A billionaire is hardly ever mistaken for an innocent abroad but you have to wonder if Malcolm Glazer understands just what he is getting into.
The septuagenarian seems set to attempt a takeover of Manchester United. He must be one of the few men left who believe there are riches to be had in British football. It might look as if a fortune awaits, but others who mounted a raid discovered that the vault was booby-trapped.
The pioneer was Irving Scholar, who took the revolutionary step of floating Spurs on the Stock Exchange in 1983. Though his intentions can still spark argument, there is no doubting the financial troubles that ensued when the club diversified beyond its area of competence by moving, for example, into sportswear and ticketing businesses.
In the decades since many supporters have learned far more than they ever wished to know about company law, becoming woebegone experts in administration and bankruptcy.
The magnates who continue to be involved in the sport fall into two categories. The first, and largest of them, includes the likes of Mohamed al Fayed, at Fulham, who have lately developed a keen interest in economising. The other group is made up of those who just don’t care what the price is, and it occasionally looks as if Roman Abramovich is the only name on the membership list.
Glazer, JP McManus and John Magnier are, of course, correct in thinking that Manchester United are the exception in what is whimsically called the football industry. They have shown the commercial acumen to make the most of a worldwide following. So effective has the club been that it has been able to keep on buying players while also paying dividends.
The acquisition of United, however, could make sense to Glazer only if it leapt to undreamt of peaks of profitability. Magnier and McManus seem merely to have been waiting for someone like the American to bid for their holding. There has never been any indication that either of them wished to run Old Trafford’s day-to-day operation themselves.
Glazer prospered mightily after snapping up the Tampa Bay Buccaneers, but the risks involved in adding United to the portfolio are intimidating. His 19,3% stake cost him £140-million and the entire club is valued at more than £800-million. For Glazer to recoup his outlay and enjoy the sort of return that would justify the venture, United would have to be forced into radical changes that must antagonise supporters.
Glazer could transform the situation in seasons ahead only by slashing costs and boosting revenue. Such a policy would run contrary to the interests of Sir Alex Ferguson, who has to compete for players, as well as those of fans who currently enjoy reasonable ticket prices at Old Trafford.
The latter group may be spectators at weekends but they will not be on the sidelines if Glazer continues with his approach. This club has intelligent and savvy followers who know how to fight unwanted entrepreneurs. Shareholders United arose in the successful campaign to fend off Rupert Murdoch’s 1998 bid. His move was blocked by the government, which feared that BSkyB would otherwise be ensured an unhealthy dominance in the television market.
There is no such barrier for Glazer to surmount, but there will be suffering ahead for him if hostility hardens in the north-west. Match-day revenue at the 67 000-seat Old Trafford continues to be crucial to United and any boycott would have a savage effect. These spectators prize their share certificates, but few mistake an emotional investment for a monetary asset.
The plc status of many football clubs is the aftermath of a misadventure. There is no logic to the model when customers (fans) are opposed to profit unless the bulk of it is plunged back into improving the ground or, above all, the team.
Glazer would have to convince supporters that his scheme is good for the club and he will surely fail to do so. He will be ensuring a brutal struggle between commerce and people’s emotional investment in the game. Should fans get their way, United will be seen primarily as a football club that just happens to be pretty good at business as well. —