It’s a pertinent question after a week when supporters’ protests against the incumbent Glazer family reach a new zenith during Manchester United’s win over AC Milan on Wednesday night. With two giant anti-Glazer banners hanging from the second tier and a sea of green and gold there’s no doubt fans want change. The question is: what kind?
The Glazer family’s over-leveraged, debt-fueled business model is designed solely for their financial benefit, with the recent bond issue in place to ensure that the owners can remove even more money from club coffers over the next seven years. Such is clear despite managing director David Gill’s laughable assertion on Thursday that the Americans have been good for the club.
In the Manchester United Supporters’ Trust (MUST) and the so-called Red Knights there is hope that not only will United be in a stronger financial position but fans will get a real say in the future of the club. If the organisations can mount a bid that is. MUST, committed to fan-ownership, will likely call on supporters to contribute financially to any future bid.
Over the course of United’s history the club has morphed from Newton Heath Lancashire and Yorkshire Railway F.C, the workers’ union which formed the club in 1878, to a privately held business, through public flotation in 1990, to the current model.
So what models are there in football and what could happen at United?
The Abu Dhabi Royal Family’s ownership of Manchester City has brought a new model to the football community where the almost limitless wealth of a sovereign nation is ploughed into the club. In addition to buying the club, paying off debt and investing hundreds of millions in player acquisition, City’s owners last week confirmed a £1 billion scheme to redevelop the area surrounding Eastlands.
Unless a mystery Middle East based billionaire family steps forward with an offer too good to refuse then this is a very unlikely scenario at Old Trafford
Russian oligarch Roman Abramovich changed the face of English football when he bought Chelsea in June 2003. The London club, which lived well beyond its means under Ken Bates’ stewardship, was withing days of going bust according to some reports. Abramovich’s passion may have cooled but the Russian has still lavished around £400 million on the loss-making club to date.
Other single-owner models are commonplace in football, if not always the chairman’s fantasyleague-style plaything. Aston Villa’s Randy Learner and Sunderland’s Ellis Short are single shareholder chairmen in the Premier League.
Historically, the local businessman-turned-chairman was a common model in football. Indeed, United remained independently owned for more than 100 years before floatation with Martin Edwards the last in a line of local chairmen.
Public Limited Company
When United floated on the London Stock Exchange in 1990 the club followed Tottenham Hotspur as only the second club to do so in England. The Initial Public Offering (IPO) raised around £12 million, geared towards developing the Stretford End, although the board regularly paid shareholders dividends each season through the 14 year period as a PLC.
The spectre of IPO remains though with one possible exit strategy for the Glazer family a re-floatation of the club when the bond issue matures in 2017.
Much is made of Barcelona’s democratic system, where each of the 160,000 members vote in elections to appoint a president and board of directors who in turn run the club on the fans’ behalf. For many United supporters that is the ideal scenario, if financially unrealistic given the immense level of debt on the club’s books.
A similar model exists at Real Madrid, while in Germany legislation ensures that fans own at least 51 per cent of all clubs. The model ensures that boards run clubs not only with supporters’ interests at heart but that fans have a genuine democratic say in their club’s direction.
However, at Madrid and Barcelona an arms-race develops during election periods, with candidates promising lavish signings to garner more member votes. The result is that the Spanish giants has each run up debts of hundreds of millions of Euros.
An even more extreme version of the democratic model is in place at Ebbsfleet United, bought by the website myfootballclub.co.uk last year. Members of the club now vote on a variety of issues, including player transfers.
More realistically perhaps, the Red Knights have promised that a ‘blocking stake’ of 25.1 per cent of shares will be held by fans as a minimum should the group stage a successful coup at the club. The shareholding is crucial to blocking any future flotation or sale of the club.