How Did Glazers Acquire Manchester?
The story of Malcom Glazer taking ownership of Manchester United is one that is rinsed with controversy and the U.S. sports tycoon fought tooth and nail in order to acquire the club back in 2003. In September of that year, Glazer had a share hold of 3.17%. However, by the end of the year, this was increased to around 15%, and this was later almost doubled by October 2004. As of May 2005, Glazer owned around 57%, and a few days later he took control of 75% of the club's shares which allowed him to go through the process of delisting it from the stock exchange.
After this, the Glazers owned 98% of the club within just a month, and finally squeezed out the remaining 2%, with a final purchase price of almost £800 million. However, a lot of people were relatively confused as to how the Glazers acquired Manchester United in the first place. Malcom Glazer is a private man, and while he has a net worth of $4.4 billion, he still continues to live the life of an "ordinary" man. Here we're taking a look at how exactly the Glazer's took over the club.
The majority of the capital that was used by the Glazers in order to purchase Manchester United, actually came in the form of loans. While the likes of short term loans like Wizzcash payday loans, for example, were not one of the main forms (due to their unsecured nature), a number of loans were taken out and secured against the club's assets. This resulted in interest payments alone of over £60 million a year.
On top of this, there were a number of payment in kind loans (PIKs) which were sold as hedge funds later on. While the interest was sitting at over 14% a year, the Glazers didn't actually pay back any of the PIKs in the first five years. Manchester United were actually a debt free club until 2005 when the Glazers took over. In June 2010, the debt peaked at £777.9m and this had an adverse effect on the fans.
The Glazers appeared to not be put off by any of the financial difficulties that they were facing, probably because it was all due to the majority of loans being secured against club assets. After the takeover was complete, fans saw a huge increase in season ticket price. For example, the East Stand Upper Tier increased by almost 30% -- rising from £494 to £665 between 2006 and 2009. As of 2017, the cost of a season ticket for the East Stand Upper Tier is £703.
The Green & Gold Scarves
Supporter anxiety was at an all-time high in January 2010, after a £500m bond issue was launched. This led to a protest in the form of green and gold scarves, which represented the colors that United had first worn when they were founded in 1878 as Newton Heath. The fans continued to protest, but the Glazers instead focussed away from the fans and turned to building up Manchester United's commercial side.
The Glazers spent a lot of time building the commercial platform for Manchester United, and dealt with Vodaphone, AIG, Chevrolet and then Adidas which commenced a £750m 10-year deal. While the players weren't always happy about the increase of the commercial side of things, commercial exceeded the club's entire turnover.