Football and debt have never been strangers. All football clubs have had debts but, until the mid 1980s, not only was this debt fairly small but mostly a local matter.

Football clubs, certainly the ones in Britain, were owned by local businessmen and the debts were usually provided as overdrafts from banks, with the Co-operative Bank very prominent. Even then it is interesting to note that Liverpool, which dominated English football for much of the 60s, 70s and 80s, carried little or no debt with its then chief executive Peter Robinson, one of the shrewdest administrators in the game, making sure the club lived within its means.

It was in the nineties, as television poured into football, that the game became a tool of high financiers. Creative City types who may not have known or cared much about football devised fancy financial instruments which enabled clubs to borrow large sums. The most fashionable concept was to pledge as security the stadium or future earnings – either season ticket sales or television or other commercial income.

All this was encouraged by a change in the psychology of the game and the expectations of the fans. The game had begun to feel the long term impact of the abolition of the maximum wage with players attracting huge salaries and some highly valued players demanding the sort of money that gave them the status of pop stars. As this was happening, fans were no longer content with their teams just bumping along while a few clubs enjoyed success.

Now fans of all clubs wanted success and expected their owners to provide it, if necessary with large dollops of money to buy star players. And, if the owners were not rich enough, then they borrowed, as Leeds under Peter Ridsdale did – seeking to buy the dream and ending in a nightmare.

At the same time, the transformation of football from a game into a worldwide marketing and sponsorship tool attracted people who saw the opportunities to make money.

In this, English football is not unique. Other sports in other countries also provide such opportunities. Baseball, American football and ice hockey in North America, cricket in India.

But what makes English football unique is that there are no restrictions on who can buy a football club and what an owner can do with it. It has not always been so. In the early eighties, when Irving Scholar wanted to buy his beloved Tottenham, he found that the directors of the club had the right to refuse to register his shareholding. This was specified in the articles of association of the club.

Some years earlier, a certain Mr Berry had challenged this but lost a High Court action. Scholar had to devise ingenious schemes to win Tottenham. He eventually floated the club on the stock market, the first club to do this. And as the FA did not allow clubs to pay dividends, he made the football club into a subsidiary of the plc. The plc paid dividends and got round this football rule. All this helped set the pattern for the easy buying and selling of clubs.

In a sense, the Glazers’ ownership of Manchester United, which is again under severe scrutiny as they trawl round the world trying to sell a £500m bond issue to refinance the club’s debt, is a legacy of the change brought by Scholar.

It must be said that the Glazers have been a different kind of owner, the like of which the English game has not seen. Until the bond issue brought the limelight back on their finances they have worked below the radar. They strengthened their financial control of the company but they did not give interviews or make themselves publicly available. Indeed they so separated the finances from the football activities of the club that they moved the financial operations to an office block in London’s Pall Mall. Headed by Edward Woodward, the City expert who had been at J.P. Morgan when Glazers secured the finance to buy United, he has that very American title “chief of staff”.

However on issues that concern most fans – the events on the field – the Glazers have left almost everything to Sir Alex Ferguson. The Glazer relationship with Ferguson is a fascinating one.

For the latter half of the Martin Edwards’ regime, Ferguson was almost at war with Edwards as Ferguson’s descriptions about trying to get more money out of Edwards illustrate. Ferguson, also, never stopped complaining about the plc and how it hampered his style.

He cannot praise the Glazers enough. Like the friendship that developed between Aneurin Bevan, the Labour politician and arguably the most charismatic socialist of the last hundred years and the Canadian millionaire and press baron Lord Beaverbrook, Ferguson, our most high profile modern day socialist, seems happiest with a rich foreigner.

But the need to refinance their debt has forced the Glazers to make the sort of disclosures that they have not in the past. This is in the form of a 322 page document that has been provided to prospective investors, the search for which has seen road shows in Hong Kong, Singapore, Paris, Edinburgh and last week in the ballroom of the Berkeley Hotel in London.

The document reveals that the Glazers have taken £23 million from the club in the last five years, including a £10 million loan to the family members who sit on the board. They can also take out as much as £6 million a year until 2017, when all the debt matures.

The document also shows that all of United’s assets including the 76,000-seat Theatre of Dreams, as Old Trafford is called, could be put up as security. And what is more, the document acknowledges that, if cash flows are less than projected, there might have to be substantially more borrowings or equity finance.

The big worry over the future is what will happen when Ferguson retires, which he may do so in two years when he reaches 70. This could create an even bigger problem than the one United faced when Matt Busby retired. Or, as the bond document puts it, the new manager “may not be as successful”.

All this may have been talked about behind locked doors in Pall Mall but it has never been spelled out in such clear detail in a document before. For fans who have always been against the Glazers this only proves them right. Their main gripe is that the Glazers borrowed money to buy their club and turned a debt-free club into a debt-ridden one.

As far as the Glazers are concerned, this refinancing is part of their long term strategy. They have refinanced their debt once already back in 2006, a year after they took the club. Then the financial climate was very different, pre-credit crunch. How easy the refinancing will be today remains to be seen. They will make much of the fact that they not only run a tight financial ship but they have secured better sponsorship deals for the club.

But all this does not deal with the fundamental issue which is: shouldn’t there be some control of football clubs? Shouldn’t the special nature of the game and the relationship it has with fans be recognised? In their homeland of America, the Glazers could not do what they have done here – just come in and buy a club. In the land of capitalism, sporting socialism reigns, so much so that, in baseball and the NFL, all the clubs have to agree to a new owner coming in.

I have always felt that, to compensate for the changes of the eighties, we in this country need to look at the American model and regulate the free-for-all system we have thoughtlessly allowed to develop. The problem is that our legislators do not have the stomach for it and our football administrators are horrified by the idea of it.


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