Wednesday, 14th November, 2012

Manchester United owner Malcolm Glazer tried to hide the state of the club’s finances before their initial public offering (IPO) in August, according to respected financial group Bloomberg.

The Red Devils raised $233M selling shares, but what was not clear at the time was Manchester United’s behind-the-scenes efforts to keep from disclosing more transparent earnings information, details about Glazer’s debt and what the IPO money was to be used for.



Letters between the United States’ Securities Exchange Commission (SEC) show that seven Glazer family members have kept almost complete control of Manchester United, placing higher taxes on the club to evade potential shareholder lawsuits by incorporating abroad.

A back and forth approach between Manchester United and the SEC is usually the case when the SEC are dissatisfied with an initial IPO prospectus that they believe does not properly warn investors of the risks of buying new shares.

A similar process was gone through between the SEC and Facebook, who were also forced to disclose information in its IPOs.

After a review, the SEC forced Glazer to show that Manchester United hid losses with a one-time tax credit and the £80M sale of Cristiano Ronaldo.

The SEC also forced Manchester United to reveal that Glazer had repaid £10M borrowed from the club by taking the same amount out of the club as a dividend paid to him.

relatedNewsStoryThe Glazers took $110M of Manchester United’s IPO cash, according to a 25th October filing. Before the IPO, Glazer family members and affiliates earned £16M in consulting fees for 2009 and 2011, while also taking the £10M out in 2008 at 5.5% interest.

Bloomberg report analysts expect around another 2p per share of losses when Manchester United report their latest results today.

Manchester United’s revenue slipped to £320M in the year ended 30th June, from £331M a year earlier.

Sponsors are continuing to pay high amounts to be associated with the Red Devils however.

Nike contributed £33.8M of the club’s revenue in the 2012 fiscal figures, while General Motors will pay $70M or more per season to put Chevrolet on the team’s shirts starting from 2014.

Full Story: Bloomberg.

Checked out Inside Bet yet? Betting tips, information and previews to help you choose the best bet!