The Glazer Financial Breakdown

As we all now know there is a report expected from the Manchester United Supporters’ Trust detailing the failure of the ‘Glazer business model’. It is a little odd that I have to link to a NOTW article but there is truth in what’s published there and what is expected from MUST.

Of course, the members of the Glazer camp have swiftly moved to dismiss speculation as unfounded:

“The story is inaccurate,” said a spokesman for the Glazer family. “Nothing has changed. “The debts continue to be comfortably serviced by the business, which is performing better than ever.”

So with contrasting reports who do we trust. Let’s look at it a little closely.

Before we dive into all this, let me take the time to quote one of our readers, Paul, who wrote to us about his ticket situation. This is what he had to say (reproduced from his email):

I’ve emailed the club a complaint but unsurprisingly have not had a response. I’m a member and apply for all home games. Those I miss out on, I try and get through Viagogo (Uniteds “official” ticket exchange.) I’ve just managed to find
three tickets and they are £38 each. They now charge a TWENTY FIVE percent booking fee. (agreed by the club). Add
delivetry and VAT means that I can buy (from an official ticket outlet of the club) a face valued £38 ticket for £51 !!!!

3 tickets each at £38 (total of £114) have just cost 153.35. or would have if I could have afforded it

I’m gutted as this is too expensive for me. How can they justify an additional 25%? It’s scandalous and nothing short of legalised ticket-touting there must be something we can do to voice our dismay.

Paul, I am sure, isn’t alone here. This kind of fleecing and milking every penny possible is something that has become true ever since the Glazer takeover. Of course, this is also spreading to other Premiership clubs. But a scan at trends over the past couple of years will tell you that the Glazers seem like the biggest offenders, as far as increasing ticket prices goes.

Paul is bang on when he calls it legalised ticket touting. Unfortunately there is very little one can do about it. Here’s why…

While the MUST’s (and many fans’) complaints in the past had to do with how little we’d spent on players, this year they aren’t too impressed by the transfer spending. Almost all spending in our recent history has got to do with offloading, or getting a substantial amount in return. Trimming the squad and maintaining the wage budget have been at the forefront of any business dealing in the transfer market. All this because of the widely believed theory that the Glazers are too busy allocating funds for servicing debts that they cannot possibly expect to be paying for new players.

But personally, I don’t have anything against the way they’ve backed the management suitably as far as acquiring players is concerned.

But it is the long term situation that worries me. The scale of debt that’s on the shoulders of the club is astronomical. MUST have calculated the debt to be around £100m a year (£79m of annualised interest for this year followed by another £27m for the next). You can read the breakdown over there. The debts have all been transferred on to fans like Paul with the 14% hike.

And the controversial Automatic Cup Ticket scheme makes things more ridiculous, forcing people into buying for future games.

So what can we do? Nothing really. Despite all claims made by MUST and others, Manchester United Football Club remains a privately owned entity. The Glazers do not have any particular obligation to disclose their financial details (as demanded by MUST). Fans are customers, and one of the bad things about a big popular club is if one set of fans are priced out, there are always going to be another set of fans taking their place.

Of course, Stretford End may never be the same again. We had Fergie once remark last year about how the crowd have quietened down a lot of late. All that can only be attributed to the Glazers pricing out the hardcore supporters.

Personally, while I never approved of the takeover when I knew our club was about to be saddled with such debts, I am still torn over having an opinion whether the business model is flawed in the first place. There are two situations here really:

1. The Glazers got into it thinking their model would certainly work but now realize things aren’t quite so good as they planned on. This situation doesn’t make much sense if you take into account that they have been in the Sports business for a while. And the kind of renowned financial advisory firms that were present to oversee the takeover. However, there could be the option that now, with the dollar not doing too well, and with markets generally being a little volatile, things might seem a little tough for the Yanks.

2. The Glazers felt (and still feel) that they can milk every single penny off the biggest sporting brand in the world and then wait till the value of the club reaches a level, so that they can actually sell off the club at a good rate. They would then be able to shrug off the debt, and, hopefully, the new owners would absorb it.

The real situation has to be a combination of both really. If the debt situation is well under control, then they wouldn’t have too much to worry. Of course, we fans would have to face the brunt of that new found confidence in the owners. They will surely raise prices until they reach a critical level where significant people actually drop off and decide to not renew their season tickets. This season saw an unprecedented fall in tickets, and there wasn’t even a wait list.

Selling off the club would probably seem the best option to everyone at present. Yes, we are still hated by much of the country as well as the rest of the world. Lot of rivals must surely be hoping we face the same fate as Leeds. However, with the brand name that is United, there will always be takers for the club and the Dubai and Chinese bids, couple of weeks ago were examples of that.

It’s unfortunate that our club has been reduced to the proverbial golden goose, with neighbours envying the Glazers’ fine catch. One would only hope, for the sake of the fans, that the Yanks don’t kill the goose in their desperation.

Hope. Pray. And Love United.

Fuck Glazer.

What do you think of the whole debt situation?