The struggle makes Money Week
Malcolm Glazer: money-making machine who saddled Man U with a £700m debt Mar 12, 2010
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By all accounts, Malcolm Glazer has a thick skin. But even he must have winced when he heard "Malcolm Glazer's gonna die" chanted around the stands at Old Trafford when he bought Manchester United in 2005. Since then, Glazer, now 80, has suffered two strokes and handed control of the club to his sons.
But as for mercy, forget it, say Manchester United fans. If anything, the chants have got worse. Yet for all the vitriol and threats, the Glazers seem determined to fend off the Red Knights' bid for the club, or at least hold out for the highest possible price (see below).
That won't surprise anyone who knows Glazer, says The Tampa Bay Business Journal. He has always been a "high-stakes poker player who holds his cards extremely close to his vest and only offers subtle hints as to how he will play them".
Glazer likes to describe his rise as a "true American success story", says The Guardian. The son of Jewish Lithuanian immigrants, he worked in the family watch-parts business in Rochester, New York, as a child. When his father died in 1943, he assumed responsibility for the business at the age of 15.
"Thereafter the tale has less charm." His 60-year career – spanning everything from property and sports clubs, to fast-food, fisheries and nursing homes – has been punctuated with bizarre court cases. He was dubbed a "slumlord" after he illegally charged the residents of one of his trailer parks $5 a month for keeping pets.
And, even after making his fortune, he fought his six siblings for a decade in the civil courts over his mother's $1m estate."He's like a machine – money, money, money. There's no other dimension," one sister later observed.
"Gimpish, orange-bearded and given to belting his trouser waistband ludicrously high", Glazer is a man "with no discernible friends", says the Daily Mail.
The recurring theme in his career has always been leverage, combined with "high nerve and astute analysis". He made his first pile borrowing heavily to buy cheap rental properties in Rochester. Then, in the 1980s, he reinvented himself as a corporate raider. A decade later, he made a killing in junk bonds.
Given his reported dislike and ignorance of sport, Glazer's move into American football – with the 1995 acquisition of the Tampa Bay Buccaneers for $192m – surprised some, says The New York Times. The rumour goes that "he once cheered for the wrong side". But, like his later acquisition of Manchester United, it was a pure business play.
Say what you like about Glazer – now reckoned to be worth $2.2bn – but at least he's consistent, says The Guardian. Back in 2005, Manchester United seemed an "enticing prospect for Glazer-style financing": a rock-solid asset that he could mortgage up to the hilt to crank up the potential returns. So it's little surprise that the top of the gripe list for fans is that Glazer and his three director sons have saddled a previously debt-free club with liabilities of £700m, while lining their own pockets.
But after years of fruitless battle, the Manchester United Supporters Trust has been invigorated by the Red Knights' attempted putsch. "In the coming days and weeks we can change everything", the group is telling its members. Maybe.
'World's most powerful football fans' plot a coup
The plot to snatch control of Manchester United from the Glazers has electrified both Old Trafford and the City, says The Observer, mainly because of the collective pedigrees of the Red Knights.
The group is led by Jim O'Neill, chief economist of Goldman Sachs. It also includes Keith Harris, chairman of broker Seymour Pierce, plus sundry other hedge-fund supremos, hot-shot lawyers and senior advertisers. But can what is perhaps the world's most powerful group of football fans pull off the coup?
Many in the City are sceptical, says The Sunday Times. It is thought that the Knights may need anything up to £1.5bn to buy out the Glazers and leave the club debt-free – hardly small change. They intend to raise about £500m from 50 or 60 "super-investors", a further £250m from rank-and-file fans, and would probably retain a £500m bond.
But the supporter-owned model is fraught with difficulties – and it is far from clear if they would get the backing of the club's CEO, David Gill (reported to dislike Keith Harris), or its manager, Sir Alex Ferguson.
Besides, the tilt carries personal risk for O'Neill, once described by BusinessWeek as "Goldman's rockstar". The Glazers are longstanding clients of Goldman Sachs (which helped with the £500m bond issue) and are threatening to terminate their relationship.
Rule one of Goldman's business principles states: "Our clients' interests always come first." Rule two begins: "Our assets are our people", notes Nils Pratley in The Guardian. So what happens when these principles collide? We may be about to find out
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