All these years since their takeover, the Glazers only ever explained their intentions in one meeting with all staff.
“They said, ‘Look, we’ve bought this club because we saw an opportunity’,” says a former executive. “They never came with, ‘We are fans of the club forever and always will be’. They didn’t claim to be anything other than businessmen and they are very good at what they do.”
Two pie charts are displayed below on the business model page of United’s investor relations website, with one showing how commercial revenue stood at £66 million in 2009, accounting for 24 per cent of the overall turnover. Another from 2019 puts that figure at £275 million and 44 per cent of the total income.
Industry sources are perceptive enough to say this shift means no club would be better incubated from the financially debilitating crisis caused by the current coronavirus pandemic than United, whose wages-to-income ratio is 53 per cent, clearly one of the lowest in the Premier League.
“There is a bigger argument about the shape of the game,” argues a former director. “United didn’t change the face of football on their own. Barcelona, Real Madrid, AC Milan, Bayern Munich; all those clubs were chasing sponsorship money.”
Admittedly at the end of the day, nobody does it quite like United, who authored the proliferation of sponsorship categories with 25 global partners, 8 regional partners, 14 media partners and 14 financial partners – a total of 61 sponsors – listed currently on their official website. It is the realisation of the Glazers’ ambition when buying the club. Sources reveal that they were incredulous that United’s commercial revenue was smaller than that of Tampa Bay Buccaneers, despite NFL regulations limiting team sponsorships to a 75-mile radius.
“If you go to Tampa Bay, you can see sponsors plastered all over the place: a DIY chain, a chicken restaurant, a car dealership; they’ve got tonnes,” says a former executive.
The Glazers lost no time in quickly transposing the model to United on a global scale.
“The first new deal the Glazers did was with the Saudi Telecom — £5 million with no signage rights; just the branding in Saudi,” says an executive. “That’s when we realised there might be something to their approach.”
Another former director says:
“The stock market struggled with a company whose revenue is dependent on success on the pitch. It was undervalued.
“That’s what allowed somebody who did see the value in a global brand to buy it. Woodward sold it to the Glazers and they took the risk.
“I know they leveraged the deal but they did put their money into it. If it had all gone wrong, they would have been wiped out. Their view was, ‘We took the risk, we should get the rewards’.”
“The architect of their business plan and central to its implementation”. That’s how a former colleague ascribes to Woodward in relation to the Glazers. Once the takeover was complete, he left JP Morgan, the bank facilitating the Glazers’ lending, and “wrapped his arms” around United’s corporate side. Richard Arnold reported to Woodward, not Gill, when he joined as commercial director in 2007.
Edward Freedman was one of United’s key management executives of the 1990s signed by former chairman Martin Edwards. As managing director of merchandising, he turned United’s merchandising operation from a turnover of £1.2 million in 1992 to £28 million when he left five years later.
Freedman is certainly no fan of the Glazers and is openly scathing of the approach taken by them. “They haven’t got a clue what a brand is,” he tells The Athletic.
“It’s a very clever money-making move for them to get those deals. However, I’m sorry to say that, as far as enhancing Manchester United, it doesn’t work.”
It was befuddling to those not grooved into the Glazers swing of things then to see United suddenly becoming associated with Japanese noodle firms and Indonesian tyre manufacturers, and players engaged in promos handing out Mister Potato crisps.
One high-profile agent lamented that the club was “obsessed with commercialism” and was “one big money-making machine”, especially after seeing incidents like on one occasion when after arriving back in the early hours following a match at West Ham, some football stars were required to drive mini kids’ Chevrolets in a sponsored stunt the next day instead of resting.
“I really can’t deal with it,” Freedman says. “We were offered all that long ago and never would accept any of it. Not for all the money in the world. Then, of course, the people who understood the brand left and people came in who saw only the recompense of taking money.
“But taking money for things that aren’t compatible with your brand will eventually ruin your brand. That’s what I can see them doing. The whole charisma, the whole glory of Manchester United, seems to have gone.”
Ben Hatton, who for 10 years headed United’s commercial enterprises division, can still vividly remember the days of his “pouring scorn” over the Glazers’ approach while having a pint or two with colleagues in the pub after work but since leaving United 13 years ago, his opinion has changed appreciably.
He says: “Actually, working a lot more in American sport, they are a different breed. The business of sport in the US is exactly that: it is a business. That is why their sports franchises are, in the main, sustainable and ours are not.
