Even the stock exchange flotation has turned out to be just another way for the Glazers to milk Man Utd for all they’re worth.
So why does Ferguson continue to be outspoken in his support?
Finances Explained
The Glazers financed their £800 million purchase of the club primarily by securing loans against the club’s assets. In effect, the owners were only able to afford to buy United by taking a loan, and loading it onto the club itself (a bizarre concept that the Premier League let stand; doesn’t that mean any one of us could do the same thing? I’ve always fancied owning Real Madrid). The £660 million loan incurred £62 million annual repayments, which come straight out of United’s coffers. The fury amongst supporters is pretty understandable, considering this repayment is being made on a loan taken against their own worth; a debt free, super-rich football club was instantly transformed into a club with crippling debt, simply so that the Glazer’s could find money for their initial purchase. In 2010, the debt was refinanced via a bond issue (essentially an I.O.U contract, and a different type of loan) worth approximately £500 million. Essentially, this meant the club had raised £500 million out of nowhere, which they used to pay off almost all of their debt to international banks (as far as I can work out, this means they took out a second, different loan, and used it to pay off the first one, thus giving them a new debt with different terms and conditions). The annual interest on the bond is £45 million per year, reducing the overall interest payments United are liable for. Crucially, this bond issue allowed the Glazers to start stripping the clubs assets, and using the club’s income to repay their own loan, and help repay the PIK loans they so desperately need to wipe out. The debt restructuring now allowed them to: carve out £95 million from the club’s finances; sell and lease back the training ground; take 50% of the club’s profit each year, and use it pay off the debts.That’s right – if they need to, the Glazers can take half of United’s yearly earnings, and use it to pay off their debts. United have now floated the club on the New York stock exchange, hoping to sell 10% of the club and raise around £244 million. Although initially promised to be used to pay off some of the debt, it has now emerged that the large majority of this money will simply be gobbled up by the Glazers. Senior employees stand to gain around £204 million from a share scheme. The Guardian claim that around £96 million is to be used to pay off debts – a measly amount. Finally, the Glazers have made moves to prevent any takeover attempts by consolidating their position by quietly altering the club’s constitution. Michael Moritz described it as “the equivalent of armed robbers leaving the scene of a crime and throwing nails on the road to stop pursuers”.
Ferguson Support
How is it that Alex Ferguson still finds time to praise the Glazers, who continually suck money out of the club via annual repayments, take money directly from the club’s profits, and contradict their claims of clearing the club’s debt? It would take a brave person to claim the Glazers aren’t milking United for all they’re worth. And that man, seemingly, is Ferguson. Many have claimed the Glazers’ leeching has affected United’s spending power, despite Ferguson insisting money has been made available to him. It seems to be that Ferguson really has spent little money out of personal choice. If that is the case, then perhaps it isn’t that surprising he has a good relationship with the owners. In a statement released earlier this week, Ferguson denied he was gaining financially from the owner’s controversial policies, and instead praised their managerial approach. “The Glazer family have let me get on with my job, there is no interference or obstruction, only support”. His praise for the Glazers must be because they let him do what he wants, and spend what he wants. As a manager, that is ideal. As an ambassador of the club, it is disheartening. He has rejected and dismissed the fans’ concerns, and is beginning to tarnish some of his legacy. Just because their ownership is beneficial to him, doesn’t mean that he should be happy seeing the club get stripped of its assets. His lack of concern for the financial welfare of the club is worrying. It is particularly disappointing because he is arguably the only person that could stand up to them. Untouchable and uncontactable, the Glazers’ low profile and immense power has made all of the fans’ attempts at overthrowing them futile. If Ferguson made a stand, people would have to listen. He is the only person involved with Manchester United that is as untouchable as the owners. Turning the other cheek and ignoring the problem is not beneficial to United, even if Ferguson believes it is beneficial to his current team. His continuing support is disappointing.
