The Glazers have found great profit to be made at Man Utd.
A rich Asian investor once sent the former Israeli Prime Minister Ehud Olmert on a mission to buy Manchester United. For the many people wanting to take charge of the Old Trafford club, the first hurdle is simply meeting the owners, the Glazer family.
The Glazers don’t get out much, however they are great friends of Israel and the investor suspected they would meet Olmert. So it proved and a meeting was arranged. At their country club in Florida’s Palm Beach, Olmert — a United fan since the Munich air crash of 1958 — told me he handed the family a cheque for about £1 billion.
But the Glazers didn’t want the cheque. They weren’t selling United. “This is the strongest brand name in the sports world,” they told Olmert. They also expected the club to get more valuable. And they were right.
Today, Olmert faces a jail term after being found guilty of bribery and corruption charges by the Jerusalem District Court after a retrial following his acquittal in 2012, but life is sunny for the Glazers. Next month is the 10th anniversary of their purchase of United for £790 million (then $1.47bn) — a record price for a football club — which they funded by loading the club with debt and have since sucked somewhere between £500-700 million out of it, ensuring many of the fans have turned against them with protests a regular occurrence at the Theatre of Dreams.
Yet a new book by the family’s former PR man Tehsin Nayani called “The Glazer Gatekeeper” shows, the Glazers seem to have won.Though football clubs shouldn’t be run for profit — the aim should be winning things, ideally — they are regrettably the future of soccer.
Nayani, a Liverpool fan from Britain, worked for six years as spokesman for the family that never speaks. But it isn’t a tell-all book: PR plays its part and Nayani paints the Glazers and all United employees as great guys, however, having got closer to the family than almost anyone else — which isn’t saying much — he clarifies their attitude to United.
Nayani convincingly depicts the Glazers as a sane, shrewd and unassuming lot. He calls them “middle-class billionaires” who “would not have looked out of place at a chartered accountants’ convention.” Abuse from fans and media scarcely perturbs them. Whenever Nayani suggests responding to an attack, Joel Glazer, United’s co-chairman, calmly dissuades him. This close-knit family doesn’t care much about the world’s opinion. What interests the Glazers is making money.
In 2005, that was a new thing in European football. Most British clubs then were loss-making operations run by vain local businessmen — like Newcastle under chairman Freddie Shepherd. The Glazers were clearly profit-seekers. That prompted wild speculation about what they might do: change United’s crest, sell the naming rights to Old Trafford, sack Sir Alex Ferguson and the club’s icon-turned-director Sir Bobby Charlton and generally trample on United’s tradition like brutish American capitalists.
In fact, as Nayani shows, the Glazers were much smarter than that. They didn’t want to change United. They had bought it precisely because it was well-managed and consistently profitable: in the 30 years before being taken over by the Glazer family in 2005, Man United generated a total of more than £250 million (about $400 million) in pre-tax profits while also winning eight league titles. They had targeted the best business in a horrible industry.
When the Glazer brothers first visited Old Trafford in the summer of 2005, United’s office employees gathered to hear Joel speak. He told them the Glazers would be conservative owners who respected United’s traditions. That proved mostly true. Far from sacking Ferguson, the Glazers always paid him respect. They would visit him and the players after matches in the changing-room, on Ferguson’s turf, never summoning him to see them. Far from sacking Charlton, Joel told Nayani: “Sir Bobby’s got a job for life at the club… He is Manchester United.” No wonder Ferguson and Charlton became the Glazers’ best ambassadors, defending them against angry fans.
Man Utd fans have railed against the owners ever since they took charge.
The Glazers are often accused by the media and fans of not understanding United’s soul. In fact they understand it perfectly. They just see it as something to monetize.
Nayani emphasizes all the prizes United have won under the Glazers — five league titles, three League Cups and a Champions League, among others — but the club would probably have won many more without them. Imagine the stars United could have bought this past decade with the £500-700 million that the Glazers took out in interest, bank charges and the “management fees” they paid themselves. As the Manchester United Supporters’ Trust said: “If it were a race, then United are dragging their owners behind them like a tractor, while Manchester City’s owners are providing rocket fuel.”
Still, the Glazers have their good points. Firstly, they aren’t vain. After Liverpool lost the Champions League final to AC Milan in Athens in 2007, the club’s ill-fated American owner George Gillett led the players to the podium to receive their medals. As Nayani says, you can’t see Joel Glazer doing that. And whereas Chelsea owner Roman Abramovich foisted unwanted signings like Andriy Shevchenko and Fernando Torres on a wide variety of managers, the Glazers let Ferguson and his successors decide.
