United They Stand, but Is England's Model Soccer Club Due for a Fall?

Manchester United ended an empty season of dreadful reconstituence May 21, losing England's FA Cup final to hated rival Arsenal despite mostly dominating the game. No one scored in regulation time,

May 25, 2005 at 2:06 pm

Manchester United ended an empty season of dreadful reconstituence May 21, losing England's FA Cup final to hated rival Arsenal despite mostly dominating the game. No one scored in regulation time, and United lost its last final as the people's football club in a 5-4 shootout defeat.

Ordinarily, ownership changes in professional sports are mostly trivial for fans. A new owner might mean a new way of doing business, but it's never before been heralded as the "death of the club," as the Indepenent Manchester United Supporters Association labeled the FA Cup final with Arsenal.

The presumed death of Manchester United certainly revived the FA Cup, which brought the largest television audiences in years to its final. Whether they tuned in for continuance of a great rivalry, as a bow to tradition or to witness the end of an era is anyone's guess. But the end of an era isn't a bad guess.

The United faithful are fit to be tied because an American, Tampa Bay Buccaneers owner Malcom Glazer, has maneuvered to purchase the club's majority shares. If United fans rooted their sometimes violent protests in anti-Americanism, they would rightly be ridiculed as drama queens. But United fans aren't worried merely that their beloved now are owned by a man from a country that treats soccer like a carpet stain — Glazer has purchased control at the cost of putting the team into deep debt and probably removing it from the London Stock Exchange.

Debt nearing a half billion bucks is a circumstance unknown to professional sports teams in the United States, since they're often gifted with publicly financed stadiums, without which the Buccaneers wouldn't make the mad profits they enjoy. Removal from the stock exchange is mostly symbolic. When United went public in 1991, too few fans invested to keep the club from always being controlled by a handful of investors.

In every world, deep debt precurses a deep downward spiral. But it's especially visible in the world of European soccer. Leeds United, for instance, spent itself into the hole seeking European glory in recent years, only to collapse to a 14th place finish in England's second division this season.

Now the onus is on Glazer to be certain the same doesn't happen to Manchester United, the most glorious franchise in English soccer history. The very structure of his purchase makes it an even-money proposition that it might.

No one suspected an American would take over the club until a year ago, when Glazer began making serious moves to take control. He's moved slowly into the picture, but now he owns 75.7 percent of the club, just more than the 75 percent threshold for full control over the franchise.

Glazer isn't about to stop there. A group of share-holding fans, Shareholders United, is worried he'll up his stake to 90 percent, in which case he can force the remaining shareholders to sell their shares to him. From an investment standpoint, selling out to Glazer wouldn't be a terrible idea, given fears that his purchases already put United in such poor financial position that it won't be able to maintain its present stature let alone make the improvements needed to match Chelsea and Arsenal, which have run ahead of United in the last two years. But the heart has its own reasons.

Borrowing heavily to buy the club, Glazer's $1.5 billion purchase has piled $480 million of debt into an operation that has, in recent years, been the absolute model for how to do business in European soccer. Last year, United made $50 million on $310 million in revenues. Just the service interest on a $480 million debt will substantially cut into the club's profits, if those profits aren't eliminated completely.

So all manner of Doomsday scenarios are in the wind. Unless Glazer is a kindly gent who just wants the fun of owning the world's most famous athletic franchise and doesn't mind draining millions every year on his hobby — and it's unlikely he feels that magnanimous toward United fans after the way he's been pilloried of late — then ticket prices are bound to increase. Some fear Glazer will attempt to wrangle out of the Premiership's collective television agreement and work a better deal independently. Worst of all, he might even sell naming rights to Old Trafford, the club's storied stadium.

And if all that comes to pass, the chance exists that United still will barely make it. Glazer is a pauper compared with Chelsea owner Roman Abramovich, who turned his club into a worldwide power within a couple years. Arsenal is taking on massive debt, but it's for a new stadium that could more than double the Gunners' revenues.

Add it all up, and we could be looking at an era of Chelsea dominance in English football to be prevented only by the occasional upset. No other team even approached the top three this year in the Premiership, won easily by Chelsea with Arsenal a distant second and Manchester United a less distant third.

Upsets happen in European football, which not only gives everyone hope but can really screw up the competitive order. Liverpool will play an Italian squad, AC Milan, for the Champions League title Wednesday, knowing full well it's playing for a championship it won't be allowed to defend. The Reds finished fifth in the Premiership, and only the top four clubs qualify for next year's Champions League.

But give Liverpool another year. If Glazer's control over Manchester United brings the dire consequenes its fans fear, the traditional power will fall out of the Premiership top four within a year or two, making room for another English club in the European competition. The one opponent no one can easily beat is debt.