Manchester United’s managing director David Gill has launched an extraordinary attack on the Glazer family, savaging the American’s business model and predicting ruin for financially over-leveraged clubs. In a passionate defense of United’s management in the PLC-era, Gill points to the significant investment made in Old Trafford and Sir Alex Ferguson’s playing squad.
Gill, managing director since 2001, says that a debt-laden financial structure is not in the best interests of the club. He is on record as calling debt the “road to ruin” for football clubs.
The United chief blasts the Glazers’ business plan as not a “sensible way” to run the club, in a week when Portsmouth face liquidation under the burden of overwhelming debt.
“We’ve seen many examples of debt in football over the years and the difficulties it causes. We know what that means and we think that is inappropriate for this business,” said the United chief, 52, who has been with United since 1997.
“We need to have a sensible structure for the Board to take the club forward. One of the strengths of Manchester United has been its capital structure built up over many years since 1990 when we first floated on the stock market.
“We think that structure is appropriate for football business,” added Gill pertinently.
The Glazer family has loaded United with more than £716 million debt since the summer 2005 takeover, which was fought by the club’s board led by Gill.
In a recent bond issue the family raised more than £500 million to pay down certain preference bank debt. But the bond also enables the family to remove more than £565 million in interest, dividends and management fees from the club by 2017.
United’s fans, led by groups such as the Manchester United Supporters’ Trust (MUST), have fought the Glazer takeover for six years and Gill passionately defends the. MUST now has more than 47,000 members and the group has led the sale of more than 30,000 green and gold protest scarves to the Old Trafford faithful.
“We have very vocal fans and one of the key strengths of Manchester United are those fan groups,” adds Gill.
“That is one of Manchester United’s strengths. I remember clearly back in 1998 when Sky made a bid for us. There was evidence of that in the views of the fans. It is certainly is one of our strengths.”
One of the major strengths of United in the pre-Glazer era, adds Gill, was the club’s financial strength, independence and ability to act quickly when required.
This will not be the case in the future. It is estimated that over the next seven years 79 per cent of every pound spent by United fans will disappear into the black hole of Glazer debts and dividends.
“Our capital structure, for example, meant that we could move quickly on transfer deadline day (August 2004) to acquire Wayne Rooney,” Gill laments, of a time when United’s financial clout brought the world’s best players to the club.
“Throughout the 1990s we have used the operating cash flow of the business to reinvest back in the business.
“Whether that be the physical assets – the training ground or the stadium; or the playing side of it – acquiring players and player contracts.
“That model is probably envied throughout the football world and is appropriate for us going forward.”
Oh wait a minute. That was 2004 and since then Gill’s annual remuneration has climbed 60 per cent to £1.8 million. Now he’s a big fan of United being loaded with £700 million debt.