400 million reasons why you should have spoken out, Sir Alex
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UPDATED:
00:20 GMT, 8 July 2012
Once upon a time, Manchester United’s
balance sheet told a happy tale. An ambitious club, they pursued the
game’s great prizes, paid the largest fees for the finest players and
generally enjoyed a level of prosperity that others could only envy. Yet
they did not owe a single penny.
Then, in the summer of 2005, the
Glazer family of Palm Beach, Florida, acquired this admirable enterprise
by means of a leveraged buy-out. The process was totally legal and, to a
lay person, utterly mystifying. It involved borrowing some 525 million
to complete the purchase, then promptly dumping that sum on the club’s
hitherto pristine books. In seven years, the ingenious family spent
about 500m of the club’s income on servicing that debt, with its
enormous interest charges and professional fees.
Last week, we learned that United are
to be floated on the New York Stock Exchange, via the tax haven of the
Cayman Islands. This is not an unusual way of raising finance but here
it is being done as a faintly desperate means of reducing the Glazers’
debt without diminishing the family’s control. Some thought it an
incongruous operation; the most renowned institution in the domestic
game being treated as if it were a dice to be rolled or a card to be
dealt. But the people who administer English football took the whole
affair in their comfortable stride.
Flotation: Bryan and Avram Glazer, sons of Michael, pictured on a rare visit to Old Trafford
It needs something seismic to shake
the smugness of the Premier League. At the time of the United takeover,
the league’s chief executive Richard Scudamore dismissed the concerns
about debt: ‘The most important thing for us when we met with the
Glazers was to talk about their aspirations regarding television rights
and collective rights generally,’ he declared. And he sounded less
reassuring than he intended.
Five years later, when United’s debts
had passed 700m, he remained unruffled: ‘Manchester United have
continued to be one of the top clubs and since the Glazers have owned it
have continued to deliver huge success,’ he said. ‘It is absolutely one
of the best-run clubs in the world.’
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Now whenever Scudamore is challenged
about the way in which the various clubs of his league are run, he
usually insists that he is ‘ownership neutral’. It is a formula which
allows his organisation to shrug aside the antics of such as Thaksin
Shinawatra at Manchester City, as well as some of the rascals who have
helped destroy poor Portsmouth. And so long as he can carry on
delivering 3billion television deals, the various owners will not
worry. This is, after all, the ‘Barclays’ Premier League, a
serendipitous title which reminds us that a sensitive conscience can be
an expensive luxury.
But if Scudamore and his chums have
been predictably indifferent to the situation at United, the silence of
the Football Association is far more concerning. The most renowned club
in English football are in debt to the tune of 423.3m. Even the Glazers
admit that: ‘Our indebtedness could adversely affect our financial
health and competitive position.’ Yet the FA, the custodians of the
national game, have nothing to say on the matter.
But there are two other figures whose
silence is both perplexing and regrettable. David Gill, the accomplished
chief executive, was part of the United board who opposed the Glazer
takeover. In the ensuing years, he has defended the owners at every
turn, insisting that the soaring debt has not damaged the club’s ability
to invest in the team.
Then there is Sir Alex Ferguson. Since
2005, he has delivered his employers four League titles and a Champions
League. In addition, he has declined to complain about player
investment and described the Glazers as ‘excellent owners’.
Surprisingly silent: Both Sir Alex Ferguson and David Gill have backed the Glazers since their takeover
Yet he, more than anybody, was responsible for that original, unblemished balance sheet. It was his work which had made the club such an inviting financial target. But now he is required to run harder than at any time in his career, simply to stay level. While the famously noisy neighbours make merry with Abu Dhabi’s endless largesse, Ferguson must try to flourish on more slender resources.
He has never complained, since that would be construed as weakness, but ideally he would not have chosen to go against City with Paul Scholes (37) and Ryan Giggs (38) in his engine room. Both have been extraordinary players but the fact that United should have come so close to success with such a venerable cast represented a minor miracle of management.
With City’s ruling family expected to invest still more lavishly in their project — leverage is not a term they recognise at the Etihad — Ferguson’s task becomes painfully daunting. He will give it his best shot, since that is his nature, but deep down he must know that the die was cast on the day when Family Glazer arrived at Old Trafford, bearing promises of a brave new world and around half a billion pounds of debt.
He was the one person who might have altered events. Had he publicised his protests and articulated his opposition, public anger might have been aroused and a more suitable purchaser might have emerged. But he said nothing and now the club who have consumed his energies and talents have become the Cayman Islands-registered Manchester United Ltd. Just another ‘brand’, another commodity, another hopeful gamble on the New York Stock Exchange.
Why I wish AVB well
The last time I saw Andre Villas-Boas, he was about to be sacked. It was March and Chelsea had just lost at West Bromwich Albion. He had concluded, correctly, that several of his players were way past their peak and that drastic surgery was required.
For their part, the old lags recognised their continued employment depended on the manager’s departure. So they got rid of him.
The process was curiously repugnant: they shrugged, pouted and went through the motions, apparently indifferent to the outcome. They made it clear that they would not play for the manager.
An honourable man: Andre Villas-Boas
Just a few weeks later, they would mass their defences and ride some outrageous luck to win the Champions League. But by then, AVB would be gone.
He left with great elegance, refusing to blame those who had let him down, and we sensed he still had much to offer. He now has his chance at Tottenham. I hope he takes it.
No room for cheats
Deluded: Stewart Regan
At the risk of intruding upon private grief, it would seem that demotion to the Scottish Third Division is the very least of the penalties which Rangers should expect for their sustained exercise in financial doping. However, Stewart Regan, the chief executive of the Scottish FA, is trenchantly opposed to such a punishment.
He pleads for the softer option of relegation to the Scottish First Division, apparently on the grounds that Rangers are too big to fail. Indeed, he has issued preposterous warnings of ‘Armageddon’ and ‘social unrest’ if the club should get what they truly deserve. Rangers in the Third Division, warns Mr Regan, would ‘kill the game’ in Scotland.
I suspect he is mistaken, for civilised sanctions will not kill the Scottish game. That task can safely be left to systematic cheats like Rangers. And deluded prattlers like Stewart Regan.
PS
Liz Nicholl is chief executive of UK Sport. This is the excellent body who have invested vast amounts of Lottery and exchequer funding into Olympic sport. Unfortunately, they have a bizarre obsession with bogus targets.
After staging ‘close consultations’, they bravely forecast that GB would win between 40-70 medals. Ms Nicholl has now announced the ‘official’ medal target. ‘Our commitment is to 48,’ she declares.
The figure is as meaningless as the process which produced it. Next time, she should choose the scientific option. And ask a bloke down the pub.