“They do have that focus to say, ‘That is a pretty good business idea and, you know what, if you take a step back out of the parochial view on English football, it is a great idea,’” he enthused.
“If Manchester United score four goals at Old Trafford, who is not going to bid for the four balls?
“There were a lot of ideas like that and I often look back and think it must have been so very frustrating in the early days for these guys, looking at us little English folk from a northern town running what was, at the time, a small business.”
There are, as always, supporters with their noses too close to the mill who would strongly argue that football clubs are community assets rather than franchises as in the US, but in all fairness to the Glazers, United’s focus off the pitch had already begun shifting towards the balance sheets even before the Glazers had set foot on English soil.
Hatton further explains the club’s thinking from the time he joined in 1997.
“We were the first to go into the market to get some sense in numbers of what our fan base was,” he says. “The survey went to 23 markets – researchers, statistical samples – and we came up with 623 million fans. Our business plan and how we started to communicate with the analysts half-yearly was, ‘We will understand more about them: where they are, what they like, what they follow. We are going to enfranchise them and sell them stuff’. ‘Turning fans into customers’ was a line we created and the ethos of our business.
“The Glazer strategy was fundamentally different: it was all about selling an association with Manchester United. Their strategy was, ‘How finely can we slice this?’”
United, before the arrival of the Glazers, had been all the while trying to streamline their sponsors and not expand them, which are fundamentally divergent approaches.
“We had our main relationship with Vodafone and eight platinum partners,” says a former executive. “But we actually wanted to go in a more strategic, ‘fewer but bigger’ direction. Instead of having eight sponsors at £1.2 million a year, we’d have four at £5 million. But they (the Glazers) weren’t into any of that.”
Another director says: “It was just very different. It’s not right or wrong. The club, in terms of its marketing function, had been set up for relationship management. The whole aim was to make our sponsors feel they were getting a service that was second to none. So when the time came for renegotiation, they were ready to say, ‘We want to pay you more’.
“But that was a very different philosophy to the Glazers. They came with a view which was, ‘There are hundreds of companies in the world you’ve never heard of, all of which would be prepared to pay 10 times more than your current sponsors, so we are not really in the market to cultivate. We are looking to take the best offer on the table’.”
In those early days, Woodward and Arnold worked together on these sales deals in a small office in Mayfair. Having known Woodward for many years, Arnold was cognizant that the former’s suitability for the role quickly became apparent.
“He won’t leave the room until he gets the answer he wants,” says a source.
That mentality soon spread to his staff, and one worker even followed the executive of a potential sponsor on a family holiday to Bali to get the contract signed. It is this gung-ho, bite-the-bullet mentality that has characterized Woodward all this while.
Which is probably one of the main reasons justifying the Glazers’ faith in their executive vice-president, who happens to command the highest salary at the executive management level in the English premier League.
Even in those early days, Joel, Avie, and Bryan were already notorious for closely monitoring progress with their attention on details, leaving Gill to immerse himself in the football side of things. The brothers then committed to a bigger space housing 40 to 50 employees in Pall Mall at an annual rent of £5 million. The entire marketing budget was pegged at £600,000.
“Sanctioning that was a ballsy move. It was probably the biggest sponsorship salesforce in London,” says an insider.
Another adds: “It was a much more structured approach. They would maybe look at 100 countries in the world, take the top 200 companies in each, do research on them, and then approach them.”
United’s London headquarters were then expanded again to Green Park, while a Hong Kong office was opened to cater for Far East customers. Suffice it to say that this is a commercial approach that has also been adopted by the likes of Liverpool and Manchester City.
Industry sources are bubbly over talks of a new shirt sponsor currently “advancing very well” despite the pandemic. The club is able to remain attractive thanks to what the club’s investor website refers to as United’s 1.1 billion “followers”.
Interestingly, despite their burgeoning worldwide supporter base, United’s commercial revenues have flat-lined for the last four years and the club have already begun moving away from the regional partners model to focus on global sponsorships.
“They have paid a lot less attention to client relationships than we did, which could come back to bite them,” says a former executive.
“For a long time, their pitch was pretty simple: ‘Manchester United is the greatest football club in the world, why wouldn’t you want to be associated with that?’ But every year they go without success on the pitch, that will become a bit harder.”
Among other things that have been rammed down their throats, the Glazers have also long been accused of indifference towards silverware as long as the profits continue to stream in.
