So, a new era for Manchester United? Not quite: amid all the hullabaloo about a “restructuring” at the club following Jim Ratcliffe’s purchase of a 25% stake – all that talk of job cuts and belt tightening, squad turnover, comings and goings in the executive suite, meetings between Ratcliffe and Erik Ten Hag, a fresh energy both on and off the pitch – it’s been easy to forget that commercial control of the club remains firmly in the hands of the Glazer family. Manchester United’s corporate structure splits ownership into Class A and Class B shares. Real control of the club lies with the owners of the Class B shares, which are worth 10 times the voting rights of Class A shares. Ratcliffe has spent around $1.6bn for a quarter of the club’s Class A and B shares. But even once the deal is approved, the majority of the Class B holding, along with voting power and control of the board, will remain with the Glazer family. If this is the start of the Glazers’ exit from their investment in Manchester United, it is a curiously sedentary departure.
There’s a kind of brilliance to this move, a form of dirty financial sorcery akin to the creation of the credit default swap. The Glazers’ 18-year ownership of Manchester United has been a calamity for Manchester United, which has degenerated over the past decade from the powerhouse of English football into a mid-table club hanging its hopes of Europa League qualification on a late-career revival from Jonny Evans. But it’s been extremely good business for the Glazers, who’ve repeatedly exploited their ownership to enrich themselves while running operations at a consistent loss and lumping the club with crippling levels of debt. Dividend payments since the Glazers’ 2005 takeover have totaled £166 million; the bulk of them have gone to the Glazers themselves. As part of the new deal Ratcliffe and the Glazers have agreed to a three-year freeze on dividend payments, but in the longer term nothing about Ratcliffe’s investment in the club will disrupt this cash flow or the corporate structure underpinning it: as the club’s 2023 annual report notes, “our board of directors has complete discretion regarding the declaration and payment of dividends, and the holders of our Class B ordinary shares [three-quarters of whom remain members of the Glazer family] will be able to influence our dividend policy”.
Ratcliffe, for his trouble, will plough an additional $300m into the club to help clean up the mess the Glazers have left behind on the pitch. The Glazers blazed a trail for the arrival of serious institutional money from the US in European soccer. Now, it seems, they are innovating all over again, pioneering a kind of non-exiting exit that gives them all the spoils of ownership with none of the accountability. They’ve “sold” the club and shunted responsibility for footballing operations onto Ratcliffe without losing what matters to them most: the income that Manchester United generates for the Glazer family, and the power they have to keep awarding it to themselves. Overall, it’s been a savagely good deal for the Glazers.
Investors are often judged the same way that strikers are: by the quality of their finishing. The return an investment earns – judged by its price at disposal relative to its acquisition price – represents the universal performance benchmark. In recent years the trickle of US capital that followed the Glazers’ takeover of Manchester United (the Kroenkes at Arsenal, Fenway Sports Group at Liverpool) has turned into a veritable torrent: if Miami-based 777 Partners’ acquisition of Everton goes through, exactly half of the teams in the Premier League will be under American control. Institutional money from the US has spread to all the major leagues across Europe: the new minority owner of PSG, for instance, is New York-based private equity firm Arctos Partners.
What exactly does American money want with European football? At the dawn of the US takeover of the Premier League many assumed that the Americans were interested in English clubs for one of two purposes: as vanity projects, or as return-generating financial investments. Vanity seems to have faded as an investment motivation: few of the American club owners attend games or inject themselves into the drama onfield, operational and footballing responsibilities are almost all delegated to experienced professionals, and even a figure like Todd Boehly, who initially seemed so keen to “get amongst it” and run Chelsea as if it were his own personal fantasy football team, has receded from public view. Nor do these investments, however, appear to represent capital in search of a return. The first American buyers have stayed in these clubs for far longer than the usual five-to-10-year life cycle of an institutional investment fund: the Kroenkes have held Arsenal since 2007, FSG has stuck with Liverpool since 2010, and the Glazers are approaching their third decade in Manchester. Everything about these historic investors’ recent behavior – flogging off minority stakes rather than exiting entirely – suggests they intend to remain in control of their clubs indefinitely.
The curiosity of the Glazers’ involvement in Manchester United is that it now appears to be an investment without any meaningful exit horizon – though it’s arguably more indicative of the league’s general direction of corporate travel than a deviation from it. Patience is the watchword of the long-term investor, but the Glazer family’s investment in Manchester United is more parasitic than patient. The club is rarely profitable: it generated pre-tax losses of £33 million in 2023 and £150 million in 2022. What the club does produce, however, is revenue, and a lot of it – a portion of which can always be siphoned off for the Glazers. Manchester United seems of interest to the Glazers primarily for the cash it generates rather than the returns that a full sale might realize.
