Wednesday, March 03, 2010

Bond issue behind the fans’ revolt

Source: City A.M.

Wednesday, 3rd March 2010

WHEN the Glazer family took over Manchester United in 2005 it was made clear to them that they were unwanted owners, given they had financed the takeover with expensive debt that would inevitably have to be serviced at high cost.

Fans demonstrated against their purchase and some even set up their own club, FC United, in protest. But, owing to a mixture of success on the field and a lack of alternative purchasers off it, the Glazers have managed to cling on to control without ever being embraced by the majority of the United support.

A few weeks ago, though, the Glazers’ popularity fell to a crushingly new low. Indeed United supporters, the customers of the Glazers’ product, are revolting.

They have in their thousands reclaimed the green and gold colours of Newton Heath, the club that United was formed from, and in the City they have found wealthy backers who are working furiously on alternative ownership plans.

The thing that changed everything was a recent £500m bond issue the Glazers hoped would sort their financing difficulties.

The 322-page prospectus that was issued in order to encourage take-up of the bond revealed that the Glazers could potentially take almost £130m cash out of the club next year alone.

That figure is in addition to the payment of interest on the £504m bond of around £45m. Football fans are a conservative lot but they can normally be won round to new owners by the promise of a fresh injection of cash for new players. It did not take long, for example, for Chelsea fans to warm to Roman Abramovich, once the cheque book for mega-signings came out.

But the Glazers face the charge of taking money out of United, not putting it in.

Now fans are being urged not to renew their season tickets. Keith Harris, the Seymour Pierce chairman and die-hard United fan who is co-ordinating the potential City takeover, reckons that 15,000 fans might be persuaded to vote with their feet and turn down the chance to attend matches at Old Trafford next season, costing the Glazer family around £12m. That is a big ask for football fans who need their matchday almost as much as a drinker needs his next pint.

But there is a sense the tide is turning inexorably against the Glazers. Manchester United is now officially in play and if Harris and his chums fail to come up with the £1.2bn or so to fund a bid there is every reason that somebody else might want to have a shot at owning the best-known football club in the world.