“Do they really want to win? I don’t know,” says a former colleague. “They wear the Super Bowl rings they won with the Tampa Bay Buccaneers. But they haven’t looked like winning since, so perhaps once was enough.”
The Glazers would be the first to scoff at the ridiculous accusation as there is a genuine belief now brewing within the club that manager Ole Gunnar Solskjaer is being heavily backed by the management to build an erstwhile team to seriously challenge for trophies.
Commercially, the shirt sponsorship struck with Chevrolet, worth £450 million over seven seasons, was a major success although the deal will not be renewed past 2021. Surprisingly, too, the person responsible for the deal at General Motors, Joel Ewanick, was dismissed soon after its announcement in 2012, with a spokesman saying he had “failed to meet the expectations the company has of an employee”.
There has been turbulence at United, too, with several marketing executives leaving United after struggling to fit in with the Glazers’ strategy. Hatton says: “They were very demanding and it was clear quickly that a strategic divergence of that magnitude was always going to require different people. We did some great deals but we were never sales guys.”
There were also other members of staff inherited by the Glazers who finally decided it was better to move on. Even some they hired did, too, as in the case of Lee Daley, a lifelong United supporter, who left a prestigious role in April 2007 as chief executive of Saatchi & Saatchi UK to become United’s group commercial director. Daley arrived at Old Trafford clutching his long-term vision to revolutionise the club’s commercial strategy by exploiting the social media boom only to resign after just four months, totally disillusioned at becoming what one source described as “a glorified sponsorship sales manager”.
Hatton, however, defends the Glazers’ style. “They were no more demanding than you would expect them to be, having walked into a football club where they knew the senior management and executive committee had actively criticised everything they were about for 18 months,” he says.
“They didn’t create a hostile environment. They are really nice people and phenomenally smart, Joel, Bryan and Avie particularly. They had a real understanding of the business of sport.”
A different colleague is quick to agree with that assessment, saying how the brothers are good at remembering the names of relatives when gathering for cup finals.
Others describe Joel as “thoughtful and measured”, always eagerly asking questions continuously. In fact, when the coronavirus crisis began, he was closely involved in decisions on goodwill payments to casual workers and the non-furloughing of staff. Joel is said to be “proud” that the club have never been investigated for financial fair play breaches or banned for transfer transgressions.
Apparently, too, Joel only sanctions signings after being convinced of their value and he is said to have confidence that Ole Gunnar Solskjaer is building a squad for success.
“Joel wants to weigh up other people’s opinions before coming to a conclusion,” adds a source.
Another former executive familiar with their methods on the business side paints a slightly different picture, however. “Joel would do most of the talking but Bryan was the loudest. Avie was meant to be the finance guy. They were all a bit like Donald Trump. Loads of bluster.”
Joel is regarded as “the big boss” and spends most of his working day on United with sources saying that he wants to be kept informed of everything and genuinely has an interest in football, watching lots of Premier League games on NBC, not just United’s. Avie still shows an interest but Bryan took a step back after getting married in 2015.
Multiple sources say the Glazers have, from the start, wanted the final say on “every little detail” but that their decisions are not quickly arrived at.
“There is so much analysis done on the back of every commercial decision,” says a source. “But that also meant I was never accountable if those decisions didn’t work out because I could always point to the fact it was the Glazers who ultimately signed it off.”
An agent says this approach has filtered down into the football side of things with chief negotiator Matt Judge, who worked with Woodward at JP Morgan, given minimal latitude to arbitrate:
“The Glazers micro-manage everything. That’s why it all takes so long to sign players or offer new contracts. It’s no coincidence numerous players have got down to the final year of their deals. It goes from Matt to Ed to Joel to Ed to Matt. It’s excruciating. And in that time, Liverpool have signed a player.”
On that front, the Glazers, when they are back on native US soil, are often not averse to requesting presentations on prospective transfers via video link sent from United’s London headquarters. The system, an immersive big-screen set-up, also connects to Manchester. Once the money is justified, then only would the signing be sanctioned.
From this one can surmise that having been stung before, there is a definite sense the Glazers do not want to be exploited by United’s status as a rich club. It’s clearly a ‘better safe than sorry’ situation, one that they cannot be faulted for.
Needless to say, others have a different takeout on things. “They can actually be accused of backing managers too much,” says a source. A transfer outlay of nearly £900 million since Ferguson retired attests to that, although suspicions linger that the modest expenditure in the market between 2005 and 2013 (around £150 million net in total) came as a result of needing to service the debt.
