At a cursory glance, especially to those who are on the other side of the glass looking in, it would certainly appear that the tenure of the Glazers has brought nothing but disrepute and calamity to Old Trafford besides bludgeoning it financially. At least that\u2019s what it would look like to the doomsday naysayers with their hoods and pitchforks raised in rebellion.<\/p>\n
For one, on the outflows side, the Glazers\u2019 assuming ownership of Manchester United has cost the club \u00a31.5 billion in interest, debt and other outgoings. Add to that the monies that the Glazers themselves have personally received, close to \u00a3200 million to date, from the club since spending \u00a3270 million in the \u00a3790 million leveraged takeover and it is not at all difficult to see why the general United loyalists are howling at the moon and baying for Glazer blood.<\/p>\n
Yet, on the plus side, if one were to look beyond the surface and probe a little deeper, the Glazers do not seem to fit into the mold of the typical Shylock only dead intent on squeezing every available dime out of the club and wringing it dry, as they\u2019ve been purportedly been made out to be by their detractors. It is only too easy to point an accusative finger and cast the first stone without first having prior foreknowledge and proper understanding of the Glazers\u2019 true intentions behind wanting to own a \u2018behemoth\u2019 football club like United and, more importantly, their modus operandi.<\/p>\n
The Glazers\u2019 lucrative commercial strategy was a drastic change of course for United upon their arrival, prompting numerous executive departures, but the strategy has since been copied with considerable success by other clubs, notable among which are Manchester City and Liverpool.<\/p>\n
Capitalism was the main disposition for considering every possibility that got the Glazers the club in the first place. The leveraged buyout, the scorching interest rates, not to mention the hundreds of millions of pounds of debt, may have been an instant turn-off to many, including numerous financiers, but the Glazer family, with patriarch Malcolm leading the charge at the helm, was zeroing in on a capitalist course from day one that they cast their glance at Manchester United as a business opportunity.<\/p>\n
Pros and cons debated, the Glazers should justifiably feel their gamble has paid off. Annual dividends total approximately \u00a384 million at the latest count, to which you can add \u00a375 million banked from the New York Stock Exchange listing together with soft loans to some of their other companies between 2005 to 2012, as well as further share sales. All in all, it means they have collected about \u00a3200 million. Not too bad for a non-US based sports franchise, one must say.<\/p>\n
Annual dividends are paid twice yearly with the latest tranch of \u00a311.3 million paid to shareholders in January. As owners of 78 per cent of the club, the six Glazer siblings split \u00a38.8 million equally. Another similar windfall in the form of a further cash dividend of $0.09 per share will be paid on June 3 despite the impact of the coronavirus crisis, perhaps giving context as to why player wage deferrals have not been on the agenda at United.<\/p>\n
United never countenanced furloughing staff either. The Glazers have been receiving flak for having taken up the special government option to delay paying their \u00a310 million VAT bill for a year while still finding \u00a33.6 million to buy shares and prop up the stock price during this period of uncertainty. And as yet no plans on further dividends are being made at this stage.<\/p>\n
The quarterly results released on Thursday revealed that United\u2019s net debt had risen to \u00a3429 million, mainly due to cash reserves having been depleted from the acquisitions of Harry Maguire and Bruno Fernandes. The gross USD debt principal remains unchanged at around \u00a3530 million.<\/p>\n
Another key area that has come under heavy criticism and scrutiny with Ed Woodward taking the sledgehammer blows is in transfer spending and player wages that have risen to record levels under the Glazers through the enormous rise in broadcast and commercial revenues. Compounded with the ignominy that there has been no genuine Premier League title challenge mounted since Sir Alex Ferguson retired in 2013, it is comprehensive that doubts remain linger in the minds of United\u2019s ardent fans over the Glazers\u2019, and Woodward\u2019s, wherewithal to govern for success on the pitch.<\/p>\n
Further concerns came not only from the debt placed on the club but also from the Glazers\u2019 PIK loans (worth \u00a3220 million) which allow borrowers to pay interest with additional debt, rather than cash. The three hedge funds \u2014 Perry Capital, Och-Ziff Capital Management and Citadel \u2014 who lent the money were entitled to demand seats on the board and a share of capital in United if payments had been late.<\/p>\n
\u201cOne of the big gripes we had was that in an NFL franchise, you can\u2019t leverage more than around 15 per cent in a takeover,\u201d says Sean Bones, who was a key member of Shareholders United 15 years ago. The current limit is a flat rate $350 million leverage, with the average NFL team valued at $2.86 billion, which equates to around 12 per cent. The Glazers leveraged close to 66 per cent of United.<\/p>\n
By the time the \u00a3790 million takeover was complete, it is believed the Glazers had put in \u00a3270 million of their own money \u2014 although some City of London sources are \u201cdubious\u201d it was that much \u2014 borrowing the rest and using the club as collateral.<\/p>\n
\u201cThey took a risk with the whole club\u2019s future that shouldn\u2019t have been allowed by the government,\u201d Bones argues.<\/p>\n
Richard Caborn, the sports minister at that time, counters: \u201cWe couldn\u2019t have put blockers on it. That would have been the regulators of the Premier League and FA. Once they\u2019d passed the fit and proper person\u2019s test, then there is little any government can do.<\/p>\n