March 14 (Bloomberg) -- Things are going pretty well for Manchester United right now. Sure, the team was knocked out of the UEFA Champions League last week, but it has a comfortable lead in England’s Premier League heading into this season’s final weeks. The club is also still in the running for the third leg of English soccer’s triple crown, the FA Cup.
In the hypercompetitive world of European soccer, winning one title is huge. Winning two is almost unheard of.
Not that any of this is going to placate United’s English fans. They insist that Man U’s majority owners, the Glazer family of Palm Beach, Florida, are greedy Yankees -- unfit custodians for their storied club, which was founded by a British railway company in 1878.
Here’s a thought: Instead of complaining about their team’s ownership, maybe United’s English fans should start enjoying their team’s success.
Simply by buying a majority stake in Man U in 2005, the Glazers took a big step toward securing the club’s uncertain future. At the time, United’s Irish owners were on the brink of firing its longtime manager, Sir Alex Ferguson, over a dispute about the ownership of a prizewinning horse.
What sort of thanks did the Glazers get for keeping Ferguson, not to mention loading the club with high-priced talent from around the world? They have been called financial parasites, vandals and strip-miners. More specifically, United’s supporters accuse the Glazers of taking on too much debt and pocketing too much of the team’s profits.
That Man U’s supporters are focused on their club’s balance sheet might sound strange to U.S. sports fans. But it’s surprisingly easy to leverage yourself into bankruptcy in the Premier League, which doesn’t cap salaries. Your most talented players are always in danger of being lured to Spain, Germany, Italy or other countries with deep-pocketed soccer clubs.
Is Manchester United courting bankruptcy? No. It isn’t Leeds United, a three-time English champion that went bust and was relegated to the third tier of English soccer. At a market capitalization of about $2.7 billion, Man U is the world’s most valuable sports franchise by a comfortable margin, and it’s only just beginning to see the effects of its push into international markets, including Asia. Its lucrative sponsorship deals -- it will get $559 million over seven years to put “Chevrolet” on its jerseys starting in 2014 -- and global TV revenues make the Dallas Cowboys look like a cute regional business.
It’s true that the Glazers, who also own the National Football League’s Tampa Bay Buccaneers, borrowed some $800 million from hedge funds to buy the club. And the club is still carrying a staggering amount of debt. But in the context of its even more staggering growth, there’s no reason to engage in what Paul Krugman might call “fiscal fear-mongering.”
United’s finances are actually improving, which is reflected in its stock performance: The Glazers sold 10 percent of the company to the public in August at $14 per share, and its current share price is $16 and change -- a pretty good return over seven months.
Then there’s the team’s on-the-field performance. Since the Glazers bought Man U, it has earned four Premier League titles and reached the finals of the Champions League three times, winning it once. These are remarkable results, especially in a sport in which the better team often loses.
There are also intriguing rumors circulating about United’s future. After losing to Real Madrid, the world’s second-biggest sports franchise, following a controversial red card in last week’s Champions League match, Madrid’s manager, Jose Mourinho, told reporters Man U was the better team -- fueling speculation that he might be in line to succeed the 71-year-old Ferguson as early as next year. Reading even further between the lines, Cristiano Ronaldo, who used to play for Man U, conspicuously opted not to celebrate after scoring for Real Madrid during the game. A sign that he may follow Mourinho to United?
As for the Glazers, they’re doing pretty well, too, helping themselves to half of the $233 million that Man U raised in last summer’s IPO. (The rest was used to reduce the club’s debt.) Does this make them rapacious Yankees? Maybe. But wouldn’t a better question be: As long as the team keeps winning, why should fans care what its owners do with the club’s money?
If Man U’s supporters are really so unhappy, they can do what any dissatisfied customer does: Stop buying the product. For United’s hometown supporters, that’s an admittedly complicated proposition. They could stop showing up at Old Trafford, but even considering their antipathy toward the Glazers, that seems masochistic. They could boycott Red Devil merchandise, but with every jersey the club sells in China, it grows further insulated from the wrath of its English fans.
Of course, those jerseys only sell if the club is successful. And isn’t that what every fan wants?
(Jonathan Mahler is a sports columnist for Bloomberg View. He is the author of the best-selling “Ladies and Gentlemen, the Bronx Is Burning” and “Death Comes to Happy Valley.” The opinions expressed are his own.)
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