While bloggers and the MSM are gobbling up the red herrings served by the deep throats at GM, some people are connecting the dots. They even drew a map. If you are concerned about U.S. taxpayer’s money leaving for Old Blighty, you want to read on. Don’t do it on an empty stomach. Or maybe do. You will want to puke.
Relationship mapping site Muckety connected the dots and revealed that it is not the first time that the British soccer club Manchester United is at the receiving end of American tax payer money. “While the federal bailout may or may not have saved the American auto industry, it’s doing wonders for English football,” says Muckety. “Before its collapse, American International Group also had a marketing deal with Manchester. The insurance giant would later be propped up by $182 billion in federal aid.”
Even the usually staid Marketwatch can’t hold the snark down and says: “One of England’s most popular soccer teams appears to have a soft spot — right in the center of its jerseys — for the U.S. taxpayer.”
Does it hurt to see hundreds of millions of sponsor money desert the All-American sport of football and go to an obscure sport and a country which had burned the nation’s capital down? Don’t worry, the money will come right back.
The owner of Manchester United is Floridian Malcolm Glazer. He bought the British club for £790 million. But, says the London Telegraph, “instead of paying with cash, or with a small and manageable amount of debt, the Glazers slammed a massive mortgage on Manchester United and leveraged it to the hilt.”
You may puke now, because it is getting worse.
In a filing to the SEC, it was disclosed that “six lineal descendants of Malcolm Glazer” used the soccer club as an ATM. £10 million (nearly $16 million) were loaned to Glazer’s children “for general personal purposes.” That in addition to £13.2 million (nearly $21 million) in management fees paid from 2009 – 2011 to Glazer-owned holding company Red Football LLC. But fear not, the loans were paid back “in connection with the £10.0 million dividend distributed to our principal shareholder on April 25, 2012,” as the SEC document states. So there is a company that is nearly suffocating under a £423 million ($664 million) debt pile, and the company can afford a dividend payment that just happens to be big enough to wipe out the Glazer children’s debt.
Chronicling all the financial shenanigans surrounding the club that will be synonymous with Chevrolet for seven years is beyond the scope of this car site. Reuters did a better job anyway. If you want the British perspective of the shenanigans, read the Guardian. Once you have read the stories, you will be astounded that GM would approach the soccer club with anything shorter than the proverbial 10 foot pole.
Done puking? Ok, there is more.
To reduce the mountain of debt, Glazer is taking the company public. The IPO is planned for the end of the year, but it doesn’t seem to be going too well. It probably crosses your mind now that a $600 million sponsorship deal, big enough to wipe out the club’s debt, could be somehow beneficial for the IPO? You are not alone with that thought. Still snarky, Marketwatch writes:
“Securing long-term sponsorship is doubtless helpful to reassuring payroll concerns. And who knows? Europe may prove a more receptive market for all those Chevy Volts than the U.S. has so far.”
The thought may also cross you mind that Malcolm Glazer could be a donor to certain political parties, and that there is some roundabout deal going on. We did the checking for you. Public records identify Malcolm Glazer, his lineal descendants and people surnamed Glazer as generous donors to worthy political causes, (such as $20,000 to the DNC Service Corp.). The money was spread to both sides of the aisle, the donkey side received the jumbo share though.
P.S.: I lied when I said the money would come right back to America. Like any patriot who wants to save taxes, Glazer registered the soon public Manchester United company in the Cayman Islands.
P.P.S: In a press release, GM makes Ewanick-successor Alana Batey say the lines which probably were written for Ewanick:
“We are extremely proud to connect our brand, Chevrolet, with Manchester United and its passionate supporters all around the world. Manchester United’s statistics are impressive, but this relationship goes far beyond the numbers – this relationship is about connecting our brand with the deep-seated emotion that surrounds the team everywhere it goes.”
Indeed, the fit is perfect.