Economic geographer Brett Christophers has argued that economies in the developed world are now geared towards having things rather than doing or building them. Economic life today is dominated by the rentier, an economic actor that receives payment (rent) “purely by virtue of controlling something valuable”, Christophers has written. Rentier capitalism is proprietorial rather than entrepreneurial, based on the extraction of value rather than its creation. Football clubs are perhaps the perfect asset for the rent-seeking capitalist. In other rent-based markets, like housing and utilities, competition for services mandates a certain speed in the turnover of different investments: consumers have the freedom to take their business elsewhere (tenants, for instance, can move house), which imposes a pressure on asset owners to maximize revenue and exit the investment before the customer base becomes unviable.
Football clubs are very different creatures; though on-field competition is the soul of professional sport, fandom is so visceral, irrational and immovable that it gives every club a monopoly-like security from competition in the commercial realm. Each football club is a scarce – indeed unique – asset, completely impervious to replication. If I am a disgruntled fan of, say, Everton, and want to take my support for the club elsewhere, I have nowhere to go: there’s no rival provider of Everton Football Club services to which I can offer my patronage. The market for Everton fans’ attention and loyalty has only one actor: Everton FC. (Manchester United may be an exception to this rule, but FC United of Manchester, which was formed by fans in 2005 in response to the Glazers’ takeover and now plays in English football’s seventh tier, is hardly in competition with Manchester United: to qualify as a Manchester United fan today you still inevitably have to follow and care about the goings on of Manchester United Football Club.) Fans are perfectly captive customers: loyal by nature, tolerant of failure, and trapped in place by the structural logic of fandom. This makes owning a football club, especially one with a sizable following, a highly attractive investment proposition: even in the face of chronic underperformance on the field, the business’s customer base (or a significant chunk of it, at least) will remain intact.
Under the Glazers, Manchester United has become a paradigmatic business for the new age of rentier capitalism: a commercial property with a huge fan base and chunky revenue streams that neither abject humiliation on the pitch nor ritual failures of player recruitment can do anything to dent. Why would the Glazers ever give this perfect asset up? They’ve already made it clear they don’t want to: through the whole year-long saga of the club’s non-sale “sale”, the most telling moment was the Glazers’ rejection of Sheikh Jassim bin Hamad al-Thani’s all-cash offer to buy the club outright. The club has shown itself to be a reliable cash cow even as matters on the field degenerate into farce, and the Glazers are ensconced: they can sit on the asset and keep squeezing it for as long as they please.
If their experience is any indication – and I believe it is, since they were the first to land in England and so many of the other billionaire American owners in the Premier League come from the same world of institutional finance that the Glazers belong to – the real goal of US investment in European soccer is not to improve the clubs but extract the rents, while doing the bare minimum to ensure indefinite control. This means maximizing revenue while cutting operational costs and avoiding, as much as possible, any capital expenditure.
The years ahead promise more, rather than less, ownership in the style of the Glazers across the Premier League. The Glazer model may not be good for the club, but it makes perfect sense for the owner. Ticket prices will be raised, new broadcast and merchandising deals struck, ever-more ambitious off-season tours planned and undertaken. Fans will be met and listened to, though rarely heeded, and new modes of supporter engagement devised, preferably with tiers of paid “memberships” attached; stadiums will be maintained, but only just, and expanded in nothing but piecemeal fashion. (Only a fool would commit to building a new structure from scratch: much better to tack a new tier of seating onto what’s already there.) Club statements will focus on new digital tokens fans can buy to get closer to the players and “own” a trivial non-proprietary piece of the club rather than the management fees and dividends the owners pay themselves, which will be discreetly inscribed in the financial reports.
The cleverest owners will, like the Glazers, find a useful idiot to do all their dirty work – signing the right players and losing the wrong ones, hiring and firing managers, cutting the jobs that need to be cut – while they continue to rake in the spoils of ownership. But in no circumstances will a full sale ever be seriously considered. The ultimate aim of ownership in global soccer today is to stay an owner. The exit these investors seek is not an exit at all, but a kind of commitment-free lifetime tenure.
• This article was amended on 5 January 2024. An earlier version incorrectly stated that the Class B shares that Sir Jim Ratcliffe purchased would automatically convert to Class A shares.
