Glazer a winner in business of sport

FOR a man who wears €30 jeans, €1.15 billion seems a lot of money to splash out on a football club.

Yet, for Malcolm Glazer, the takeover of Manchester United combines two things he loves the most: making money and winning championships. Given his reputation for penny-pinching, sporting triumphs come second.

As he enters the last leg of his 18-month battle to buy the club, the New Yorker can say it is his finest achievement in a business career spanning 60 years.

That’s saying something, given we are talking about a 76-year-old whose estimated wealth stood at a reported $1.1bn in 2003, putting him at number 514 on Forbes’s list of the world’s richest people.

Born into an emigrant family in 1928, Mr Glazer’s upbringing was a world apart from that of his children. Instead of vast mansions in Florida, it was a room shared with his seven brothers and sisters under the eyes of his beloved father Abraham and mother Hannah.

After the sudden death of his father in 1943, he was left to take care of the family’s struggling watch-parts business. Over the years he made it profitable and then set about expanding.

Deals followed quickly through the 1960s and 70s as he moved from one industry to another, along the way picking up trailer parks, fast food restaurants, nursing homes, a fishing fleet and anything else he could make more profitable.

Amassing a small fortune, he was relatively unknown until a series of audacious business deals and bizarre court cases thrust him into the spotlight in the 1980s.

For a decade he fought a legal battle with his sisters over the contents of his mother’s will, while another involved the residents of a trailer park suing him for illegally charging them rent for pets.

In the space of five years he lost bidding battles for the train company US Conrail, the Formica table and furniture business and motorcycle legend Harley Davidson.

But it was not until 1995, at an age when most retire, that Glazer pulled off a coup, the €200 million purchase of the Tampa Bay Buccaneers American football team.

The team had struggled, on and off the sporting field, and it was only with the investment of both Mr Glazer and the Florida taxpayers that the team moved to a state-of-the-art stadium and eventually the Superbowl.

With the help of the Glazers, the team was raking in cash from merchandise, television rights and hiking ticket prices. Biographer Allen St John described Mr Glazer’s attitude to being an owner of a sports club as no different to running any other business.

“He is different from other sports franchise owners in that he is very much a businessman and he is proud of that. At a certain point, many of them are almost embarrassed to talk about how much money they have made, whereas Glazer is completely unapologetic about that. For him, it is not just about sporting victory but also about business victory. He is just as happy to make money on something as win a championship.”

The takeover of the Buccs also marked the beginning of his preferred way of getting control: use his own cash to buy a small stake and borrow heavily for the rest, lobbing the loans on the books of the company.

This is exactly how he plans to fund the takeover of United - the main reason why the club rejected his various offers over the past year or so.

The Leprechaun’s interest in United emerged in 2003. After losing out on a bid for the LA Dodgers baseball team, the family turned its attention to the former Premier League champions and bought a 3.17% stake.

At the time, the club was too busy worrying about the intentions of Irish racing tycoons John Magnier and JP McManus to bother with the diminutive American.

As United fought with the Irish, Glazer steadily built up a 28% stake in the club at the cost of around €300m and last summer attempted a bid. The offer was rejected by Mr McManus and Mr Magnier because of the pre-conditions that they wouldn’t get the cash until the deal was accepted by all shareholders.

If the club and fans thought he would go away licking his wound, they seriously underestimated Mr Glazer’s determination. The resident of Palm Beach, Florida, has business interests which include food supplies and packaging, broadcasting, health care, banking, gas, oil, stocks, securities and bonds. He didn’t assemble such an empire by taking no for an answer.

Using his shares at United’s AGM, he voted off three directors and eventually forced the board to the negotiating table. While the directors have not recommended the bid to shareholders, the deal is a certainty after he bought the shares held by the Irish racing tycoons.

His knowledge of football may be limited, but there is little doubt that Mr Glazer knows how to make the club successful. Despite the fears of fans that the club will run purely for the enrichment of the Glazer family, others think the hostility is misplaced.

“The Glazers have to be fans at some level. They could have invested money in other things.

“Sports franchises aren’t exactly the most stable things in the world and they have been known to fold,” according one person who knows the American millionaire.

Malcolm Glazer factfile

1928: Born Rochester, New York, into an Orthodox Jewish family that migrated to the US from Lithuania.

1943: At the age of 15, following the death of his father Abraham, Glazer took over the family watch-parts shop in Rochester, New York. At the time, estimated to have just $300 to his name, Glazer builds up his fortune. Marries Linda and has six children: Kevin, Bryan, Ed, Darcie and soccer-loving sons Joel and Avi.

1980: Fought his five sisters through the courts over the contents of his mother, Hannah’s, will.

1984: First attempted takeover bid. Tries to purchase the bankrupt US Conrail system for $7.6 billion but failed.

1988: Unsuccessful attempt to buy company that manufactures Formica table and workshop materials.

1989: Fails in his bid to buy motorcycle company Harley-Davidson.

1995: Bought Tampa Bay Buccaneers NFL gridiron franchise for $192 million. Sacks coach Sam Wyche at end of regular season.

2003: Spends a record $8 million to lure coach Jon Gruden from the Oakland Raiders. Gamble is rewarded in months as Bucs win Superbowl. Starts to build up his stake in Manchester United. Fails in bid to buy Los Angeles Dodgers baseball team.

2004:

October: Increases his stake in United to 28.11% through a series of major purchases.

November: After having an initial approach rebuffed by United chief executive David Gill, uses his sizeable shareholding to vote Maurice Watkins, Philip Yea and Andy Anson off the Old Trafford board. Bankers JP Morgan and PR advisers Brunswick immediately withdraw their support.

December: Puts United back into an Offer Period after approaching the club with ‘potential revisions’ to his bid.

2005:

February 6: Approaches United with ‘detailed proposals that could lead to a formal offer’.

February 11: Granted ‘limited’ due diligence to United’s accounts but proposals described as ‘aggressive’ and ‘potentially damaging’ to the long-term future of the club by United chief executive David Gill.

April 14: Launches formal £800m bid to take over United. Presents a new set of proposals later the same day.

April 28: The board of Manchester United revealed they could not recommend Malcolm Glazer’s takeover proposals to shareholders.