There's a Ticking Time Bomb That Binds the Tampa Bay Buccaneers
"Buccaneer fans should pay attention to Manchester United because they're helping to pay for it....."
Steve Duemig, 620 WDAE Tampa, The Sports Animal
There is an ocean that separates the Tampa Bay Buccaneers of the National Football League from Manchester United of the Premier League.
There is also an ocean that binds the two sports franchises.
The Atlantic Ocean separates them.
The ocean of debt that encumbers Manchester United ties them together.
The common denominator is the Glazer Family, owners of both entities.
Malcolm Glazer hit a home run when he bought the Buccaneers following the death of Huge Culverhouse for a reported $195 to $199 million.
It was Glazer's first foray into sports ownership. He had tried but failed to buy other sports teams.
Glazer leveraged the city of Tampa into building a new stadium and Raymond James is the home to the Buccaneers today. It saved the franchise for Tampa.
The value of the Bucs has grown steadily for the Glazer family. It has been reported to be worth anywhere from $800 million to $900 million, although the global recession has reduced the values of all these teams, NFL teams, soccer clubs, all teams.
Which brings us to Manchester United.
Glazer set his eye on sports' most valuable franchise back in 2005-2006. It was a publicly-traded entity back then and Malcolm started buying the stock. He eventually got his hands on enough to take over the club in a HUGE leveraged buyout.
The exact amounts and details of that 2006 purchase vary a bit.
David Conn at www.guardian.co.uk reports these facts:
Purchase price for Manchester United was $1.367 billion.
The buyers paid $447 million in cash.
The buyers financed $467 million though J.P. Morgan, which in turn, brought other financial institutions to share the debt.
The buyers obtained another $452.65 million from three U.S. hedge funds—Citadel, Och-Ziff and Perry Capital. Those funds come at high interest rates, anywhere from 14.5 percent to 20 percent.
Of all that debt, only $425 million is "senior debt" and secured by Manchester United, its stadium, player contracts and all assets of the club.
There are two entities that were formed when Manchester was purchased: Red Football Join Venture Limited and Red Football Shareholders Ltd.
The Tampa Bay Buccaneers may be stashed in one of those entities.
The Australian AP livenews.com.au reports that as of June 14, the debt on Manchester United is $1.31 billion. The team lost $91 million in 2007-2008 and the Glazers had to make interest payments on the debt to the tune of $139.56 million in 2007-2008.
The BBC online spoke to Harry Philip of the UK-based Hermes Sports Partners and his observations were quick and to the point:
"On a group basis, the debt to the hedge funds is soaking up the profits from the club playing side," said Phililp. "That debt is a ticking time bomb that they have to pay off."
The Glazers have been a very quiet group since the day they bought the Buccaneers and have grown even more secretive since they grabbed Man-U.
Under Malcolm's reign, they owned everything from trailer parks and restaurants to strip centers.
Since Malcolm suffered a disabling stroke, sons Avram, Kevin, Bryan, and Joel and daughter Darcie have been in charge.
It was brought to recent light that the Buccaneers have spent less money on players than any NFL for the past five seasons.
The St. Petersburg Times headline summed it up: "Figures indict Glazers' devotion."
For Buccaneer fans, there has been no outspoken concern by most.
But perhaps there should be concern, especially in light of what's happening across the pond.
Manchester United fans have never been enamoured with the Glazers.
One fan wrote recently:
"Manchester United Football Club had a great year financially, as the numbers show. The problem is that the club has been used in an outrageous financial deal which basically required Mancester United's fans to buy the club through hiked-up ticket prices and give it to the Glazer family. It should never been allowed to happen...."
Are the Bucs bound to Manchester United's woes?
Maybe, maybe not.
But when you look at the big picture, there are simply too many coincidences to ignore.
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