News analysis
How Manchester United’s board and the Glazers failed the club
Man United were supposed to be too big to fail. However, when the Glazers – a family of prominent American entrepreneurs – bought the club in 2005 with a leveraged takeover, they plunged the club into debts of around £600m. What happened over the coming years is a classic example of a boardroom full of directors who ignored their duty to their stakeholders, particularly their fans.
Since 1980 Manchester United have been an attractive commercial prospect. Between 1984 and 1998 there were three separate takeover bids for the club.
American real estate billionaire Malcolm Glazer took a 3% share in the team in 2003. He already was involved in sport in the United States, being the owner of NFL franchise the Tampa Bay Buccaneers.
Over the following years he increased his stake in Manchester United, and by 2005, the Glazer family owned 98% of the United stock.
Where it went wrong
Despite Glazer’s fabulous wealth, he didn’t just use a credit card to purchase the club. Instead, he actually used a leveraged buyout, raising £600 million in loans which was secured against the club’s assets.
This brought huge financial obligations, with £60 million repayments due every year. On top of that was £200 million in other loans which were sold into hedge funds.
The Glazers could have paid these debts themselves, but they chose to use revenue generated by Manchester United itself. This meant syphoning away millions every season, and in order to make up the shortfall, they went about securing deals and sponsorships which would bring more money into the club.
Taking dividends out of the club
In 2010, United fans became distressed by what was happening, claiming that the owners did not care about them. They ultimately attempted to take over the club themselves but were not successful.
The Glazers went on to sell their shares on the New York Stock Exchange to pay down some debt and take home some cash. Malcolm died in 2014 and his sons retained ownership of the club.
In 2015, they decided to start taking dividends out of the football club, and fans blasted this action as the Glazers essentially paying themselves. Four years later, they had racked up a total of £90 million of dividends from the club leaving the fans feeling betrayed and hurt.
Ed Woodward
Fans think that the Glazers do not care about the results on the pitch, only money, and that this is not how a sports club should be run.
In 2013, chief executive David Gill was replaced with Ed Woodward, an excellent marketing man but lacking in football knowledge.
Over the eight years he was CEO, he refused to put in place a director of football or a proper recruitment structure. This led to the club spending over £700 million on players they did not need, while managers began to criticise a “toxic club culture”.
Sponsors and share price drop
The club’s current sponsor is Team Viewer, but that firm has decided not to renew its contract with Manchester United when it ends in 2026 due to the club’s plummeting share price. It dropped by a substantial £1.32 billion in June 2022, which proved to be a record free fall.
Ignored issues
While other Premier League clubs have renovated all of their facilities, Manchester United’s ‘Theatre of Dreams’ – Old Trafford – has been falling into a state of disrepair. There are leaks coming through the roof of the stadium and even infestations of mice, but the Glazers did not appear bothered to do anything about it.
In summary
The Glazers bought the club using the club’s own assets, saddled it with debt, and syphoned money through the club into their own bank accounts. They look likely to hold onto the side and one day sell it at a huge mark up – earning themselves a multi-billion dollar payday in the process.
The fans, meanwhile, can only look on in anguish as their once great club crumbles before their eyes.
