? And second, why are you shmucks taking on the IPO Turkey of the Year?

Mike Ozanian at Forbes writes:

‘The amended filing for Manchester United’s public offering is going to give more of the IPO’s proceeds to the Glazer Family and less to the English soccer club than the original offering.”

The Manchester United Suporters’ Trust (MUST) wrote to Forbes pointing out that:

‘The revised filing reveals they now plan to take HALF OF THE IPO PROCEEDS FOR THEMSELVES. Furthermore the amount raised to pay down debt will be relatively insignificant (£75m) leaving £350m of their debt still on our club. There is now no doubt that this IPO is bad for Manchester United supporters, Manchester United Football Club and any investors gullible enough to pay the inflated price they’ve attached to inferior shares which have just 1/10 of the voting rights of the Glazers shares and no dividends. Their bare faced cheek is almost unbelievable.’

It’s hard to argue with that: as the FT points out, ‘The Glazers will retain class B shares, which have 10 times the voting power of the class A shares that are going to market.’

But here’s another little nugget – and classic Delaware sheister reporting bollocks: United filed as an “emerging growth company” to take advantage of provisions under the recently passed US Jobs Act, which allows companies with annual revenues of less than $1bn to delay some financial reporting requirements for up to five years. They can do so because, for the year ending June 30, United said it expected to report losses from continuing operations of £6m to £8m.

So: an MUFC going backwards in revenue terms seeks a premium valuation, using a lead launch bank…whose people get paid premium salaries, but whose results are going backwards in revenue terms.

Yes indeed, birds of a feather flock together…and sh*t on those below.

31 thoughts on “Birds of a Feather (2)

  1. Allow everything to be taken over by the pocket-lining obfuscators who twist everything to their advantage via impenetrable la-la land unregulated nonsense and this is what you end up with.


  2. …for all of us who didn’t make anything shorting facebook, is this now a second chance?!

    Or will this one have a big initial bounce and wipe out the early shorts? Wouldn’t that be ironic! But very much like life!

    …just as an aside, I wouldn’t say Manure finishing second was a “poor season”. They only have about the 5th best squad of players and relied heavily on two oldies to get there, and nearly won the damn thing – which would’ve been perhaps fergis best premiership win if he beat a squad worth damn near a billion over at city with his rag tag squad of oldies and so so players


  3. bad companies with bad management will get punished – surely thats a good thing, and what’s lacking from the current system.


  4. Presumably the Football Association carried out “fit and proper persons” enquiries about the Glasers.

    Or are they waiting until Man Utd go the same sorry way as Rangers FC?


  5. My brother in the UK is a ManU fan(atic) so I am “anyone but ManU” except, of course, when they play in international competitions when I become a fan. We are able to watch dozens of matches from EPL, Europe and South America on a weekly basis and with this choice give me Barcelona any time. As for the ManU float, it will be interesting to watch but neither long nor short shall I be.


  6. One wonders if HMRC are as lax with Man U as they so obviously were with Rangers for decades. The taxman’s eyes seem to glaze over when faced with the glitter of top-league sport, thus enabling/condoning all manner of creative tax accounting – or maybe he gets free corporate seats to assist with his wilful blindness.


  7. Fraud is fraud.
    There are so many ‘bubbles’ out there at the moment,maybe
    this IPO will be the prick in both senses of the word.


  8. Why does it take 13 banks to issue a fraudulent prospectus over Man U,when in 1980 Barings could do the same,by themselves, with NIMSLO,the legendary manufacturer of the world’s first 3D camera?Gerry NIMS sold out completely on flotation.,( that bit was in Appendix 5 ,from memory).The Glazers are clearly in the same bracket for honesty.If you were a talented teenage player offered a contract with Man U,would you sign?


