Manchester United in one of the biggest club in the world at the moment and a huge part of their global fanbase is down to the success they achieved when their legendary manager Sir Alex Ferguson was in charge.
The Scot stepped down from his post in May 2013 after guiding the Red Devils to their record 20th league title. Since the start of the millennium, the club has seen several changes off the field.
United went public and they floated into the stock market in 1991. Several high profile businessmen were looking to buy the club. The list includes the likes of property trader Michael Knighton and Rupert Murdoch’s BSkyB corporation. However, they were denied the opportunity to take over the Old Trafford club.
One man decided to take over the club and he started to do it in stages. That man is Malcolm Glazer and his family. The Glazers announced his stake in September 26 2003 as he acquired 3.17% of United’s stake through a holding company called Red Football on , which increased to 15% by the end of that year.
Glazers take full control of Manchester United
This was almost doubled after the Glazers decided to acquire the shares of Irish business magnate John Magnier and another Irish businessman and racehorse owner JP McManus further strengthened his position as a major stake holder with 57% share of the famous club in May 2005.
This happened cause United’s then major shareholders Magnier and McManus were not in favour for Ferguson to continue at Old Trafford. The remaining shareholders were looking for investors, who could buy the share of the Irish duo in order to keep the legendary manager at the club. This is when the Glazers came into the scene and started improving his percentage of share at United.
It was just a matter of days when the percentage of shares shot up to 75% and once this was achieved, the Glazerz decided to delist the company from the stock exchanges for the first time in 14 years in June 2005.
This allowed him to add few more percentage of shares to his name as his stake went up to 98% through their parent company Red Football, which cost them £790 million in 2005.
This is when Malcolm Glazer and his family, stamped their authority at the most decorated football club in England.
The takeover of the club did not go well the section of the supporters and they decided to form another club named FC United of Manchester in 2005, who have a nickname called Red Rebels.
Currently they are playing in the sixth division of English football. As they were formed in 2005, United on the other hand started to gain popularity as they went on to regain their dominance in English football, which was short held up Arsenal (for a year) and Chelsea (for two years).
Success on and off the pitch
The success on the pitch was emulated of the pitch as well as they signed a short sponsorship deal with AIG, who reportedly played a role in helping the Glazers take over United. This, coupled with improved TV deals and ticketing price allowed the new owners to take full control at Old Trafford.
In 2006, Malcolm’s two other sons, Kevin Glazer and Edward Glazer, along with daughter Darcie Glazer was included into the board of directors as non-executive directors. United for most part of the last century were a debt free club.
What annoyed or caused unhappiness amongst the fans was the club went into to debt after the Glazers took over. The funds they raise to take over United was split between their family and the club.
Citadel, Och-Ziff Capital Management and Perry Capital were the three hedge funds from New York, who funded the Glazers to take over the English club and the total amount came up to £660 million, which was subjected to interest of £62 million-a-year.
£500m bond issue launch in 2010
In 2010, the Glazers’ debt (read it as United’s debt) had increased to over £700 million, which forced the club to come up with a strategy to reduce the debt. It was time for refinancing and that is when a £500 million bond issue was launched to reduce the interest as they were looking at the financial restructure of the club, which included a potential asale and lease-back of United’s Carrington training complex.
The situation forced their debt to further rise as it went to a highest £778m in 2010. In 2012, an application was made to sell club’s £64 million worth shares on New York Stock Exchange.
The further details released suggests the Glazers were willing to sell 10% of their shares, raising up to £210 million. This was initially intended to clear the club’s deb. However, it was not done as much of the money went into the pocket of the Glazers family rather than reducing the club’s debt.
However, things have started to become better over the years and the record sponsorship deals which includes the likes of £750 million deal with adidas for 10 years starting from this season and Chevrolet as shirt sponsor will only help them reduce the debt.
As of last year, the debt was just above £380 million and one will hope it only reduces as time goes on. A hope for a United fan to see his club debt free off the field and start winning silverwares on the field, starting from this season.