In a move that will gladden the hearts of many Manchester United fans, their current owners, the Glazer family, have indicated that they are considering selling the club.
The Americans bought the club back in 2005 for a price of US $ 1.34 billion, but now they are ready to “explore strategic alternatives.”
Who are the Glazers?
Malcolm Glazer, who founded the family business and ran in until his death in 2014, initially made his money in the retail business, and they own dozens of shopping malls across the US.
In 1995 they expanded into sports franchises, buying the NFL team The Tampa Bay Buccaneers, for what was, at the time, an NFL record.
Following the death of the patriarch, his six sons – Avram, Joel, Kevin, Bryan, Darcie and Edward took over the family business.
Why are they so disliked?
The origins of the fans dislike can be dated back to how they first bought the club in a highly leveraged deal which loaded debt on to the balance sheet of the club. It means that the club is forced to pay millions of dollars in interest every year just to service this debt.
In addition, the two Glazers that remain involved with the club, have continued to take out large dividend payments, to the detriment of investing in the club.
Lack of investment
There has been a perceived lack of investment in the club and its facilities.
According to an esteemed expert on football finance, United have spent £118 million on their stadium in the past eleven years. That compares to the £278 million spent by Liverpool, the £374 million by Manchester City and the £1.4 billion outlay by Tottenham Hotspur.
The roof at Old Trafford leaks, and those standing underneath it are liable to get wet, particularly in a heavy down pour. In addition, in his recent controversial interview, Cristiano Ronaldo noted that there had been no evolution in the club’s training facilities since he had left the club in 2009.
Why sell now?
Although the Glazers have appeared immune to the criticism and wave of fan protests that come their way – they rarely attend games – they may consider that now is a propitious time to sell.
They will be aware of how much the consortium that eventually bought Chelsea paid for the club – the final sale price was US $ 5.2 billion – and might believe that, if they could get anything close to that, then that would represent an excellent return on their investment.
Who else is for sale?
Liverpool may also be for sale after their owners, Fenway Sports Group, admitted that they too are looking at various options.
It may be no coincidence that both Liverpool and Manchester United were initial backers of the failed European Super League project, which would have guaranteed annual revenues worth hundreds of millions of dollars in TV fees alone.
One of the key lessons from that debacle as that English football does not work in the same way as American sports, and that the average fan has a much more symbiotic relationship with the game.
Who might buy United?
There is certainly no shortage of potential buyers.
Sir Jim Ratcliffe, Britain’s richest man, who made his fortune in the chemicals business, and who already has several sporting interests, expressed his interest in buying the club in August, only to be told at the time by the Glazers that it was not for sale. A self-confessed Man United supporter, he would likely be the preferred choice for many of the club’s fans.
In 2010 a consortium called the Red Knights group tried to buy the club, and the leader of that bid, Jim O’Neill, a former boss of investment bankers Goldman Sachs, has not ruled out bidding again.
US private equity investors may also want to be involved in the conversation because of the worldwide marketing attraction of the Premier League.
According to the financial consultants Deloittes, in the past five years, more than two-thirds of the investments in the major leagues in Europe have come from the US.
And last, but certainly not least, buyers from the Middle East cannot be discounted. Manchester City are owned by the Abu Dhabi United Group, whilst the majority shareholders in Newcastle United are Saudi.
Apart from the commercial benefits, investing in a Premier League club is seen as a way of sports washing countries with less than spotless human rights records.
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