• Wednesday, 4 July 2012

    They Cayman saw and (divided and) conquered

    There's a contingent in the north-west of England and a far smaller one on Fleet Street that could be forgiven for saying "I told you so" a hell of a lot today.

    Manchester United's plan to relieve the burden of debt on the club - debt imposed solely by the current owners - is to register the company in the Cayman Islands, retaining what they describe as an 'executive office' in Manchester, and float on the New York stock exchange. The prospectus for the share issue mentions the word 'indebtedness' 43 times, making plain the reasons for this move.

    The Glazer takeover was incredibly controversial. The family borrowed over half a billion pounds in order to buy the club then loaded the responsibility for paying that back onto the club itself, a move which has never seemed right even if it is allowed. Debt repayments and interest has taken another half-billion away from the club in the intervening period, yet the total debt still stands at over £400m. This is far away from the club that existed prior to the takeover, yet those supporters who did voice a concern at the time saying United was "not for sale" were wrong. Having sought to gain all the benefits from launching as a plc back in the day, they were up for sale from that point. However, under the plc, it remained a Manchester club. That will no longer be the case.

    It sounds a trivial point when figures like half a billion here and 400 million there are being thrown about, but almost every football club started because of the desires of a community. At the top end more than any other, that community link has been eroded to the point of non-existence as clubs demanded a greater share of TV monies, became more business oriented and started describing fans as 'customers'. As TV money goes up, commercial revenues go up and the gate money each week becomes less important to the business, so the fan paying their money on the gate becomes less important. But the link to the community remained, however much it was watered down with plcs, foreign ownership and leveraged buy-outs. Now, United plan to remove any last vestige of that.

    If the powers that be wish to do something symbolic to maintain a level of association and accountability, a simple demand that memeber clubs are registered, affiliated and pay tax in the same jurisdiction is a very simple thing to do. Even clubs owned by murky offshore owners - like Leeds United, for a random example - are entities incorporated within their governing FA's realm. If Manchester United want to move to the Cayman Islands, so be it. It was a competitive league season out there, with Elite and Scholars International going in to the final round of games level on points. But where Elite could only draw with George Town, Scholars - who play out of the 2500-capacity Ed Bush Stadium in West Bay - beat lowly Future 3-0 to take the title. It may skew the competitive balance of the Cayman Premier League, but if they're a Cayman club, then they must fall under the Cayman FA's auspices.

    Moreover, while the FA and Premier League in England have been happy to see the game develop to the point we reach now, it falls increasingly to HMRC and notable journalists - Matt Scott and David Conn, for two examples - and bloggers - Swiss Ramble being particularly prominent - to scratch away at the surface of the corporate world of the game. Hiding the entire operation in the Caymans avoids all that scrutiny is not a good thing in any way. Sadly, the initial Glazer takeover did a fine job of divide and conquer among the support, so whether this causes a major stir will be interesting to observe.

    Shifting a club, as opposed to a holding company or an individual owner, offshore ought to stir the FA into action. But as we've seen throughout the last 20 years or so, they're as rapacious in their capitalism as anyone, so expect this to be waved through with barely a murmur.

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