  9. if wayne doesn’t get paid his wages there’s gonna be more broken windows in new york than on 9/11


  10. Whilst in matters football, this is how to get virtually every game alll over Europe and South America.

    1. Install the browser Google Chrome.

    2. Look in the top right (your right) corner and you will see a spanner.

    3. Click on the spanner and select ‘tools’.

    4. Click on extensions

    5. At the bottom right (as you look at it) you will see ‘Get More Extensions >>’. Select this.

    6. In the search box type ‘Chrome Live Football’ and search.

    7. Click on Chrome Live Football and then click on install. (it may download to a holding file in the bottom left as you look at it, in which case as soon as it’s finished click there, but mostly it will install itself)

    8. A small football will then appear in the top right (as you look at it). Click on that, select ‘live stream’ and reset the clock to GMT and it will list all the live games available all over europe and other places.

    You may occasionally need to install other programmes or the link you pick will only work on Explorer (in which case cut and paste the URL that appears into Explorer), but you will always get every EPL match (or any other). Sometimes you will only be able to find it with foreign commentary and sometimes you will get it in English. You’ll get about thirty links and you may have to look through a lot of them to get what you want. You will also get most La Liga matches, Greek matches, Italian matches and French matches as well as top matches from South America.

    Someone also asked about viruses etc. Google Chrome is actually far more secure than Internet Explorer so the risks are considerably less, but you should have decent virus/spyware programmes and run sweeps regularly as a matter of course.

    The quality will also depend on the speed of your internet connection. If you have super-speed and have a modern HD TV, consider connecting your PC to the TV via the PC socket on the side/ back.

    Cut and paste the above into a document and save it for future reference.


  11. @wacky
    As Brad himself said:
    “I say they’re just f—— w——. I cannot be doing with people like that. It justifies their own bone-idleness because they can’t ever imagine applying themselves to do anything in their lives. It’s easy for them to sit under a pseudonym on Twitter and write that sort of s—, rather than get off their arses in their own lives and apply themselves and work hard at something and achieve something. And that’s ultimately it. C—-.”

    See someone there, wacky?


  12. Well, quite. Who on earth would buy shares with next-to-no vote and little likelihood of dividends? Nobody investing his own money, surely?


  13. What intrigues me is Sir Alex’s position in this little drama.

    For all of his public persona Fergie is basically a man totally steeped in football culture; a coach who over two decades at a top club has built team after team that has delivered top trophies and whose mantra has always been “no-one is bigger than the club”.

    Surely he cannot be in with the carpetbaggers, as that would conflict with his own strategy to make the club consistently successful – robbing out wealth doesn’t exactly help with building good teams.

    He could simply be of Shankly’s “Holy Trinity” mindset where the board just write the cheques; he has no role in the financing of the club. That attitude works only if one can be sure that the cheques will be honoured.

    Or is there a long game? Let the Glazers hang themselves on the scaffold of insolvency, and Fergie produces a solution that saves the club?

    Maybe I read too many “Victor” comics as a kid?


  14. Pingback: Oh oh oh what a lovely Olympics! | A diary of deception and distortion

  15. you see, this is what is so wonderful about the olympics – the spirit of global community which overcomes all class-barriers and culturally indoctrinated difference to bring together even the biggest horses-arses in a happy harem of perfect harmony. superb stuff.


  16. i believe you’re a true communist-convert, brother boris…

    …jesus christ, i had a swift snifter of olympic-strength bog-bleach and i could swear i just saw a team of coke-cans playing soccer…?


  17. There are ‘special rules’ for football clubs, which makes them ideal money laundering vehicles for despots, gangsters and oligarchs from around the world.
    Just look at who owns them and you;ll see what I mean…


  18. Being no Man U fan even I hope that the Glaziers are sent packing back to their caravan parks where they started.

    It amazes me that they bought MU for under £900 M a club with no or negligible debt and they are partly cashing out valuing the club at twice the buying price and it now has many hundreds of millions in debt (thanks to those lovely Glaziers) and a club that has won only one trophy in the last three years (in today’s world JW ‘what have you done for me lately is SOP in management).


  19. Pingback: Glazer family chooses greediest bankers on Wall Street [The Slog] « Mktgeist blog

  20. Pingback: MAN UNITED IPO: Slog suspicions confirmed as US authority slams Glaser launch | A diary of deception and distortion

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