The word spread quickly through the London Stock Exchange last
Thursday: The American is back. Tampa Bay Buccaneers owner
Malcolm Glazer had again raised his stake in Manchester United,
the world's most valuable sports franchise, setting off a new
round of speculation: Is the secretive Glazer planning a full
takeover of Man United? If not, what exactly is he up to?
Glazer's purchase increased his holding in Man U from 18.3% to
19.2%, second only to the 28.9% owned by horse-racing magnates
John Magnier and J.P. McManus. But while those two Irishmen have
stopped short of the 30% that would require them under market
rules to make a cash offer to all other shareholders at the
highest price paid in the previous 12 months, observers wonder if
Glazer might go all the way. Asked his intentions last winter by
British regulators, Glazer (who declined SI's interview request)
released a vague statement saying he had "no current intention"
of taking full control. That hardly precludes an eventual bid,
one that Man U insiders say would be driven by Malcolm's son
Joel, a Bucs executive vice president.
Glazer's foray into the NFL has worked out splendidly by any
measure. Since buying the lowly Bucs in 1995 for a then
league-record $192 million, Glazer has persuaded Tampa voters to
finance the $169 million construction of Raymond James Stadium,
guided the team to a Super Bowl win (in 2003) and hiked the value
of his investment to an estimated $671 million. But can Glazer
afford to own Man U? By Monday, United's stock price had risen a
modest 2.4% since his latest buy, giving the club a market
capitalization of $1.2 billion. (The most valuable U.S. sports
franchise is the privately owned Washington Redskins, worth an
estimated $952 million.) Glazer would likely have to bid on the
rest of the Man U shares at a premium--say, $1.6 billion--and NFL
rules prevent his using the Bucs as collateral. Last year Forbes
put Glazier's net worth at $1 billion, which would leave him only
$329 million for the purchase. That has led to speculation that
an investing partner might enter the picture.
Analysts are divided over whether Man U is a good investment.
"There's enormous profit to be made, not only now but in the
future as soccer takes more of a hold in the U.S.," says Dean
Bonham, a Denver-based sports industry analyst. Not so fast, says
Andrew Lee of Dresdner Bank in London. "It's not obvious where
you would extract more value at the moment," he says, citing the
current weakness of the dollar against the British pound, Man U's
stagnant short-term TV revenues and doubts that soccer will take
hold Stateside. Bulls counter that the market in China is a
potential gold mine for Man U and that the team, despite middling
results on the field last season, announced a 32% increase in
first-half profits on March 30.
As might be expected, the prospect of an American owner with
little connection to the club's 126-year history hasn't sat well
with United's diehard fans. Membership in Shareholders United,
which urges supporters to buy Man U stock, has risen to 10,000 in
the past year--a 517% increase. "Every share we have helps build
a wall to stop these people," says SU vice chair Sean Bones, a
44-year-old Manchester factory worker. By year's end the group
hopes to have 100,000 members buying $1.8 million of Man U stock
per month through its website (www.shareholdersunited.org). It
couldn't stop a takeover, but it would send a message to Glazer,
one that SU members will display on leaflets during United's
upcoming U.S. tour: NOT FOR SALE. --G.W.