What Glazer's Bid Could Mean For Football

[Chandler]

Let's dump the trash about the Glazer bid. He is not out to ruin Man U (unfortunately). In order for Man U to be financially successful FOR HIM it has to succeed on the pitch (this obvious logic seems to escape the IMUSA boneheads).

Now football clubs are not good investments - unlike other businesses which exist principally for profit rather than a successful product/service. Football clubs are run the other way round - championships before profit.

Every now and again though some commercially astute people can spot a glaring opportunity even in a football club (Chelsea wasn't that kind of opportunity - it was a passport for Roman). Glazer has obviously spotted Man U's brand potential. More to the point, he has almost certainly got something up his sleeve that will exploit that potential in a way that has not been considered before.

As we all know, two thirds of the paper for his buy-out is in loans. About half of this is securitised against his other business interests and the other half will be securitised against the assets of Man U (assuming he gets the 75% stake). This means that about a third of Man U's market value will be security in the event of the club defaulting on its debt repayments.

Sounds a lot but it isn't. More to the point, Glazer has got a very considerable asset by effectively paying only a third of it's actual cash value from his own pocket. In fact he wouldn't have to do that much now for Man U to comfortably cover its debt repayments and keep a market valuation close to its current valuation.

But Glazer isn't in business not to do very much. We've already heard about the merchandising potential for Man U in the Far East and in the United States. In the great sheme of things though, extra shirt sales aren't that big an income stream.

Then there is TV. Man U could well pull out of collective bargaining over terrestrial and go solo. This would bring in more income than the merchandising but would be harder to pull off and he would have to wait for the next round of negotiations in n years time.

So what is Glazer's big idea? All I can say is do you remember WIMBLEDON? This is how Glazer is really thinking. He knows that 'soccer' is booming in the US thanks to Corporate America's sponsorship of international football. 'Soccer' is tipped to be the No 1 spectator sport there by 2050

Glazer is a product of a sporting culture where teams are bought and relocated. Could this be what Glazer has in mind for Man U? Because under the rules of private ownership he could do this. Before he could do this he would have to really push the brand for a few years in that market.

Eventually he (or his sons) could sell out to a US billionaire in somewhere like Houston at a colossal profit say in ten years time (or take it there himself). Or he could create a sister club in the US branded in exactly the same way as Man U UK. And maybe in China too (where football's real future lies).

I understand that this maybe equally unpalatable to some as seeing Man U asset stripped (if such a thing is possible in football). But Man U were the first to go down the commercial road if memory serves me right by becoming the first football PLC (and in doing so stripping South Western and East Anglian clubs of 50% of their support).

So, live by the sword, die by the sword.

[Nationwider]

I think he'd have some difficulty in simply relocating the brand to the US, where they are notoriously insular about such things. The far-east might be more of a possibility for that plan.

A strong UK team is obviously of critical importance to him in the short-term, and I wouldn't be surprised if they enjoyed a honeymoon period under Glazer. The fun will begin if he starts to use ManYoo as a feeder for his team(s) in the American leagues, where the big money really is (or will be).

When you think about it, Glazer could actually be the saviour of English football, as the Beckhams and Lampards of this world leave Man Utd, Chelsea etc for £20M per year in New York, LA etc. The Premiership could effectively implode under the drain of talent, money, Sky to the US. PNE as Canon League Division One champions in 20 years? Swansea winning the Milk Cup? Fantastic.

Either way, they deserve what they get. They'll be crying into their Man Utd duvet covers in the bedrooms of Barnstable and Taunton tonight.