Greg Dyke on Broadcasting

Glazer is not on the ball if he relies on television to finance Man Utd

So, Malcolm Glazer, the American businessman and multi-millionaire, has finally come clean and told the Board of Manchester United how much he is prepared to pay for the club and the details of his bid. Having had his accountants and lawyers crawling all over the numbers supplied by the club for the past couple of months, he's obviously decided that he can pay £3 a share (valuing the club at £800m) and still make money. But that has inevitably meant him taking an upbeat view on how much money United is going to get from television in the years ahead and I'm surprised he's so optimistic.

So, Malcolm Glazer, the American businessman and multi-millionaire, has finally come clean and told the Board of Manchester United how much he is prepared to pay for the club and the details of his bid. Having had his accountants and lawyers crawling all over the numbers supplied by the club for the past couple of months, he's obviously decided that he can pay £3 a share (valuing the club at £800m) and still make money. But that has inevitably meant him taking an upbeat view on how much money United is going to get from television in the years ahead and I'm surprised he's so optimistic.

Now, I should declare an interest. I am a United fan and a former United director, who was bitterly opposed to the last attempted takeover of United by Rupert Murdoch's BSkyB in 1998 and who has even more doubts about the Glazer bid.

Glazer, who has already bought nearly 30 per cent of United on the open market, wants to buy the club by borrowing an enormous amount of money. The current United board and an active group of fans who are also shareholders are, to say the least, very suspicious about this.

Even if he's only borrowing £300m to finance his bid - and there are suggestions that it might be considerably more than that - their fear is that if the club has a bad run on the pitch, the finances of the club won't be able to afford the interest cost on that amount, let alone repay the loan. This is exactly what happened to Leeds United, who borrowed far less than Glazer is planning to borrow and then couldn't pay the banks. Instead, they sold the club's best players and were relegated.

Television income is clearly important in Glazer's calculations. During the past decade or so, television, in the shape of BSkyB, has largely financed the incredible growth of football in Britain and particularly the growth in players' wages. But a close look at the recently published United accounts show its media income, which is mostly generated by television, was down by £9m for the first half of the financial year. This led to the club's half-year profits being halved.

This might well be the first true sign that the television bubble has burst for football and that television income in the future might not be the wonderful cash cow for the top Premiership clubs that it once was. United received £8m less from the Premiership, largely because so many more games are now being televised, with the Premiership receiving the same amount of money from Sky. As a result, the money is being spread around more clubs and the likes of United have suffered as a result. In the next year, negotiations begin on the next Premiership contract and this time the European Commission are insisting that Sky cannot buy all four Premiership games televised each week. This could further reduce the amount paid for the football rights as Sky has, to date, paid extra to get exclusivity. Why would they pay that when they will have to share the rights in the future?

But for United, the problem with television income isn't only that the Premiership isn't paying them so much, it's that it's got the same difficulty with the European Champions League. United's television income from the European tournament was also well down on last year, partly because they were knocked out of the competition early on, but also because broadcasters are paying less for the rights.

Now, things could get worse. Television ratings for Champions League football are struggling right across Europe, and have been declining steadily over recent years in Britain. This could well mean broadcasters paying less for the rights when the contracts come up for renewal. Last time around, the BBC bid for the UK rights and failed - they were sold to ITV and Sky. The BBC spent its money buying the FA Cup and the English internationals instead. So the next time around, it's unlikely they will be bidding, which means there will be less competition.

So what's all this to do with Glazer? Well, if his bid for United is overwhelmingly based on borrowed money, as everyone believes it is, his chances of being able to pay the interest will depend on the income United receives from television, and this could be reduced further in the future. Of course, Glazer might have some clever plan to double the television money United receives, but it's difficult to see how he could do this.

Football's a funny old business

The interesting thing about football is that even the most serious of business people lose all logic when they get involved. I was explaining the dangers of the Glazer bid at a CBI dinner in Manchester last week. With a room evenly divided between United and City fans, there was jubilation amongst the City fans when I said Man U could become the next Leeds United.

When my speech was reported, I got an e-mail from Howard Davies, the director of the London School of Economics, hoping that Man U did go the same way as Leeds. Now, Howard is a serious bloke whose done some serious jobs, but when it comes to football, he's a Man City fanatic and hates United with an irrational passion.

My favourite story of the rivalry in Manchester came from television producer Colin Shindler, another City fanatic, who wrote the book Manchester United Ruined My Life. In the book, he explains how as a young boy, he was crying because City had lost again. His mother walked in and tried to sympathise. She told him: "Why don't you support United like your brother and then you can be happy."

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Junior / Graduate Application Support Engineer

£26000 per annum: Ashdown Group: A highly successful international media organ...

ERP Business/ Implementation Analyst

£40000 - £45000 per annum + competitive: Progressive Recruitment: This is an e...

Software Developer / Software Engineer

£Neg. (DOE) + Excellent Benefits: Guru Careers: Combining a passion for Softwa...

Lead Software Developer / Senior Software Developer / Technical Architect

£Neg. (DOE) + Excellent Benefits: Guru Careers: Lead Software Developer / Seni...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried