Unfortunately, the coaching question is so insignificant as long as the Glazers continue to cause mischief. Despite all this, I’m excited to see who will take on this position next.
I completely agree with you. The question is, if you see yourself as businessmen, you should notice that the value has fallen. So it’s better to sell before it goes any deeper😬. Such a shame for such a club.
The big problem is that the Glazers transferred the liabilities to the club after the purchase. So to put it simply: United itself is heavily indebted due to the purchase and the sales only pay off the interest and the Glazers have the rest paid out.
A sale is therefore unthinkable because no sensible economist would invest here. The greatest probability is simply that the Glazers will only leave when the club is completely drained, then there will no longer be any value in return.
That’s exciting. So the Glazers took on debt to buy the club and then simply transferred it to the club? How does something like that work?
Correctly.
In 2005, the Glazers bought Manchester United not primarily with equity, but largely with debt (bank loans, hedge fund loans).
Significant:
• The loans were used to purchase the shares
• Initially, the debt was formally held by the Glazers or their holding companies
After gaining control of United, the Glazers carried out a corporate restructuring:
• Manchester United was delisted (delisting)
• New holding structures were created
• The loans were transferred to the operating company Manchester United plc
Result: The club itself became the debtor, no longer the Glazers.
The debts were secured by:
• Stadium (Old Trafford)
• future income (TV money, sponsorship)
• Trademark rights
That means:
• United is liable for its entire business model
• Repayment and interest are paid from current club revenues
Some of the debt was later converted into high-interest bonds:
• Interest rates sometimes over 14%
• Very profitable for lenders
• High annual interest burden for the club
Since the takeover, over £1 billion has been spent on:
• Interest charges
• Debt service
• Fees
paid from club funds
Why was this legally possible?
• In England (and the USA) LBOs are legally permitted
• There were no protection mechanisms under sports law
• The FA / Premier League did not intervene
Morally criticized, legally clean.
Briefly summarized
The Glazers:
1. bought United with loans
2. took control
3. shifted the debt to the club
4. let United pay interest and repayments themselves