The Mag
·11 July 2024
Not another article about Manchester United I hear you say…
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The Mag
·11 July 2024
I can hear it now, “Not another article about Manchester United – this is supposed to be a Newcastle United forum!”
However, not only would I consider it relevant because of the unsavoury dealings we’ve had with them recently, but I think it flags up a very serious warning for our own club, as it develops under it’s new, ambitious and rich ownership.
“How did we drop to this mediocre level?”
This was a question posed by a Manchester United fan and included in the Mag’s traditional pre-match feature of opposition fans’ comments before their match against us last season.
I thought it fitted in very well with a couple of excellent articles which appeared on the Mag around that time highlighting the decline in fortunes of the “other United”
It immediately brought to mind a fascinating article that Spanish Mag put me on to via the comments section and which that specific Manchester United fan may find most illuminating. The article was from February 2024 and was by Grace Robertson (who has her own site called Grace on Football). It was intriguingly entitled “The Enshi*ification of Manchester United”.
The obvious problem here is that the key word of the title and the whole focus of the article includes a word banned by Disqus, I will henceforth refer to it as “the Process”.
“The Process” is the pattern of decreasing quality observed in online services and products such as Amazon, Facebook and Netflix. Canadian writer Cory Doctorow coined the term in a Wired magazine article and it stirred up sufficient interest for the American Dialect Society to select it as its 2023 Word of the Year. Grace then applies it to Manchester United’s development under their current owners.
Grace points out that Sir Jim Ratcliffe’s partial buy-out of the club is widely regarded as a “fixer-upper” rather than any long-term plan by the owners to put everything right. During the Glazers’ tenure, the club seems to have declined in almost every area of operation, whether you look at the first-team squad, the state of their stadium (highlighted recently by the development of England’s 4th highest waterfall tumbling from a hole in the roof!) or even commercial revenue – after heading the Deloitte Money List every year from 1997 to 2004, they now find themselves in 5th position.
Grace’s take on this decline is that it hasn’t bothered the owners because everything in their long-term planning is running smoothly – “The Process” is ticking along nicely.
Doctorow defines “The Process” as consisting of four stages.
Stage 1 is characterised by the owners being good to their customers and providing a quality product at excellent market value. This was the case when they bought the club. Under Alex Ferguson, no matter how he may be regarded personally on The Mag, the customers (fans) were presented with footballing excellence with the team winning trophy after trophy and amassing millions of new fans worldwide. It was a revenue factory and the prime football business to acquire at that time.
Controversially, the Glazers financed the deal with a leveraged buy-out. In other words they borrowed heavily to enable it to happen but transferred that debt to the club itself. One of the first results of this change of direction was the loss of the shirt sponsor, Vodafone. Far from disappointing the Glazers, this opened up vast opportunities for new deals and increased revenue with what, based on their NFL know-how, they viewed as more appropriate sponsors for a worldwide market.
The fans were now committed to the club in huge numbers, Ferguson was making all the football decisions and everything was looking good from the fans’ perspective. It wasn’t until the joint retirement of Sir Alec Ferguson and Chief Exec David Gill that “The Process” started to move into Stage 2.
Stage 2 is where the enterprise begins to “abuse their customers” to make things better for their business clients. The customers are “locked in” so there’s no need to worry about them and so the focus can change to developing highly lucrative advertising and marketing revenue. Players like Radamel Falcao, Zlatan Ibrahimović, Paul Pogba, Alexis Sánchez, Cristiano Ronaldo came and went (some more than once). Undoubtedly, good footballers were signed (no one was actively trying to make things worse) but the team began to decline and there were increasing rumours of discord behind the scenes
Manchester United was still making money but not winning as much as the fans were used to. The decision makers were choosing players for their marketing potential over and above their prospects of helping the team to win titles.
Stage 3 of “The Process” is where the enterprise begins to abuse their business clients by clawing back all of the value for their investors – ie themselves in the case of Manchester United and the Glazers.
The club began paying out shareholder dividends in 2016. As the Glazers owned 69% of the club it was a simple matter to determine where most of that money went. They have been the only Premier League club to regularly pay out dividends, averaging £22m – £23m per season from 2016-22. That’s on top of another £20m or so on interest payments each year to service the debt taken on in order to acquire their “cash cow” in the first place.
During this same period, their commercial revenue grew more slowly than any of their main rivals but, as they moved into Stage 3 of the Process that wasn’t the point. The point was the club’s principal concern was now neither sporting success nor commercial growth. It was acting as a bank for the Glazers.
They wouldn’t have got away with this approach in the NFL where clubs are franchises which can be awarded but also taken away. In European football each club is the property of its owners. This clearly explained by Joe Ravitch, founder and partner at The Raine Group, the investment bank that brokers major sales of European teams – including the 25% sale of Manchester United shares to the aptly named Jim Ratcliffe recently.
“You can be a jerk and there’s nothing they can do because you own your IP, you own your club. And you can do as much as you want with it outside of playing the league games.”
Is Ratcliffe there to “Make United Great Again”? He has a legally binding agreement that the Glazers will not pay any more dividends for three years but with the multi-billion pound payout that they received, that’s hardly penury for them. Presumably. If the financial climate is sufficiently favourable in three years time they can sell another chunk of the club and continue to chug along quite contentedly.
Can the Process be stopped and reversed before Stage 4, “Death”, is reached?
In my opinion, it shouldn’t be difficult to improve things by signing the “right” players for the progress of the team (coupled with changes to the coaching and management team) as opposed to the marketing image of the club, but that process is actually fraught with potential problems. Bringing in younger and hungrier players would be easy enough but how do you shift ageing players with massive egos who are on even more massive wages? Not so simple.
The fact that they didn’t bite the bullet and call a taxi for Erik ten Hag and fought tooth and nail to lower the price for Dan Ashworth is very revealing. When you couple that with the swathes of job cuts the tax dodging Jim Ratcliffe is initiating, it’s quite clear that money, outside of the Glazer family anyway, is very tight and it’s hard to see them becoming the world’s number one club again at any time in the foreseeable future.
As Grace herself concludes,
“The Glazers sucked the life out of Old Trafford. That was the point.”
The parallels with our own club’s decline during the Ashley years are there, in that he did indeed suck the life out of Newcastle United.
However, he seemed to miss out Stage 1 completely and he was the focus of attention after that in Stages 2 and 3 – Sports Direct being the primary business client and “Kind Mike” seemingly the recipient of all benefits.
The club was demonstrably heading into Stage 4 as shown by the fact that he had to give away 10,000 free season tickets to keep posteriors on seats at SJP.