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All Things Footie | Tuesday, October 19 | Jordan

Newsflash: United ARE for $ale

Sorry to break this (obvious) news to the legions on Manchester United fans who are protesting otherwise, as well as those that have gone to the trouble of making lovely banners and disrupting reserve games, but contrary to your assertations: Manchester United ARE actually for sale. LOOK, or call your broker, either way, you (as well as Malcolm Glazer) can buy a litte (or large) piece of your football club. A little history lesson for you all:

Way back in the merry mists of time (well, 1878), the Lancashire and Yorkshire Railway Company (LYR) funded the creation of a football team called Newton Heath (or, Newton Heath LYR to be strictly accurate). After twelve years of doing rather well, the club went private in 1890, and a further dozen years down the line in 1902 nearly went bankrupt. Ditching the financial support of the LYR in favour of profiteering as a private company looked like bad move; that was until the Managing Director of Manchester Breweries—a gentleman by the name of John Henry Davies—stepped in with a consortium of local businessmen to clear the debts on the condition that the new consortium would take over the club and change the name. Manchester United was formed on the 28 April 1902.

The team became rather successful, and within a decade of being on the brink of bankruptcy had won both the league and the FA Cup. The consortium took out a big loan to move the club from Clayton and build a shiny new stadium in a slightly more salubrious area of Old Trafford. The (relative) success continued after the move in 1910, and another league championship was added to the trophy cabinet.

Alas, following the death of the club’s saviour Davies in 1927 and nearly 20 years of living beyond their means, trouble loomed again. In 1931 United were heavily in debt and unable to pay players’ wages when James W. Gibson, another wealthy local businessman, took charge of the club, paid the players and paid some of the club’s creditors, but it wasn’t enough. In order to bring United back to solvency and the path of success, Gibson issued a number of shares for sale to fans and businessmen raising £20,000 for the club. Gibson was the Chairman and major shareholder of the private company who owned Manchester United right up until his death in 1951 (he was also the man who approved the appointment of Sir Matt Busby).

Following Gibson’s death, Harold Hardman took over the Chairman’s position, but the running of the club was soon delegated to the Director Louis Edwards (a surname all United fans will be familiar with) shortly after elected shortly after the Munich air disaster. Edwards became chairman in 1964 following the death of Hardman and began the financial revolution at Manchester United. Driven by a desire to turn Old Trafford into the country’s best stadium, Edwards masterminded a huge (and highly controversial) share issue, increasing the number of shareholders by a factor of 20 (taking the number of people with a vested financial interest in the club from 90 to 2000 people). It raised over £1m, and took the club to a new level financially, but at the expense of board and shareholder freedom. With the company still being private however, shares were not openly traded, and it was not possible for just anyone to buy in, and certainly not possible for anyone to take control of the club without the agreement of the MD.

Despite the financial windfall that the share issue provided, United enjoyed relatively little success with Louis, and the same was to follow later (from 1980 when Louis Edwards passed away) with his son Martin, at the helm. In 1984, Robert Maxwell tried (and failed) to buy United for £10m, and in 1989 Michael Knighton attempted a takeover that also failed (with a little help from a bitter Robert Maxewell).

Manchester United Football Club became Manchester United PLC on May 31 1991. The conversion of the club from a privately owned business with only itself to care about to a publicly owned company that has a legal responsibility to maximise profit for it’s 2,597,404 unvetoed shareholders, earned the company £10m to spend on developing the stadium and buying players. It’s no coincidence that this windfall, and this change in the way the club is run and owned, could not coincide more perfectly with the upturn in fortunes of Manchester United. Alex Ferguson joined the club in 1986, yet it took him until 1993—after the shares windfall—before they won the league. Of course Ferguson played a huge part in United’s success in the nineties, but so did the conversion of the company from a privately owned business with it’s own interests at it’s heart, to a publicly run company with profits for shareholders it’s raison d’être.

Now we’re seeing the dark side of PLCs, takeovers by shady, ginger, American milloinaires who’ve never seen United play. But I didn’t hear any fans complaining about the state of affairs when United were winning trophies and when they’re spending £20m a year on players off the backs of shareholder investment. No. Manchester United is a PUBLIC limited company, it IS for sale, to anyone with a stockbroker and some money. As it is, nearly 15% is owned by an Arsenal supporting Irish horse racing magnate who’s fallen out with the boss; how is that any better than a rich American TV/sports mogul? One thing Glazer has on his side, and what no amount of daft protests will put asunder, is that whoever owns Manchester United, wherever they play, and however well they’re doing—people will still pay money to watch them and buy the replica shirts, because us football fans are stupid like that. United took a gamble when they formed a PLC, a gamble with significant short term gains, and possibly equally significant long-term losses. The only way out of the situation would be for someone to buy out all the shareholders and reform a private company, but that just doesn’t happen, because to some people—money is more important than anything.

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