SBD/February 3, 2011/Franchises

Glazers Transfer ManU Parent Company Shareholding To Delaware Company

New ownership arrangement likely to make ManU fans further questions the Glazers
The ownership structure of Manchester United has become "even more opaque after the Glazer family shifted the ultimate ownership of the club to a new company incorporated" in Delaware, according to Paul Kelso of the London TELEGRAPH. Delaware is rated the "most secretive financial location in the world, and the change means that it will be even harder for supporters and media to establish the implications of the club’s corporate structure." The "most pressing issue concerning Manchester United's highly-mobilised fanbase is how the Glazers managed to clear" $403.6M (all figures US) of payment-in-kind (PIK) loans that "had been incurring interest at more than 16 per cent before it was abruptly paid off in November last year." Delaware's secrecy rules "mean that the directors, officers and shareholders of the new company are unknown, as is the source of the money used to repay the PIKs." The Glazers have "declined to say how they paid off the PIK loans, and whether any debt incurred to do so is still secured against the family’s shareholding in the club or related entities." Financial analyst Andrew Green said that the move "suggested the Glazers were trying to obscure the source." Green: "It is almost as if the Glazers are trying to keep information about the PIK repayment secret" (London TELEGRAPH, 2/3). The FINANCIAL TIMES' Roger Blitz reported the Glazer family in December filed an annual return for Red Football Shareholder Ltd., "one of United's two UK parent companies," showing that the Red Football partnership shares "have been transferred to a company called Red Football LLC." That company was incorporated in Delaware on Nov. 4, "three weeks before the PIK loans were paid off" (FT.com, 2/2).

FRIENDS OF THE DEVILS: In N.Y., Jere Longman examines the global popularity of ManU, which "counts 139 million core fans worldwide and as many as 339 million followers, has a jersey sponsorship with the insurance broker Aon that pays $34 million a year and a long-term deal with Nike worth $470 million in addition to profit sharing." The club "reaches its fans directly, and averages nearly 75,000 in attendance at Old Trafford, with another 300,000 annually taking tours of the stadium and visiting its team museum." With its own TV network that "reaches 192 million homes, 20 million unique monthly visitors to its Web site and 8.5 million followers on Facebook, Manchester United can control its message." A reporter seeking interviews "was told that nothing was possible without three to four weeks’ notice" (N.Y. TIMES, 2/3).
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