Without having so much as set foot in Manchester, he had been deplored by fans, savaged by the newspapers and frowned upon by the board. Some of those fans had even burnt his effigy. But generational wealth was at stake, and so Malcolm Glazer persisted. On 12 May 2005, the American businessman bought the 28.7% stake of Manchester United that belonged to the Irish horseracing tycoons JP McManus and John Magnier. Glazer now had a controlling share in Manchester United, English football’s richest cultural asset. .
It didn’t matter, in the end, that the buyout was secured with a loan that was secured against the club, and that the club would pay the interest. Glazer made no public remarks, but his money did the talking. The following month, he bought the club’s remaining stock. Further protesting would be futile.
We are now 20 years into the Glazer ownership. Malcolm died in 2014, but his sons Bryan, Avram and Joel took over as co-chairmen. And, if cash returns is your metric, the family’s two-decade reign has been a triumph. Turnover, which was £221 million when Malcolm bought out the racing tycoons, is now £662m. In buying the club, Glazer correctly called the rise of sporting globalisation, rode the tiger of potentially ruinous loans, and gambled successfully on the club’s untapped commercial potential.
As a result, he has made billionaires of his progeny. Last year, Sir Jim Ratcliffe bought a 27% stake last year, with each Glazer sibling pocketing, on average, £125m. Ratcliffe’s purchase valued the club at £4.6 billion — a near-sixfold increase on the £790 million at which it was valued when Glazer bought it in 2005.
On the downside, United were once perennial Premier League champions but haven’t won that trophy since 2013. Since reaching the final of the Champions League, football’s top club tournament, in 2011, they have featured only intermittently in the competition and never as serious contenders. This season they have reached a further nadir: 15th in the Premier League, three-quarters of the way down a league they used to dominate.
Were it not for those pesky league tables, the Glazers could claim this as one of the great leveraged buyouts of the century. The roots of that financial instrument whereby you purchase a company not with your own money but by borrowing on the value of the acquired asset, go back to the 1950s, but its popularity soared in the roaring Eighties. It was back in fashion again in the loose-lending 2000s, prior to the financial crash, which is precisely when the Glazers exploited United’s vulnerability.
Malcolm Glazer, famously, publicly uttered a mere 39 words about his ownership of that cultural institution, and only when he was doorstepped by a reporter. McManus, one of the two horseracing tycoons beaten to the club’s ownership, was a little more voluble.
“Why are you so interested?” Jim O’Neill, then a United board member and Goldman Sachs man, asked McManus.
“It’s just so cash-rich with no debt! It’s unbelievable!” replied McManus.
To run a publicly-owned company as though it were a sensible social enterprise was like trailing a bloodied corpse behind your yacht in the Gulf of Mexico. It was shark bait.
O’Neill tried to persuade the United board to launch their own leveraged buyout, just with a different end purpose but in vain because the Glazers had a head start.
The real asset for them was not the club’s bricks-and-mortar. Even the combined powers of the club’s legendary manager, Sir Alex Ferguson, and his charges, such as Wayne Rooney and Cristiano Ronaldo, were not what made United so desired by the Glazers. What was really valuable was the club’s fans. Some might call them stakeholders; others would regard them as willing dupes, easily monetised.
When you buy, as Glazer did, something that other people consider priceless, you are buying the ability to print money. A chronicler of the Glazer ownership, Chris Blackhurst, pointedly called his book The World’s Biggest Cash Machine. That’s a good approximation for the Glazers’ treatment of United. Since 2012, they have extracted £969m from the club in order to pay the interest on that initial loan. They have also taken £167 million in dividends.
Meanwhile, the Glazers have invested none of their own money. When the sun shone, and United’s revenues were the biggest in the league, they did not fix the roof. Now the Old Trafford roof is in such a poor state that match-goers have been drenched by cascades of rain. That £969 million could have paid for a whole new stadium.
Yet the fans will keep coming. United games might not sell out so easily, but the club remains, to millions of its fans, irreplaceable. To the Glazers, though, these fans are fungible economic units. And in this respect, the purchase of the club seems a product of its era. The mid-Noughties were a simpler period in modern age of globalisation, one where markets were opening up and popular dissent was not yet made manifest at the ballot box. Those who worked in manufacturing, though, were finding that their labour could be undercut. The markets, and their countries, had deemed them replaceable.
