Glazer Gets Tampchester United
Tampa Bay Buccaneers owner Malcolm Glazer’s hostile bid for Manchester United and its stadium has led to an angry reaction from the British soccer club’s fans, although there seems little they can do to stop him from gaining full control.
Several newspapers said he may try increasing revenue streams by staging live music events, in the same way as major rivals Manchester City and nearby Lancashire Country Cricket Club.
He’s already gained the 75 percent stake he needs to turn Manchester United into a private company and is now able to take the famous football club off the stock exchange and transfer debts onto its books.
Some fans were so upset they staged demonstrations, burned cardboard effigies of Glazer and last week tore up their season tickets, but that was with only one game of the league season left, which Manchester United was playing away at Southampton.
Glazer had been unsuccessfully stalking the club since buying a 2.9 percent stake in March 2003, but persuaded wealthy Irish racehorse owners John Magnier and JP McManus May 11 to part with their 28.7 percent stake for £227 million.
Some £540 million of the £812 million Glazer needed to buy Manchester United has been borrowed, with £275 million of it coming from U.S. hedge fund managers Citadel, Och-Ziff Capital Management and Perry Capital.
Now that he has his 75 percent stake, the debt will be transferred to the club and will cost more than £100,000 a day to service. Over a year, that’s more than £36 million and roughly equal to the club’s annual profit after amortisation of player values.
Fearing ticket prices will soon be going up and Glazer will sell key players to recoup some of his outlay, fans threatened to disrupt the May 21 FA Cup Final between Manchester United and Arsenal and also The Derby, in which Magnier and McManus will almost certainly have a runner. The Irishmen could have blocked Glazer, but have become the butt of the fans’ anger as they preferred to sell out at £92 million profit.
The fans have also threatened to rock the boat by boycotting the products made by the club’s main sponsors. United has a 13-year deal with Nike worth £303 million and a four-year deal with Vodafone worth £36 million.
Jasper Gerard, writing in The Sunday Times, suggested, “Their gripe with Malcolm Glazer seems to be that he’s a ‘Yank,’ he looks like (author) Bill Bryson’s dad and he’s not as rich as Roman Abramovich (who bought Chelsea).
“If he were, they would welcome him with open wallets, wave the Stars and Stripes and accept Michael Jackson as chief youth team scout.”
The Daily Telegraph reported that Glazer will save more than £10 million a year by not having to pay the shareholder dividends the club has shelled out in each of the 14 years since it was listed on the stock exchange.
The paper also pointed out that Glazer would like to own 100 percent of the club, but it’s likely that fans who have shares would rather see them fall in value than take his cash for them. Shareholders United, the group most vehemently opposed to Glazer, has two percent of the club.
Normally, when an investor gets to 90 percent ownership he can compulsorily purchase the rest – as Abramovich did with Chelsea – but Glazer isn’t able to do that. Takeover rules state that a person buying a company must acquire 90 percent of the shares he’s not acquired at the time he makes his formal offer. As the formal offer wasn’t expected to be made until May 18 or 19, Glazer needs 90 percent of the 20-plus percent he doesn’t own – which means he needs around 97 percent before forcing the remaining 2 or 3 percent to be sold to him.
Another tactic being considered by the disgruntled fans is mounting a legal challenge to Glazer by showing some of the debt he’s accrued to buy the club is secured by future profits, which would be in breach of corporate law. However, Glazer’s advisers have been reported as saying the debt is secure without future profit being involved.
— John Gammon