By Rood in conjunction with Bagsy Not In
At Old Trafford, 2010 is more likely to be remembered for off the pitch going ons rather than for footballing reasons. The ‘Green and Gold’ campaign was launched and grew rapidly as many fans protested against the Glazer family due to worries over debt levels following a very public refinance deal.The Red Knights arrived with much fanfare and promised much but so far have failed to deliver the fan friendly takeover that supporters have been waiting for.
Many fans are asking how we ever ended up with this situation of leveraged takeovers, foreign investors and multi-million pound bond issues?
The story starts way back in the early 1900s when a group of local businessmen saved struggling Newton Heath FC from bankruptcy with an investment of just £500. The club was renamed Manchester United FC and changed status from a member owned club to a limited company.
Under the chairmanship of brewer JH Davies, the club rose from Second to First Division and became national champions for the first time in 1908 - a couple of years later a site was acquired for a new stadium and Old Trafford was born on the banks of the Bridgewater Canal, a second title soon followed.
After the death of Davies in 1927 the club encountered financial difficulties until being saved by Manchester entrepreneur, James Gibson, in the early 1930s. Gibson’s legacy was the appointment of a young Scottish manager, Matt Busby, just after the war in 1945. Following Gibson’s death, his son Alan inherited the club and became chairman overseeing a period of great success under Busby in the 1950s.
In the aftermath of the Munich tragedy, a wealthy fan from Salford managed to fulfill his dream of becoming a club director and started buying up as many shares as possible – by 1964 Louis Edwards had taken a controlling interest in the club for an investment which valued the club at around £100,000. Initially, Edwards invested money into the club which resulted in a second wave of success for Busby and United become champions of Europe for the first time. However, Busby resigned a year later and the club’s fortunes took a turn for the worse.
By the late 70s, the Edwards family business was struggling – Louis bought in his son, Martin, as director and he devised a plan to start making profit from the club. At the time, FA regulations limited the level of dividends that could be taken from all league clubs but Edwards bypassed these rules by way of a rights issue which bought investment into the club by giving all shareholders the right to buy extra shares and thus earn far higher annual dividends.
While Louis was undoubtedly a United fan, his son Martin was more interested in how much money he could make with the shareholding he inherited upon his father’s death in 1980. First, Edwards Jr banded together with other club chairman and pressured the FA into relaxing laws which stopped club directors from taking salaries. He then began trying to cash in on his shareholding and is thought to have discussed a deal with media millionaire, Robert Maxwell, but they could not agree on a price.
Edwards was disliked by the fans and was continually looking for a way out of the club, however he does deserve some credit for repeating history and taking a chance on a young Scottish manager who would bring the glory days back to the club. Finally in 1989, Edwards agreed a deal to sell the club for £20m to a consortium led by Michael Knighton who had already identified the huge potential of the Manchester United brand. The deal fell through but the club still implemented many of Knighton’s ideas and two years later floated on the London Stock Exchange with an increased valuation of £45m.
Again FA financial rules had been ignored but the the very real threat of a breakaway of the biggest clubs meant the FA turned a blind eye and in fact welcomed the increased investment into the English game. Football had now officially embraced big business and this would go on to have a huge impact on the English game over the coming years.
Many fans are thought to have bought shares at the time of initial floatation and they were rewarded as the share price steadily increased due to the formation of a breakaway league and the advent of large TV deals for clubs. The club prospered in the new Premier League with several title wins under the guidance of Alex Ferguson and by 1996, Manchester United were recognised as the richest sports club on the planet.
In September 1998, Edwards and the board accepted an offer from Rupert Murdoch of BskyB which valued the club at nearly £650m, a huge increase from the original value at floatation just a few years earlier.
Many fans opposed the sale and a group calling themselves Shareholders United Against Murdoch (aka Shareholders United and now MUST) formed to lobby against the takeover. In the end, the influence of the fan groups was minimal as it was government competition rules which meant the takeover was ruled against the public interest and blocked in 1999.
Further takeover rumours and continuing success under the brilliant Ferguson, which culminated in an unprecedented ‘Treble’, sent the share price to all time highs and the market value of Manchester United PLC briefly broke the £1 billion barrier in 2000.