United’s fans were to make a similar discovery. Older fans would have recalled the 1958 Munich air disaster, which claimed the lives of 23, including eight players. The fans who attended the annual memorial ceremony might quite reasonably have felt their relationship to the club to be more than transactional. So might the fans who simply supported the club through the trauma and cheered the success that followed. But they, too, were replaceable, of no more value to the Glazers than were replica shirt buyers in Malaysia. It took 16 years for a Glazer to meet a fan group, and this took place only when the political winds had changed. The owners of the top English football clubs became so greedy they attempted to join a European Super League, which gave founder clubs like United guaranteed access. The founding Super League documents made it clear they were less bothered about what they dismissively deemed “legacy fans” and much keener on “fans of the future”: by which they meant malleable, younger, less revolting global followers on social media.
“It took 16 years for a Glazer to meet a fan group, and this took place only when the political winds had changed.”
Given United’s patchy record in qualifying on merit for the Champions League, the Super League might have been an elegant move, were it not for the unexpected backlash from fans and then Prime Minister Boris Johnson. The Glazers had manifestly failed to read the room, not understanding that, whatever assurances they thought they had, a populist, Brexit-empowered PM was no longer guaranteed to side with global finance.
Economic globalisation was no longer seen as an unalloyed good, as President Trump’s administration has now made clear, even if he persistently comes up with the wrong answers to the right questions. Tariffs are catnip for a despairing industrial working class but factories in the USA and UK aren’t going to be reopened. And United will never have the same relationship with its supporters. Even now the Glazers have turned over the running of the club to Sir Jim Ratcliffe, it has only deepened the gulf between legacy fans and management. Season ticket concessions for pensioners and kids have been removed and ticket price increased ,
The left-behind fans, the “little people” of Stretford and Salford, who cherish their club and enjoyed watching it succeed, might drown their sorrows with Boddingtons Bitter. But even then, they are no longer sharing in a local institution. In 2004, Strangeways Brewery, which produced the beer, was acquired by AB InBev, owned by Belgian families and Brazilian private equity; in 2005, the year that the Glazers bought United, the brewery was closed.
Still, somewhere in Tampa or Palm Beach, Florida, where Avram Glazer, Joel and their siblings Darcie, Kevin, Bryan and Edward have their homes, they will surely be raising a toast to their stunning success. It doesn’t matter that they and their placemen still have no idea how to run a football club. Once Sir Alex and his sidekick David Gill left, in 2013, things fell apart. The club became the epitome of what European clubs call “stupid English money.” Since 2013, without Sir Alex’s guiding hand, they have spent £1.5 billion net on player transfers, considerably more than any other Premier League club, and registered only one decent signing in that time: Bruno Fernandes.
As a result of this poor sporting performance, the club’s on-field losses have turned into financial losses. A club whose revenues were by far the largest in the Premier League now risks breaking financial sustainability rules.
All this is a far cry from the way the club was run before Malcolm Glazer arrived. The old board had to provide shareholders a return and was never loved by fans but they had invested in assets such as the stadium, built bridges with the community, and saved up financial reserves for difficult days ahead. The club was, self-consciously, a legacy business, looking to hand over a cultural institution to the next generation.
Jim O’Neill, the erstwhile board member and now Baron O’Neill of Gatley, campaigns for “profit with a purpose” in the global economy these days and invests in tech and science start-ups in the North of England. United, in contrast, have become a totem of what we could term “purposeless profit”: a cash machine rather than a community institution.
The inexorable pull of commerce has engulfed the club and hollowed it out, just as it has to so many other once-singular organisations. Thames Water customers will be familiar with this story, as will consumers of Cadbury’s chocolate, another victim of the dreaded leveraged buyout. Cadbury’s was acquired by US confectionery conglomerate Kraft in 2010, which promised not to close down the company’s Bristol factory, before promptly doing just that and moving production to Poland. The 19th-century founders of Cadbury’s were Quaker capitalists who would have intuitively understood O’Neill’s notion of “profit with a purpose”. They got rich, but they also built the village of Bournville, outside of Birmingham, to “alleviate the evils of modern cramped living conditions” so that their employees had decent homes, good education and green space in which to thrive.
In the era of globalisation, those acts of corporate kindness would have put the company at a serious disadvantage. It is an age in which we have been encouraged to trade our local or national identity in exchange for rising living standards. It shouldn’t be a shock to politicians that once the trade-off failed to deliver, people hankered after old tribal loyalties in order to make more sense of life. The dislocation of capital to far-off lands means that the have-yachts can toast their profits while factory workers lose their jobs, water companies flood their customers with effluent, and loyal football supporters are treated like cash machines. That would have been anathema to the likes of Cadbury. Ungodly, even. Though you can almost hear today’s billionaires snigger at their naïvety.