Secondly, though the Glazers have steadily raised ticket prices, they haven’t been greedier than other English clubs. The cheapest season ticket at Old Trafford this year costs £532 ($780), only the ninth highest in the Premier League, according to Sporting Intelligence. United’s most expensive is £950 ($1400), almost exactly the same price as at QPR and less than half that of Arsenal. Given that Old Trafford is almost always sold out, the Glazers could charge spectators more.
They don’t, because they don’t need to. Before anyone else, they saw United’s big growth opportunity across the world. United have hundreds of millions of foreign fans, many of whom will never see Old Trafford. The best way to make money out of these people is through global sponsorship deals. In sponsorship — the one bit of the club the Glazers wanted to control — they have blazed the path with over 35 separate deals.
While many other clubs wait for sponsors to approach them, United approach potential sponsors themselves. When the club needed a new shirt sponsor, the commercial people prepared mock shirts, each adorned with a different company’s name, packed them in expensive black boxes and sent them to executives at each company. Nayani sums up the message: “No need to imagine what it would be like for Rooney to wear your company’s shirt — we’ve already done it for you.”
The insurance company Aon became United’s shirt sponsor after “a sample shirt had landed unsolicited on the desk of Aon’s new marketing head, Phil Clement.” But shirt sponsorship is just one of countless ways that the world’s companies can pay United. Want to be the club’s Saudi mobile-phone partner or global official car partner? The Glazers have a slot for you. Wonder how Mister Potato can get in on the action. Wonder no more.
Their efforts, plus soccer’s globalization, grew United’s business. The Glazers inherited a club with revenues of €246.4m ($280m) for the 2004-05 season, second in Europe behind Real Madrid, according to the business advisory firm Deloitte. By last season, though still behind Real, United’s revenues had more than doubled to €518m ($550m).
Meanwhile the debt the Glazers piled on to United has almost halved, from a peak of £717m ($1.1bn) in 2009 to £380.5m ($560m) last season. Given the higher revenues, that’s a manageable load, especially as interest costs have dropped. Journalists have spent 10 years screaming that United would go bust, or that the Glazers would, or even that soccer would. Today that kind of panic looks silly.
Now the FFP has come in, United’s commercial deals are starting to bring big money.
Now financial fair play (FFP) is helping the Glazers. United’s 4-2 victory over Manchester City on Sunday was partly due to FFP: UEFA’s new rules stop City’s owners from spending what they want on better players. That in turn helps United keep its own wage and transfer costs down.
The £790m that the Glazers paid for United now looks a bargain. This morning the club’s market value on the New York Stock Exchange was £1.78bn ($2.63bn). Moreover, though the Glazers will never be liked, they are now mostly ignored. Google searches for “Glazer Manchester United” peaked in 2005 and in the last five years have never again reached the level they hit in 2010 when a group of rich fans known as the “Red Knights” were trying to buy United.
Anyway, those Google searches were overwhelmingly made in Britain, followed at great distance by the U.S. Most United supporters elsewhere — like the Korean fans Nayani describes as desperately trying to trap themselves with players in hotel elevators during a preseason tour — just don’t seem to care who owns the club.
Silently, the Glazers have won. Nayani ends the book with his own sacking: this family simply doesn’t need a spokesman.
And the Glazers are the future. For the first time ever, English soccer is becoming a profitable business. Premier League clubs reported combined record pre-tax profits for last season of £190m ($280m), their first combined profit in 15 years, says Deloitte. Other American businessmen — such as Randy Lerner at Aston Villa, Stan Kroenke at Arsenal and Ellis Short at Sunderland — have been buying clubs, seeking the profits the Glazers found.
This is regrettable. Football clubs shouldn’t be run for profit. Companies exist to make their shareholders rich. By contrast, most of a club’s customers (its fans) and employees (its players and coaches) would say that the club exists purely to play well and win things. Profit-seeking business people can’t buy the British Museum, and they shouldn’t be allowed to buy Manchester United. However, football’s rules permitted it, and the Glazers were smart enough to see profit where others didn’t.
Simon Kuper is a contributor to ESPN FC and co-author, with Stefan Szymanski, of Soccernomics.