THE GLAZER family have applied to list Manchester United on the US stock market in a bid to pay off some of the club’s £423m debt.
The American owners also signaled their intention to move United’s registration to the tax haven of the Cayman Islands so they can realise cash from investors, while retaining control of the club.
“Not even the Glazers are willing to pretend they aren’t harming Manchester United anymore.”
The Glazers borrowed £525m to buy United in 2005 – making the club responsible for servicing their own debts – and the takeover has cost the club more than £500m in interest, bank charges and fees to date, with a further £423m remaining unpaid.
The US Stock Exchange registration statement outlines the principal intention is to sell enough shares to pay off an as yet unspecified amount of the club’s debt, whilst reorganising the ownership of Manchester United Ltd, via the Cayman Islands, to remain owned by the “linear descendants” – the five sons and one daughter – of Malcolm Glazer.
Shares will be split into two classes, A and B. Investors on the New York Stock Exchange will be able to purchase category A shares, whilst the Glazer family will retain all of the category B shares – which carry 10 times the voting rights of the A shares. Not only will investors have diluted voting rights, but there is no intention to even pay them a regular dividend.
It is unknown how many category A shares will be made available, nor the price at which they will be sold, and therefore impossible to calculate the total sum by which the family is hoping to reduce United’s enormous debt.
Malcolm Glazer, Manchester United's controversial owner
However, this is not the first time the Glazers have explored this option of debt reduction.
In September, United received approval to float on the Singapore stock exchange, but pulled out because of volatility in the stock markets.
What this latest application document explains though, is the debt could affect United’s ability to compete for players – something that representatives at United, including Sir Alex Ferguson and, in particular, chief executive David Gill, have always denied.
What this application really signals then is the Glazers admission that, despite its huge global fan base and promotional and marketing efforts, Manchester United is being weighed down by heavy debts.
Last season United were pipped to the title by big-spending rivals City, and knocked out of the European Champions League in the group stage.
It appears the American ownership has finally given up the pretense of saying that the debt has had no detrimental effect on what happens on the pitch.
As City fans sing, when you’ve signed Phil Jones and they’ve signed Kun Aguero, maybe it’s finally time for United fans to face the music.
You can follow David on Twitter @DavidPMcCourt
