US of A

To be quite honest, I’m spoilt for choice today, on football finance stories to mull over.  What with Rangers omission from the SPL etc.

However, I want to reflect on the happenings at Manchester United, perhaps coincidentally this American Day of Independence. Today actually means more to me as it’s my Father-in-Law’s birthday, Necati Kur (pictured). Those of you that know me or read my posts are aware of my contractual allegiance to the FC United of Manchester rather than its ‘big brother’. This team formed in reaction to dissatisfaction with the affairs surrounding the American businessmen, ‘The Glazers’’ takeover. 

Late last night, and so mainly aired today, ‘Man U’ announced that it would seek to raise circa $60M via the New York Stock Exchange.

MUST (Manchester United Supporters Trust) has commented: “Until we have more detail it is impossible to say with certainty what this will mean for Manchester United or its supporters. However, from the initial information we have it appears that the new A shares on offer will be inferior to the Glazers’ own B shares as they will carry only 1/10 of the voting rights. Furthermore the preliminary filing appears to indicate they will not be paying dividends either. So a minority shareholding with inferior voting rights and no dividends is going to severely impact on the attraction to both financial and supporter investors.  However if it turns out that the vast majority of the proceeds are used to pay off the debt that is certainly something MUST would welcome and entirely vindicates our longstanding position that their debt was damaging our club.”

The Barclays Premier League’s Club filed documents with the United States Government’s Securities and Exchange Commission yesterday. Man U would use the money raised from the flotation to reduce its substantial (some might argue unsustainable) debts.

This latest tactical move by The Glazer’s hierarchy, is hot on the heels of the $1Bn (£640M) flotation tried last year via Singapore’s equivalent stock market.  The plug was pulled on that due to the volatility of the World’s economy.

The BBC reported that: “The Glazers borrowed large sums of money to buy the Club and the interest payments on this debt are onerous. In 2010, the owners converted these loans into a bond in order to reduce the interest, but analysts say the share sale demonstrates how the club remains weighed down by its heavy debts, despite its huge global fan base and promotional and marketing efforts. The Club currently owes £423M”.

Playing financial-football with a global brand?