United against Glazer

ON August 18, 1989, ex-footballer and Isle of Man-based property tycoon Michael Knighton `bought' Manchester United for �20m. Infuriated fans, however, breathed a sigh of relief when Knighton's financiers backed out. The club was floated on the stock exchange in 1991, thus paving the way for its supporters to purchase its shares and have a say in its running. In 1995, the club's Supporters Association formed a share club to fund the purchase of shares, which was the foundation for today's Shareholders United, the group of 28,000 Manchester United `owner-fans' committed to preserve the club's independence from the big business that runs it.

ON August 18, 1989, ex-footballer and Isle of Man-based property tycoon Michael Knighton `bought' Manchester United for �20m. Infuriated fans, however, breathed a sigh of relief when Knighton's financiers backed out. The club was floated on the stock exchange in 1991, thus paving the way for its supporters to purchase its shares and have a say in its running. In 1995, the club's Supporters Association formed a share club to fund the purchase of shares, which was the foundation for today's Shareholders United, the group of 28,000 Manchester United `owner-fans' committed to preserve the club's independence from the big business that runs it.

Now, Shareholders United have been wrong-footed by 76-year-old American entrepreneur Malcolm Glazer, the owner of the Tampa Bay Buccaneers American Football team. Glazer has bought just above 75 per cent of the club's shares thereby gaining the authority to delist the club from the stock exchange. Shareholders United, who constitute 17 per cent of the club's shareholders, are trying to keep Glazer away from purchasing ninety per cent of the shares, which, if it happens, would result in a compulsory purchase. The club's fans have been staging demonstrations against the takeover. And, they are hoping that the ghosts of 1989, which Knighton saw, will return to haunt Glazer and his son Joel, who is expected to be the hands-on administrator of the world's most famous sporting club.

They reckon that they can deliver a blow to Glazer's intention of running the club by refusing to buy club merchandise and boycotting products of the club sponsors. Certainly a good shot considering the global brand Manchester United is — the importance the club attaches to branding is illustrated in its contract negotiation with David Beckham in 2002, which was temporarily stalled because the parties did not agree on the superstar midfielder's `image rights' — and the club's gate revenue.

However, they must also realise that Glazer has bought the club because he has an eye on maximising television revenue and that the Manchester United brand is stronger in Asia (40 million fans) than in Europe (23 million). Now, Glazer would want to extend it to the US market as well.

Why are Shareholders United shouting themselves hoarse about Glazer when Chelsea fans are celebrating their club's Premiership success this year after it was bought in 2003 by Russian oil baron Roman Abramovich? Surely, they must be looking forward to Glazer taking their club to a Premiership and Champions League wins in the near future.

United fans maintain that it is erroneous to equate Glazer with Abramovich, who has spent a total of �685m on Chelsea. The �790m, which Glazer would be paying just for an outright purchase, is not his own money — a mere two weeks before Glazer upped his share to 75 per cent, the Manchester United board had refused his second takeover proposal on the grounds that �300m of Glazer was borrowed money.

What this means is that Glazer, who has earned the notoriety of using his Tampa Bay Buccaneers assets to offset his personal debts, could treat Manchester United no differently. Instead of being put back into the transfer market, wages, the youth academy and the redevelopment of Old Trafford stadium, the club's revenues could now be used for financing Glazer's personal debt. This is a frightening prospect considering Glazer's indifference to football as opposed to Abramovich, who watches most of his team's matches and turns up for the World Cups as well.

In 1999, the �680m bid of Rupert Murdoch's BSkyB for Manchester United was approved by the club's board but the fans succeeded in getting the intervention of the Monopolies and Mergers Commission, which stopped the bid saying that it would give BSkyB additional influence over selling of TV rights. But, this time, there are neither competition laws involved, nor a violation of `public interest', and the State could not step in.

Shareholders United now have to turn to the Premier League to make Glazer's life miserable. He has plans to break away from the collective TV rights deal of the Premier League with BSkyB, and negotiate exclusive TV deals for Manchester United's in-house channel thereby increasing substantially to the �35m a year of TV money the Club is now getting from the Premiership alone. (Participation in the Champions League gives the club between �10m and �20m a year as TV money.)

Glazer needs the support of 13 other Premiership clubs for this. The likes of Chelsea and Arsenal are sure to support, and it is the Premiership strugglers and middle-of-table teams, who benefit out of a collective TV deal, which might thwart Glazer.

Ah! The thought of snooty Manchester United supporters actually turning to the likes of West Bromwich Albion for help!