Boom Or Bust …
May 12 marks the first anniversary of United’s strange experiment with football’s version of ‘voodoo economics.’On this day in 2005, reclusive billionaire Malcolm Glazer, one of the 300 richest men in America, gained a dominant position at United by buying the 28% of shares owned by J.P McManus and John Magnier. Within weeks, the tycoon was able to acquire the 75% controlling stake in the club that made his position unassailable.Fans, who had previously seen off News Corporation’s take-over bid, were as furious as they were impotent. No laws existed to prevent the ‘hostile’ capture of United nor the sophisticated financial arrangements and astronomical borrowing that enabled its acquisition.
Only the biggest brains of the City could make sense of a deal which put debt worth hundreds of millions of pounds onto the books of the world’s then richest club. Many fans worried that nearly 130 years of history was in the hands of a shy, foreign speculator, with a business plan that could only impoverish the club and lead eventually to a Leeds United-style, fire-sale of talent.
The American CBC news service summed up the fears of many a supporter with its report that: ‘United fans, feel he (Glazer) will raise ticket prices, sell off the team’s high-priced talent and Old Trafford (the team’s stadium) in order to pay off his debt.’
The ground upon which the new owners would be judged was promptly established. One year on, just how great has been the impact on United of Malcolm Glazer?
United have announced that ticket prices will indeed rise by an average of 12 per cent next season. The Times reported last March that the owners have plans to raise the average cost of admission by as much as 54 per cent over the next four years. One – nil to the Glazer critics!
There have been no sales of United’s crown jewels so far but there have been no arrivals of star players either. Tabloid newspapers, with an eye to boosting sales, have fuelled frenzied speculation that Ruud Van Nistelrooy will leave to be followed by Ronaldo and even Rooney, the brightest of all United’s shining stars. Since the take-over, United have shopped mostly in the second tier of European football, with seven million pound Serbian international Nemanja Vidic, being the club’s most costly outlay. This contrasts greatly with the huge cheques United’s finance chief was signing in the six or seven years prior to the Glazer era.
Football’s finances have changed greatly since the 1990’s and with the exception of Chelsea, most clubs are redirecting their energies towards the recruitment and development of younger and cheaper players. To be fair, the Glazer family promised an annual transfer budget of 20 million pounds and have lived up to that commitment. On transfers therefore, the anti-Glazer case remains unproven.
The future status of Old Trafford has produced a sharp, categorical response from the United hierarchy.
‘We’re not going to rename Old Trafford,’ Chief Executive David Gill said last March. ‘We can go on record and say that won’t happen. I don’t think there’s value there and it’s not something we, or they (the Glazers), want to do.’
The long reach and emotional appeal of the media-friendly, anti-Glazer camp, has forced the Glazer family into playing a shrewd hand in the communications war for the hearts and minds of the United faithful.
Sir Alex and David Gill were vocal opponents of the deal that allowed the Glazer family to take over the club and might have expected to be removed by the new owner. However, both men, key elements in the United hierarchy, have kept their jobs and Fergie has even had his contact extended in a nod to continuity.
Though the team floundered in Europe last season, United claimed second place in the Premiership. A trophy sits proudly on display at Old Trafford, even if it is the less heralded Carling Cup. The team is three or four clever signings away from being great again. Two of Europe’s best players grace the United attack and will soon delight an estimated 76,000 customers, generating for the club, the highest match day revenues in Britain.
Judged by the highest standards of scrutiny, the anti-Glazer lobby may have over-stated its case. Even though most fans remain suspicious, a casual observer might be forgiven for thinking that one year on, United are far from the predicted crisis.
Upon more careful inspection however, the picture would appear far less rosy. Pressing financial realities have forced the new owners to take every measure needed to save cash and pay off debts. On- field football realities may soon force the club to move in the opposite direction, creating the potential for a tumultuous year ahead.
Increasing the ground’s capacity was an obvious solution to unsatisfied demand encouraged by a winning team. The years that followed that decision have witnessed the decline in United’s trophy-winning ways and the departure of bankable stars. The American owners will have to pull out all the stops to fill Old Trafford, or risk newspapers and television grimly recording the mass of empty seats next term, should United misfire.
Bankrolling Sir Alex in the transfer market would seem the only way to assure the success that would ease the crippling pressure of United’s debt mountain. Fergie and Gill have spoken publicly about the need to recruit top class midfield talent. Some wonderful players have been linked to United, not least Lyon’s Diarra, who is reputedly available for 25 million pounds.
However, the prices asked for players of the highest quality leave Fergie with little option but to lower his sights unless cash can be raised through sales. United could conceivably replenish the transfer kitty by selling Richardson, Silvestre, Brown and Van Nistelrooy but such a ploy would be a public relations disaster and weaken the squad.
So at a time when the Glazer family has forced United to adopt stringent financial cutbacks, it may well be asked to fund 30 to 40 million pounds worth of transfers and sell one or two of United’s more famous names.
Reports suggest the Glazer family is trying to delay interest payments on the United debt through renegotiating the repayment deal. A new 56 million pound shirt deal and some 50 million in profits per year are likely to help the owner get his wish. The club’s indebtedness has not undermined the understanding that United remain a significant cash generator of global importance. Future internet and mobile telephone transmission of United games are the key to new income from the team’s worldwide fan base.
Next season promises a clearer indication of the direction in which United are headed under Glazer’s leadership. What is not in doubt is the scale of the task set before the family and the reassurance still required by United fans that the club is in safe hands. The Glazer family projects confidence in its mission but only in a small part of Florida will this particular anniversary be celebrated with any great enthusiasm. AU
© Copyright: Absolutely United 2006
