David Conn: Forget Glazer, the Edwards family were happy to milk United cash cow

Manchester United fans are revolting again. On Wednesday, before the Champions' League match against Milan, they will march to Old Trafford expressing strongly to the American businessman Malcolm Glazer that he might consider, to put it politely, leaving their club alone.

Manchester United fans are revolting again. On Wednesday, before the Champions' League match against Milan, they will march to Old Trafford expressing strongly to the American businessman Malcolm Glazer that he might consider, to put it politely, leaving their club alone.

Glazer's stubborn refusal to do that, putting his advisers in this week to peer at United's accounts, has scratched again at the puzzle of how it came to this - that all England's football clubs, including our richest and most glory-strewn, dangle for sale to anybody.

The answer can be traced in United's history. And in their transformation, from a club formed as Newton Heath by railway workers in 1878 to today's embattled plc, runs the phenomenal development of sport itself, from something groups of mates did for fun in Victorian England to our multi-billion pound entertainment industry, struggling to locate its soul.

Those Lancashire and Yorkshire Railway workers lost their club back in the seemingly innocent days of 1902. By then in the Football League Second Division, Newton Heath were going bust until they were taken over by a brewer, John Henry Davies, who paid off debts, renamed the club Manchester United and began to sell his beer to the club's captive fans. Later, he invested £60,000 to give United greater capacity at Old Trafford.

From 1907, United were no longer a club but a limited company subject, as all the clubs were, to Football Association rules designed to prevent them becoming mere commercial vehicles for shareholders. Directors could not be paid salaries, dividends were limited, grounds protected.

United won the First Division in 1908 and 1911, but were struggling again in the depressed 1930s when James Gibson, a Manchester clothing manufacturer, settled some debts, issued new shares and began a long, paternalistic chairmanship during which, after the Second World War, he appointed a novice young manager - Matt Busby.

Louis Edwards, "Champagne Louis", the wholesale butcher from Salford, was a United nut, a businessman-fan in United's 1950s heyday, forever wanting to be on the inside. He finally made it when he was appointed a director by a grief-stricken board the day after the Munich air crash in February 1958, in which eight of Busby's side died. For four years he was happy with that. Then, in 1962, he began to gobble up Manchester United shares. In 1965, he became chairman.

Even then, he was happy to run United like many other club chairmen - for the fun and the fame. He developed the long-term plan to cantilever Old Trafford and fans were never overcharged, paying peanuts to watch Busby's third great side, of Best, Law and Charlton, reach the holy grail of European Cup victory in 1968.

It was a decade later, with their meat business in trouble, that the Edwards family began to make money out of Manchester United. They were still restrained by the FA's stipulated limit on dividend payments per share, so their advisor, Professor Roland Smith, devised a fiendishly simple solution: they dramatically increased the number of shares in a famous rights issue opposed by Busby himself, allowing United shareholders to buy 208 shares for every one they owned.

Louis' son, Martin, bought further shares, then borrowed £600,000 to pay for the 208-fold multiplication. United immediately began to pay substantial dividends out, up to £151,284 by 1981. The FA then allowed club directors to be paid, and Martin Edwards became United's full-time chief executive. He was always paid handsomely, rising to £96,000 by the end of the 1980s.

Edwards claimed later he only agreed to the 1991 flotation as a means of raising the £10m which Michael Knighton had promised in his crazy, abortive takeover attempt. However, also listed among the reasons in the club's official prospectus was "increasing liquidity" to shareholders - City-speak for making them cash. The financial returns expected of Stock Market companies were against FA rules, so United, like Tottenham Hotspur before them, bypassed those rules by forming a holding company, Manchester United plc, and floating that. The FA was silent then, as it is silent now.

United's band of long-campaigning fans resent the myth that they accepted the plc, have done well out of it, and are only lately protesting.

"Fans were very concerned about the profit motive behind the flotation," recalled Dr Adam Brown of Manchester Metropolitan University, a United fan who was appointed to the Government's Football Task Force in 1997. "Season ticket prices doubled over two years and a group formed to lobby against it."

Edwards made £6m by selling shares on flotation. United, no longer restricted by the FA's stipulated maximum, declared an 18p dividend, which made Edwards another £608,000, and dividends have increased in most years since.

Professor Smith became the chairman and while Alex Ferguson took United back to Championship-winning times, United plc developed their megastores and superstores and the branding and the prawn sandwich operation which made them the world's richest club while alienating many loyal fans.

In 1995, the Independent Manchester United Supporters Association formed in the Gorse Hill pub in Stretford to campaign against the tide of commercialism and, according to its then chairman, Andy Walsh, ultimately to "roll back the plc".

Edwards sold shares in chunks as the price rose during the 1990s commercial boom. He made £33m in cash even before he agreed to sell to Rupert Murdoch's BSkyB for £623m in 1998, a deal blocked by the Government following a campaign by the IMUSA and another group which became Shareholders United.

In October 1999, Edwards, now on a £639,000 salary package, sold half his remaining shares, making another £40m. In May 2002 he made another £20m by selling most of the rest to Harry Dobson, the Scottish mining businessman. By then, Peter Kenyon was United's chief executive and Edwards a part-time director. Last year he ended his long tenure as an Old Trafford director.

Having fought off BSkyB, protested against the encroaching power of the 29 per cent shareholders, John Magnier and JP McManus, and bitterly battled Glazer, United fans have now summed up their campaign in a simple call: "Not for Sale". The plc's directors have signalled they might actually agree, the chairman Sir Roy Gardner calling for "stability" among shareholders and working with Shareholders United to form a supporters' trust, a long-term aspiration to mutual ownership which will inevitably have to withstand constant takeover attempts as United remain seductive to predators on the Stock Market.

Dr Brown argues that the financial benefits of plc status may be mythical - United raised £6.7m when they originally floated and in December 1996 raised a further £16.6m by placing three million shares with institutional investors, making the total raised from the Stock Market £23.3m. Yet every year since 1991 dividends have increased, until the total paid out has climbed to £61.74m.

"That's nearly £40m gone out which should have been invested," Brown said. "The Government, when it set up the Football Task Force, asked us to consider how to resolve the tension between supporters and shareholders when clubs are plcs.

"The football authorities argued there was no tension and none of our reforms were ever implemented. Now, the Glazer bid is finally screaming out loud that the tension goes to the very heart of football, but nobody is doing anything about it."

Following Wednesday's march, on Friday the IMUSA will celebrate 10 years of tireless campaigning with an event which Ferguson will attend. With their mobiles, e-mails and shrewd, often mischievous use of the internet they are very modern campaigners, but their purpose is rooted in tradition: to restore to Manchester United some of the original spirit of the working class railway men who founded the club.

davidconn@independent.co.uk