Saturday, June 11, 2005

The intentions of Manchester United’s new owner, U.S. sports tycoon Malcolm Glazer, for the club have been revealed. Although spokespersons for Mr. Glazer (including his son) have stressed that nothing has been finalised, it appears that he intends to raise ticket prices, income, profits whilst capping spending on player transfers.

Mr. Glazer – who owns over 76.2% of the club’s shares through his investment company, Red Football – enraged fans when he started to accumulate shares earlier this year in an attempt to gain control of the what amounts to the world’s most successful football club. Manchester United has more fans, a higher market value, a more valuable and more widely recognised brand and is more profitable than any other football club in the world.

To gain control of the club, Glazer used borrowed money and he is set to transfer this money to the club’s books when he gains full control. The borrowed money will result in large interest repayments – pushing the clubs finances into the red. To counter this Mr. Glazer apparently intends to raise ticket prices by about 50% and to increase revenues by 52% to £245.6m (from £161.5m this year) over the next five years. Apart from ticket price increases, this jump in revenue will be achieved by a 61% jump in match day sales, a 13% increase in media sales, and a 76% rise in sales of merchandise and other commercial activities.

As part of his plans, expenditure on player transfers will be capped at just £25m a year. This is a very low figure for a English football club endeavouring to win domestic and European trophies. Seven years ago the club spent £28m on players, since then expenditure in England on players has increased hugely.