However, the stock market soon took a nosedive and uncertainties over the future of the club following Fergie’s preannounced resignation sent the share price tumbling to only a third of its peak value. Many fans who participated in the original floatation are thought to have sold out during this period – some due to financial necessity while others sold out in protest against Edwards trying to sell out to Sky. Hindsight tells us that this was a bad move on the part of the fans and left the club vulnerable to the advances of business vultures.
First to take advantage were Irish investors JP McManus and John Magnier, part of the so called ‘Coolmore Mafia’. They began buying cheap shares that had been offloaded by fans, private investors and Edwards himself. They were good friends with Fergie and it was thought that they would soon launch a takeover bid.
But by 2003 Coolmore and Fergie fell out in a disagreement about a race horse – the bitter and very public dispute between manager and largest shareholder destabilised the club. Around the same time a US investor arrived on the scene and began hovering up all available shares. The issues off the field resulted in a relatively dark period for the club as for the first time since the start of the Premier League; United went 3 years without winning the championship.
In late 2004, the Glazer family announced their intentions to buy the club but their initial approach was turned down by the board as it was deemed too aggressive. MUST also hoped to block the deal by encouraging fans to buy shares but unfortunately it was a case of too little, too late as nowhere near enough fans purchased shares to make a difference. Despite the boards’ reluctance to accept the takeover offer, the Glazers came back with an improved bid and the club was effectively powerless to stop it once Coolmore agreed to sell their stake to the Americans.
By June 2005 Glazer had completed a £800m buy out of the club and another period of great success followed for the club with Fergie building yet another great team and the club becoming European and World club champions.
Fast forward 5 years since the Glazer takeover and we have now had the a very public attempt from the ‘Red Knights’ to put together a deal to buy out the Glazers - but what is the club really worth today?
The Red Knights themselves say £1 billion is ‘fair value’, Forbes give a £1.2m valuation based on revenues, and it is thought that Glazers are looking for offers upwards of £1.5billion before they even consider listening to any offer - their official line remains that the club is 'not for sale'.
That means that in the space of just over 20 years, the value of Manchester United has risen from £20 million to over £1 billion, which is an incredible 50 fold increase - and as long as revenues and profits continue to grow, it seems the growth story of Manchester United still has some way to go ...
At Old Trafford, 2010 is more likely to be remembered for off the pitch going ons rather than for footballing reasons. The ‘Green and Gold’ campaign was launched and grew rapidly as many fans protested against the Glazer family due to worries over debt levels following a very public refinance deal.The Red Knights arrived with much fanfare and promised much but so far have failed to deliver the fan friendly takeover that supporters have been waiting for.
Many fans are asking how we ever ended up with this situation of leveraged takeovers, foreign investors and multi-million pound bond issues?
The story starts way back in the early 1900s when a group of local businessmen saved struggling Newton Heath FC from bankruptcy with an investment of just £500. The club was renamed Manchester United FC and changed status from a member owned club to a limited company.
Under the chairmanship of brewer JH Davies, the club rose from Second to First Division and became national champions for the first time in 1908 - a couple of years later a site was acquired for a new stadium and Old Trafford was born on the banks of the Bridgewater Canal, a second title soon followed.
After the death of Davies in 1927 the club encountered financial difficulties until being saved by Manchester entrepreneur, James Gibson, in the early 1930s. Gibson’s legacy was the appointment of a young Scottish manager, Matt Busby, just after the war in 1945. Following Gibson’s death, his son Alan inherited the club and became chairman overseeing a period of great success under Busby in the 1950s.
In the aftermath of the Munich tragedy, a wealthy fan from Salford managed to fulfill his dream of becoming a club director and started buying up as many shares as possible – by 1964 Louis Edwards had taken a controlling interest in the club for an investment which valued the club at around £100,000. Initially, Edwards invested money into the club which resulted in a second wave of success for Busby and United become champions of Europe for the first time. However, Busby resigned a year later and the club’s fortunes took a turn for the worse.
By the late 70s, the Edwards family business was struggling – Louis bought in his son, Martin, as director and he devised a plan to start making profit from the club. At the time, FA regulations limited the level of dividends that could be taken from all league clubs but Edwards bypassed these rules by way of a rights issue which bought investment into the club by giving all shareholders the right to buy extra shares and thus earn far higher annual dividends.
