Malcolm In The Middle

The word spread quickly through the London Stock Exchange last Thursday: The American is back. Tampa Bay Buccaneers owner Malcolm Glazer had again raised his stake in Manchester United, the world's most valuable sports franchise, setting off a new round of speculation: Is the secretive Glazer planning a full takeover of Man United? If not, what exactly is he up to?

Glazer's purchase increased his holding in Man U from 18.3% to 19.2%, second only to the 28.9% owned by horse-racing magnates John Magnier and J.P. McManus. But while those two Irishmen have stopped short of the 30% that would require them under market rules to make a cash offer to all other shareholders at the highest price paid in the previous 12 months, observers wonder if Glazer might go all the way. Asked his intentions last winter by British regulators, Glazer (who declined SI's interview request) released a vague statement saying he had "no current intention" of taking full control. That hardly precludes an eventual bid, one that Man U insiders say would be driven by Malcolm's son Joel, a Bucs executive vice president.

Glazer's foray into the NFL has worked out splendidly by any measure. Since buying the lowly Bucs in 1995 for a then league-record $192 million, Glazer has persuaded Tampa voters to finance the $169 million construction of Raymond James Stadium, guided the team to a Super Bowl win (in 2003) and hiked the value of his investment to an estimated $671 million. But can Glazer afford to own Man U? By Monday, United's stock price had risen a modest 2.4% since his latest buy, giving the club a market capitalization of $1.2 billion. (The most valuable U.S. sports franchise is the privately owned Washington Redskins, worth an estimated $952 million.) Glazer would likely have to bid on the rest of the Man U shares at a premium—say, $1.6 billion—and NFL rules prevent his using the Bucs as collateral. Last year Forbes put Glazier's net worth at $1 billion, which would leave him only $329 million for the purchase. That has led to speculation that an investing partner might enter the picture.

Analysts are divided over whether Man U is a good investment. "There's enormous profit to be made, not only now but in the future as soccer takes more of a hold in the U.S.," says Dean Bonham, a Denver-based sports industry analyst. Not so fast, says Andrew Lee of Dresdner Bank in London. "It's not obvious where you would extract more value at the moment," he says, citing the current weakness of the dollar against the British pound, Man U's stagnant short-term TV revenues and doubts that soccer will take hold Stateside. Bulls counter that the market in China is a potential gold mine for Man U and that the team, despite middling results on the field last season, announced a 32% increase in first-half profits on March 30.

As might be expected, the prospect of an American owner with little connection to the club's 126-year history hasn't sat well with United's diehard fans. Membership in Shareholders United, which urges supporters to buy Man U stock, has risen to 10,000 in the past year—a 517% increase. "Every share we have helps build a wall to stop these people," says SU vice chair Sean Bones, a 44-year-old Manchester factory worker. By year's end the group hopes to have 100,000 members buying $1.8 million of Man U stock per month through its website (www.shareholdersunited.org). It couldn't stop a takeover, but it would send a message to Glazer, one that SU members will display on leaflets during United's upcoming U.S. tour: NOT FOR SALE.