Another Twist In The Manchester United IPO Saga
The problem with a fundamental breakdown in trust is that whatever the motives may be for any of the parties concerned, they will be viewed with suspicion by those on the other side. Even with our most level of heads on, however, it is difficult not to view the timing of the resubmission of Manchester Uniteds proposed Initial Public Offering (IPO) with at least one eyebrow raised, and coming, as it does, the day after the announcement of a lucrative shirt sponsorship deal with the Chevrolet car company. The Glazer Family might well have the very best interests of Manchester United Football Club in mind in their new proposal – which, we understand, will imminently be going to the New York Stock Exchange – but even if we are as generous as we can conceivably be towards them, it is difficult to see what the massive benefit to the club would be, whilst the benefit to the owners themselves seems as clear as day.
We’re not at this stage going to go through the details of the revised IPO here – our suggestion would be to visit the website of Andersred for more detail on the subject – but it is, for those amongst us that haven’t been paying a great deal of attention to this story, instructive to give a brief outline of what has been going on at Old Trafford this summer. The original IPO was first announced through a draft prospectus several weeks ago. It was a curious enough document, offering no dividend or voting rights to investors, and there was considerable criticism of it, albeit with the caveat that at least the albatross of debt, which has hung around the clubs neck since the leveraged buyout which put the family in ownership of the club in the first place, might end up being paid off. Indeed, the document outlining details of the IPO stated itself that the clubs level of debt was problematic for it.
Such aspirations on the part of supporters, however, now seem to have been misplaced. Perhaps, to a point, they may have previously been ameliorated by the notion of paying down a huge chunk of the clubs debt. The revised IPO, however, has blown a hole in that theory for a lot of supporters. Under the revised plans, only around £75m will now go towards paying down the clubs debt, leaving it remaining at a still massive £350m. It is an improvement and some have argued that if there is a battle to be had against the owners of the club, then it is a battle that is better fought with them owning 90% of it than 100%. For others, however, there is a crucial moral point to be made here. If investors are to pay a significant, massive amount of money in the acquisition of shares, why should this money ultimately end up – and there is a semantic argument to be had about the specific ultimate destination of this money, but it’s an argument that reeks of straw men – in the pockets of a family that gives every impression of being little more than a persistent leech on the financial resources of a club which should be an absolute financial juggernaut.
And then there is the small matter of Sir Alex Ferguson. For an overwhelming majority of the clubs supporters, Ferguson retains the status of a demi-God, impervious to any criticism. However, even this has started to waver for some in recent weeks. It was only recently that Ferguson described the family as “great” and suggested that “the majority of real fans will look at it realistically and say it’s not affecting the team”. Some of those that criticised him at that time were shouted down, but the news that senior employees at the club may benefit from a share scheme worth up to £204m has caused further indignation amongst what seems (on the basis of a quick and unscientific poll, from having a flick through a few message boards and forums) to still be a minority of United supporters. We can’t say definitively, of course, whether Ferguson will benefit from such a scheme and whether it was this which informed his previous comments, but there is something of a feeling that discontent – which probably peaked for the green and gold campaign two seasons ago – could start to rise again in time for the start of the coming season.
It would be nice to say that this sort of detail may come back to haunt the Glazers come the start of the new season, but there is little to suggest that they will give a damn what the supporters of the club think. Meanwhile, the Premier League itself, lords and masters of all of English football – regardless of what the Football Association might think on the subject – will sit back and say nothing on the subject. Yet it is precisely the situation that we are seeing unfold at Old Trafford that is the reason why the ownership of football clubs in this country needs greater governance and the laissez faire standpoint of the league on this subject has failed so dramatically, regardless of what the spin machine tries to impress upon us. That this sort of money should trickle away from any football club (both interest payments on a debt that probably shouldn’t have come to exist in the first place and into the pockets of those responsible for that level of debt), that what should be the healthiest club in England should still find itself owing hundreds of millions of pounds after an IPO and that there is no will from anybody in any position to do anything about it – or even to prevent it from happening again in the future – is a hopeless structural failure on the part of English football as a whole. In the meantime, the Manchester United cash cow continues to be milked for all it is worth, and the Glazers remain both a symptom and a cause of the malaise within top class football in this country.
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