While Louis was undoubtedly a United fan, his son Martin was more interested in how much money he could make with the shareholding he inherited upon his father’s death in 1980. First, Edwards Jr banded together with other club chairman and pressured the FA into relaxing laws which stopped club directors from taking salaries. He then began trying to cash in on his shareholding and is thought to have discussed a deal with media millionaire, Robert Maxwell, but they could not agree on a price.
Edwards was disliked by the fans and was continually looking for a way out of the club, however he does deserve some credit for repeating history and taking a chance on a young Scottish manager who would bring the glory days back to the club. Finally in 1989, Edwards agreed a deal to sell the club for £20m to a consortium led by Michael Knighton who had already identified the huge potential of the Manchester United brand. The deal fell through but the club still implemented many of Knighton’s ideas and two years later floated on the London Stock Exchange with an increased valuation of £45m.
Again FA financial rules had been ignored but the the very real threat of a breakaway of the biggest clubs meant the FA turned a blind eye and in fact welcomed the increased investment into the English game. Football had now officially embraced big business and this would go on to have a huge impact on the English game over the coming years.
Many fans are thought to have bought shares at the time of initial floatation and they were rewarded as the share price steadily increased due to the formation of a breakaway league and the advent of large TV deals for clubs. The club prospered in the new Premier League with several title wins under the guidance of Alex Ferguson and by 1996, Manchester United were recognised as the richest sports club on the planet.
In September 1998, Edwards and the board accepted an offer from Rupert Murdoch of BskyB which valued the club at nearly £650m, a huge increase from the original value at floatation just a few years earlier.
Many fans opposed the sale and a group calling themselves Shareholders United Against Murdoch (aka Shareholders United and now MUST) formed to lobby against the takeover. In the end, the influence of the fan groups was minimal as it was government competition rules which meant the takeover was ruled against the public interest and blocked in 1999.
Further takeover rumours and continuing success under the brilliant Ferguson, which culminated in an unprecedented ‘Treble’, sent the share price to all time highs and the market value of Manchester United PLC briefly broke the £1 billion barrier in 2000.
However, the stock market soon took a nosedive and uncertainties over the future of the club following Fergie’s preannounced resignation sent the share price tumbling to only a third of its peak value. Many fans who participated in the original floatation are thought to have sold out during this period – some due to financial necessity while others sold out in protest against Edwards trying to sell out to Sky. Hindsight tells us that this was a bad move on the part of the fans and left the club vulnerable to the advances of business vultures.
First to take advantage were Irish investors JP McManus and John Magnier, part of the so called ‘Coolmore Mafia’. They began buying cheap shares that had been offloaded by fans, private investors and Edwards himself. They were good friends with Fergie and it was thought that they would soon launch a takeover bid.
But by 2003 Coolmore and Fergie fell out in a disagreement about a race horse – the bitter and very public dispute between manager and largest shareholder destabilised the club. Around the same time a US investor arrived on the scene and began hovering up all available shares. The issues off the field resulted in a relatively dark period for the club as for the first time since the start of the Premier League; United went 3 years without winning the championship.
In late 2004, the Glazer family announced their intentions to buy the club but their initial approach was turned down by the board as it was deemed too aggressive. MUST also hoped to block the deal by encouraging fans to buy shares but unfortunately it was a case of too little, too late as nowhere near enough fans purchased shares to make a difference. Despite the boards’ reluctance to accept the takeover offer, the Glazers came back with an improved bid and the club was effectively powerless to stop it once Coolmore agreed to sell their stake to the Americans.
By June 2005 Glazer had completed a £800m buy out of the club and another period of great success followed for the club with Fergie building yet another great team and the club becoming European and World club champions.
Fast forward 5 years since the Glazer takeover and we have now had the a very public attempt from the ‘Red Knights’ to put together a deal to buy out the Glazers - but what is the club really worth today?
The Red Knights themselves say £1 billion is ‘fair value’, Forbes give a £1.2m valuation based on revenues, and it is thought that Glazers are looking for offers upwards of £1.5billion before they even consider listening to any offer - their official line remains that the club is 'not for sale'.
That means that in the space of just over 20 years, the value of Manchester United has risen from £20 million to over £1 billion, which is an incredible 50 fold increase - and as long as revenues and profits continue to grow, it seems the growth story of Manchester United still has some way to go ...
perceptive