Liverpool FC Forum

The Glazer Takeover: The Question And Answers

By Pete Gill

Wondering why there’s all this fuss about the Glazer takeover and what its repercussions could be? Then step this way as Pete Gill guides you through the mayhem…

Why are the fans so opposed to the Glazer takeover?
Essentially, for three reasons.

1) Because it would put the club in the hands of a man who is a businessman first and last. Glazer’s motive is purely financial. The fans will lose what little say they have in the running of the(ir) club.

2) As Glazer seeks to maximise his profit from ManYoo, the club’s transfer kitty for new players is likely to be slashed, while season-ticket prices will increase. The ManYoo board have already announced that the cost of season tickets will rise for next season so in the short-term Glazer is likely to be limited to only increasing the cost of the corporate seats and prawn sandwiches.

3) Because, as the current ManYoo board emphasised as they denounced the American’s “reckless” bid, Glazer is borrowing heavily to finance his takeover. Which means the club is now set to be saddled with debts to the tune of £500m.

Glazer’s bid is believed to have been financed by money he has borrowed using the club’s assets – their commercial deals with Nike and Vodafone and so forth, as well as future revenue from season-tickets and merchandise – as collateral.

To quote Sean Bones, the vice-chairman of Shareholders' United: "We're completely against the debt levels Glazer is proposing, debt levels that will take us down the same path as Leeds United."

Expect to hear the analogy of an unknown foreigner, who has never been seen around these parts before, taking over the local pub with a second mortgage and immediately putting up prices, again and again over weeks to come.

So he's no second Abramovich?
Absolutely not. Chances are that the Chelski fans' song of 'We've got loads of money' to be replaced with a polite enquiry of 'Where's your money gone?' next season when they visit Old Trafford.

For one thing, Roman is much richer: his personal fortune is estimated at £13bn, dwarfing Glazer's £1bn bank balance.

So Abramovich could afford to buy Chelski in one swoop with all his own money. Glazer cannot. Moreover, even if he could, as a businessman seeking profit, he wouldn’t want to do so. For while Abramovich is 'living the dream' with Chelski, Glazer is merely chasing the buck.

Roman attends all the Chelski matches. On the other hand, Glazer has never been to Old Trafford and it's far from certain that he ever will.

And will this affect the players?
To use football parlance, it shouldn’t do if they are professional.

However, the uncertainty surrounding the Glazer takeover may supply Rio Ferdinand with a convenient, and understandable, reason for delaying the signing of his new contract.

So no change on the playing side?
The point to emphasis over and over again is that Glazer has no interest in Manchester United, the football club. His only concern is Manchester United, the business.

Of course, he would prefer the team to be successful, but only because that enhances the club's appeal and in turn their business portfolio. Winning football matches will cease to be the priority of Manchester United.

Apparently he has pledged to give the ManYoo boss, whoever he may be, £100m over the next five years to spend. That boils down to £20m a year. To put that in context, note that Wayne Rooney cost in the region of £28m, and that Wigan are planning to spend in excess of £25m this summer.

With the club’s squad in urgent need of a dramatic overhaul, Glazer's arrival couldn’t be worse timed.

So should the other clubs be celebrating his arrival then?
Hopefully not. At the risk of sounding mawkish, no football fan should celebrate one of the biggest clubs in England being bought by an American tycoon who has no interest in football. Glazer's takeover is the most unhealthy and dramatic step yet in football’s relentless march towards commercialism.

Oh. But will it actually affect the other clubs?
Very much so.

The biggest of many fears around Glazer is that he intends to withdraw ManYoo from the collective agreement for the Premiership’s TV rights. At present, 50% of the £1.1bn deal for 2004-07 is shared throughout the league. But Glazer is expected to try to sell ManYoo’s TV rights separately (as they do in Italy), possibly even making each match pay-per-view worldwide.

Although the collective deal is part of the Premier League constitution, it's thought that if Glazer does push for its removal when the Sky deal expires at the end of next season then the European Commission could support him under the terms of 'free trading'. Think Marc Bosman.

The demise of the collective TV deal wouldn’t harm the likes of Chelski, Arsenal and Liverpool, but, as with the collapse of ITV Digital, it could spell grave financial strife for the clubs lower down the food chain.

And of course make a very unbalanced league even more top-heavy with cash.

That doesn't sound too good.

Indeed not. Nor is Glazer likely to stop there.

TV rights are just one of many of potential revenue streams that Glazer is undoubtedly considering. The spectre of a European League probably also looms large in his sights. As do countless new merchandise stores across the Far East...

How has Glazer gained control of ManYoo?
In many respects, ManYoo are now reaping what they have previously sown.

The absurd aspect of the ManYoo fans' mantra of 'Manchester United Not For Sale' is that, as a plc, this is exactly what they are.

Making the club a plc ultimately gave ManYoo a huge financial advantage over their competitors. But, as with any plc, it also left them vulnerable to potential takeovers.

Specifically, Glazer is now in control because JP McManus and John Magnier have sold their 28.9% stake in the club. And why did they sell? In a word, money. Or should that be 'profit'? The Irish duo have made a gain in the region of £80m to £100m from buying into the club.

At £3 a share, Glazer's offer to their pair was well above the market price. Had they rejected it then the American would have been forced to abandon his plans to take over ManYoo and the share price would have plummeted. Faced with a potential loss of perhaps £50m, rather than a huge profit, they made a decision that any businessman would have taken.

Having originally bought ManYoo shares to make a quick profit, they thus became Old Trafford kingmakers.

And once Glazer bought their shares it was game over.