Has the Glazer family run out of money? It’s a question one prominent Manchester United blogger Andy Green asks as the family’s property business in the United States nose-dives. Despite putting up the ‘not for sale’ signs at Old Trafford, the Glazers are facing up to the realities of deep property recession in their homeland.
The Glazer family’s business empire includes both the property company First Allied Corporation and the Tampa Bay Buccaneers NFL team. Each has suffered in the past year.
Indeed, the Bucs have just completed one of the worst seasons on record, with the franchise $30 million below the salary cap and little business being done on the ‘free-agent’ market during the close season. Bucs fans, no friends of the Glazers during the family’s 15 year ownership, have reached United-esque levels of anger with attendances down more than 10 per cent.
Meanwhile, First Allied, which owns a series of strip malls in the US, has experienced foreclosures and an increasing number of vacancies across its portfolio in the past year, resulting in probable heavy borrowing to sustain the ailing property business, argues Green.
“Given the high void rate experienced by the company and the weak anchors in many centers, cash flow has probably been well below plan for the last two years or more,” argues Green, who is close to the so-called Red Knights group.
“It seems very likely that the Glazers will have had to put capital into First Allied… [which] fits entirely with the family’s management of its other businesses.
“The Buccaneers have been starved of investment on the playing side, at United no attempt has been made to repay any of the PIK debt.”
So short of cash has the family been that in 2009 the Glazers sold off two of their investments: Zapata Corporation for $74 / £46 million and the La Bellucia estate at $24 / £16 million, reports Green,
Meanwhile, in 2008 the Glazers borrowed £10 million from United and last year charged the club nearly £3 million in consultancy fees for the pleasure of having the family on the board.
“Has this money gone to shore up First Allied’s balance sheet?” asks Green pertinently
“What of the loans the family took from United? Are they a reflection of the fact that First Allied no longer has the capacity to pay the family dividends to which no doubt they were accustomed during the property boom years?”
“The Glazers’ other interests suggest the family are overstretched and in retrenchment mode. That doesn’t tally with the assertion that the club is “not for sale”.
“Perhaps someone should make them an offer,” he concludes.
In public at least the Glazers maintain a not for sale stance on the club they acquired for £790 million in 2005. Privately, many recognise that highly geared businesses such as United are always for sale. The only question remains the price.
Significantly the Knights have appointed Nomura’s Guy Dawson to head analysis of a potential summer bid. Dawson joined Nomura in December after he sold his advisory firm Tricorn Partners to the Japanese bank. That he advised the Manchester United board during the Glazers’ takeover in 2005 offers the Knights valuable insight.