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|  | OCTOBER 7, 2004
By Laura Cohn Kicking and Screaming Over ManU Fans of the world's most storied football club pledge a fierce fight to stop an American sports tycoon's possible takeover bid The way the fans see it, the soccer team Manchester United (MNU.L ) simply isn't for sale. Supporters of the world's most lucrative sports franchise are vowing to prevent a possible takeover by U.S. sports tycoon Malcolm Glazer with protests, their seemingly ubiquitous "Not for Sale" banners, and a push to encourage fans to snap up any shares that might be for sale. Anyone visiting Britain over the past week couldn't help but notice the impassioned cries. Oliver Houston, vice-chairman of Shareholders United, a ManU fan group, insists that if Glazer gains control, "he is going to sit in his ivory tower and cream off the profits." A Glazer spokesman didn't return calls seeking comment. But Glazer, who owns about 19% of the team that has been valued at $1.2 billion, might have other plans. While he has yet to make his intentions public, let alone offer a formal bid, sports-marketing experts say Glazer could offer ManU something the team desires: a bigger global presence. Glazer, who bought the downtrodden Tampa Bay Buccaneers National Football League team in 1995 and transformed it into a Super Bowl Champion in 2003, has been gradually buying shares in ManU over the past year and a half. His goal, says John Bevilaqua, president of Sequiam Sports, an Atlanta sports-consulting firm, could be "to export Manchester United to lots of other countries." A BLOCKED GOAL? The best way to do that: TV rights. Currently, the Premier League in London negotiates TV rights on behalf of its members, including ManU. In practice, this means teams can't negotiate their own deals. But according to Allyson Stewart-Allen, a director at International Marketing Partners Ltd., a global-consulting firm in London, Glazer might be able to work out separate agreements for ManU, in a bid to boost revenues. "People aren't giving him the credit he deserves on the marketing side," given what he has done with the Buccaneers, she says. Of course, Glazer faces a number of hurdles if he wants to gain control of the team. Expanding its brand internationally is no easy task. ManU's crack marketing executives have already managed to make progress in some markets. In China fans can watch games on TV as well as monitor its Mandarin Web site, which the team says hosts 1.2 million unique viewers a month. In addition, ManU is working on ways to win over American sports fans. It hosts U.S. tours in the summer. It has also set up a merchandising partnership with the New York Yankees. UNDER SCRUTINY. Another tricky issue for Glazer: winning over the team's biggest shareholders, horse-racing tycoons John Magnier and J.P. McManus. The reclusive Irishmen, who own 29% of the club, would have to agree to sell their shares to relinquish control to Glazer. Analysts in the City of London say Magnier and McManus, known as savvy investors, would command a premium for their shares, currently worth about $348 million. But sources say Glazer has yet to approach Magnier and McManus, which suggests his potential bid for the team is still early stage. Then there's the problem with U.S. regulators. As BusinessWeek reported in March, two companies Glazer and his family controls have come under scrutiny from the Securities & Exchange Commission for mysterious bids that drove up their share prices, just as Glazer was accumulating ManU stock. The firms are Zapata (ZAP ), a holding company, and fish-oil concern Omega Protein OME ), 60% of which is owned by Zapata. The offer for Zapata came from an investor, Theodore Roxford, who told BusinessWeek he "might have been" working for Malcolm Glazer. Avram A. Glazer, Zapata's chairman and chief executive and Malcolm Glazer's son, said Roxford's claim was absurd (see BW Online, 3/15/04, "A Sports Mogul and a Mystery"). LOTS OF NOISE. Finally, to take over the team, Glazer needs to find financing. One possibility would be to securitize the income ManU will get in the future from TV rights and corporate sponsors. The move, which city analysts say is feasible, would be particularly irksome to the fans, who take pride in the fact that ManU is currently debt-free. Altogether, ManU's fans currently own 18% of the team. As things move ahead, the fans are likely to make lots of noise, but not get much say in the end. That doesn't mean Glazer will win this fight. He has plenty to overcome before he can declare victory if what he wants is control of this winning team.  Cohn is a correspondent in BusinessWeek's London bureau Edited by Beth Belton
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