How Glazers took over £1 billion from Old Trafford – Manchester United’s debt problem explained
The Glazers, Avram and Joel, completed a takeover of Manchester United in 2005, and from that very day, the club was plunged into debt that it is yet to recover from. (Link: The Glazers family tree and hierarchy)
It is easy for onlookers to remark that United are being backed in the transfer market, with the recent big-money signings of Casemiro and Lisandro Martinez floated as examples.
United fans have been, after all, promised by the men in charge that the debt will not affect the club’s spending, which, in hindsight, is a worrying statement with regards to the club’s financial health in the long run.
The club also brought in Cristiano Ronaldo, Jadon Sancho, and Raphael Varane last summer. Sure, the owners have sanctioned big-money deals for players in recent years, but those who follow the club closely know that the problem with their ownership of Manchester United runs deep.
Why do Manchester United fans hate The Glazers?
United fans pre-planned a massive protest against the ownership before the derby against Liverpool on Monday, August 22. It wasn’t the first time the fans did this and it won’t be the last – but it had many onlookers wondering why the fans are so ferociously opposed to owners that seem to be backing their managers in the transfer market.
To put it simply, the owners are taking money out of the club and seem least interested in the overall growth of Man United. A detailed yet straightforward Twitter thread from Joe Pampliano, who specialises in the business part of the sport, shines a light on this issue.
To start off, Glazers completed a “hostile and leveraged buyout” of the Red Devils in 2005 after taking out $1.2 billion in debt to fund the takeover process. This instantly put a 10-figure debt on the club in 2006, when they were completely debt-free before the Glazers’ majority ownership,
This was done via their investment in the NFL team Tampa Bay Buccaneers back in 1995. Their growth over the years permitted The Glazers to even think about owning a club of United’s stature a decade later.
Since the club’s IPO in 2012, our owners have sold nearly $700 million of stocks. But since $MANU “pays out a dividend, and since the Glazers still own about 70% of the club” they earn around $20 million in annual dividend payments.
The problem here is that the money being made isn’t being put towards the betterment of the club infrastructure at Old Trafford or Carrington. It isn’t being used as wealth capital and as compared to the likes of Aston Villa and Manchester City, United’s owners are making money from the club rather than putting their own cash in.
The club’s debt is almost identical to what it was 16 years ago, and its stock prices have also dropped as compared to the figures in 2012. The Red Devils, once the favourites to win the Premier League every season under Sir Alex Ferguson since 1992, are without a league title since 2013.
There have been rumours circulating that United could be put up for sale by the Glazers in the midst of recent protests. But it seems they know when to tactically buy players in order to dissipate any anger in the club’s global fanbase.
Ronaldo’s signing did that last year and Casemiro’s arrival this summer seems to have bewitched our fans. These short-term fixes are no solution to the club’s long-term problems.
The club are not in a healthy financial state. Rather than strengthening our financial foundations, the club seems to be making rather extravagant calls in the transfer market. Casemiro’s arrival could cost the club £140 million when all figures are combined.
The joy of beating rivals Liverpool should be measured. There are bigger issues at hand – one that can’t be solved if the fanbase isn’t united in its stand. United are currently valued at $5 billion.
We deserve better – owners that care about the club’s growth and the success of this glorious team. Roman Abramovich spent aggressively at Chelsea while Fenway Sports Group are measured in their signings at Liverpool.
Both teams have been more successful than United in the past decade while their finances have been healthy. Abramovich was notably charitable when it came to investing his own funds into the club while FSG are thought to be on the opposite scale of that.
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No United fan would cry for our potential new owners to replicate those two approaches like-for-like. But somewhere between that lies the proper way to run the institution- where the owners profit alongside the club. That’s the least we ask for.