The Guardian

The Glazers gambled that it was impossible to lose on football. Now we can see they were right

- Nils Pratley

The Glazers, assuming they find a buyer, will depart Old Trafford as loathed by Manchester United fans as they were on arrival. They won’t give a damn, obviously. Malcolm Glazer, the penny-pinching patriarch who led the £800m takeover in 2005, was never hard to read and nor are his sons. They are interested in sporting success to the extent that it delivers financial success for them.

By the time Glazer died in 2014, the club’s equity was valued at £1.5bn – a commercial triumph given the thin sliver of hard cash, as opposed oodles of debt, that supported the buyout.

Seventeen years ago, many thought the family would fall flat on its face. Yes, Rupert Murdoch’s BSkyB had bid £623m for Man Utd in 1998 (and been blocked by competitio­n authoritie­s) but the value of TV football rights, some argued, would deflate with the popping of the turn-of-thecentury dotcom bubble. The club’s revenues in the 2003-04 year were only £169m, so £800m looked a severe overvaluat­ion. In late 2002, shares in Man Utd fell as low as 100p; Glazer paid 300p.

To get the deal done, the American was forced to the limit. Irish property and horse-racing tycoons JP McManus and John Magnier held a combined 28.7% stake and never knowingly undersell. They rebuffed Glazer’s first bid and rolled over only when the price was improved.

Financial pips squeaked as the buyer had to pay interest at 14.25% – paupers’ terms – on the PIK, or payment-in-kind, higher-risk debt. It took until 2010 to get the PIKs off the books.

The first half of the gamble, in effect, was that Sir Alex Ferguson would get the club into the Champions League every year, Old Trafford would remain full, merchandis­ing revenues could be boosted and Premier League TV rights would have further to rise. On all scores, Glazer was correct. The moment of maximum financial danger passed when a minority stake was sold by listing Man Utd in New York in 2012.

The second half of the Glazer years has been a quieter financial affair. Before Monday’s announceme­nt of a sale process, the stock had gone roughly sideways for a decade. The millions being paid in debt interest, plus the post-Ferguson decline on the pitch, weighed on the valuation.

The real game for Glazers, then, has always been about the exit. If the £4bn-plus speculatio­n is to be believed, they are about to win for a second time. Their victory will feel dispiritin­g to many. But a supposedly reckless financial gamble has proved anything but. Football just keeps inflating, which only feels obvious with hindsight.

Mood turns at Royal Mail

A week ago, the mood in the Royal Mail/CWU talks was improving, or so it appeared. Agreement on a pay deal felt close, and most of the negotiatin­g effort was reportedly concentrat­ed on redundancy terms and working practices.

That script has now been ripped up. Talks at Acas, the conciliati­on service, are over; the company has declared its offer, including a 18-month pay rise of up to 9%, to be “best and final”; the union has rejected the terms; strikes at Christmas are back on.

It is impossible from outside to determine why the breakthrou­gh never happened. Both sides will blame the other. But the workers have more to lose than Royal Mail’s shareholde­rs from the failure to reach a deal.

The boardroom promisecum-threat that “further [strike] action would necessitat­e further restructur­ing and headcount reduction” is, sadly, credible. Royal Mail made operating losses of £219m in the first half of the financial year and all the value in the group – now rebadged Internatio­nal Distributi­on Services – lies in its Amsterdam-based internatio­nal business, GLS.

Fair or not, shareholde­rs are insisting that GLS does not crosssubsi­dise a loss-making Royal Mail. Some will be lobbying for a full breakup, an outcome more likely to turn Royal Mail into the “Uberstyle gig economy company” that the CWU general secretary, Dave Ward, warns about. The offer on the table ain’t great when inflation is 11% – but it may be the best that can be achieved.

To get the deal done, the American was forced to the limit. Irish tycoons JP McManus and John Magnier held a stake and never undersell

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