“As an outsider looking in, I think they have executed pretty well against the strategy they laid down all those years ago,” says Hatton.
“The step-change in television income, which came out of nowhere and could not have possibly been projected in a business plan, helped them massively.” In the UK alone, Premier League rights rose from £1.024 billion to £1.706 billion in 2007 and reached £5.136 billion in 2016. Sources insist the Glazers did project such an increase due to their experience in US sports.
Raising ticket prices was certainly part of the Glazers’ initial strategy. In those 2006 documents, they outlined their belief that tickets at Old Trafford remained “undervalued” despite having implemented increases of 12.5 per cent on average in their first season in charge. In particular, they suggested that United’s ticket prices were too low compared to those at the various London clubs and that “while Premier League teams in the north of England have historically been viewed as having a lower-wealth fan base”, the club’s research showed that “the perceived gulf in fan wealth is not enormous”.
Their projections included a further 36 per cent increase by the start of the 2012-13 campaign. “They introduced theatre-style pricing,” as one director described. “The better the view, the more you pay.”
But United have frozen general admission ticket prices since 2012 and that, in part, explains why annual match-day revenue has plateaued at around £115 million.
All things having been weighed, the Glazers’ status at United has been solid since the 2012 public offering (IPO) launched on the New York Stock Exchange (NYSE). Once banks bought shares, it gave validation to their model and crystallised a value vastly in excess of the takeover price. On the first day of trading, shares closed at $14 each, valuing United at $2.3 billion.
Although the Glazers had initially planned to float the club in Hong Kong or Singapore in late 2011, City of London sources say those plans were shelved by a combination of the exchanges wanting full financial disclosure, discomfort over the Glazers’ proposal to take most of the proceeds, and a lack of buyers at the kind of price they had in mind. This led them to the NYSE that was then eager for new companies, and the culmination of an eventual modest sale in the summer of 2012.
Credit ought to be given to the Glazers for having once hoped to tempt Asian investors to part with more than £600 million for the privilege of being associated with United, although they finally had to settle for £150 million in New York, half of which they banked. The rest was used to pay off some of the takeover debt they had put on the club’s books.
Rest assured the Glazers’ grip on United’s future remains secure because they split the shares into class A and class B, as they retain all of the class B shares that have 10 times the voting rights as the class A shares available on the NYSE. Overall, they own 78 per cent of the club.
By the close of play last week, the share price was $15.69, which would value United at $2.7 billion. United sources feel the Glazers have added £3bn in value to the club. At such a figure on paper, let alone what the Glazers would demand, it raises a pertinent question – who can afford to buy United now?
“I am sure they would walk if someone offered them $5 billion and I suspect $3.5 billion would start a conversation… there are just not many people around with that sort of cash,” adds an informed source.
There are also those who believe the Glazers may be waiting to see if there is another jump in broadcast revenues. “They want a ridiculous amount of money to get lost and there just aren’t many buyers out there at that price. I can only assume they are hanging around to see if Apple, Netflix, Facebook or someone like that really gets into live sport and supercharges the valuations again.”
So, 15 years on, all indications suggest the Glazers will be Manchester United owners for quite a while yet. Clearly the Glazers have not been given the credit they deserve for the savvy and focus they possess in daring to take the bull by the horns in managing United.
It would be prudent for observers and especially the United hardcore to be mindful that parochialism all too easily becomes the chains that would tie down and incarcerate a club like United whilst all the other top flight big boys in the last decade like Barcelona, Real Madrid, Paris Saint-Germain, Bayern Munich, Manchester City and Liverpool had already broken out of the proverbial box and undergone major paradigm shifts in elevating themselves to the status of the super clubs that they are now. It is all about corporatising professional football and necessarily sieving out the dross and soft, albeit well-intentioned, sentiments of those who remain recalcitrant in preferring that a most highly esteemed establishment like Manchester United remain a community club that they can presume to have their own designs on how it should be run. It is after all the big boys with the mega bucks who should rightly call the shots now.
To reiterate what Ben Hatton so succinctly crystallised of the Glazers, whom he comfortably admitted their intentions and brilliant strategies he had once misunderstood:
“They do have that focus to say, ‘That is a pretty good business idea and, you know what, if you take a step back out of the parochial view on English football, it is a great idea.”
The scenario of professional football has changed considerably. And the sooner the fans learn to embrace this inevitable, unavoidable truth, the better.