Wednesday, October 20, 2010

Rooney soap opera - the tip of the iceberg for a Manchester United malaise?

After watching, and enjoying some schandenfreude, the Liverpool saga, I can only look to the Reds' historical rival - Manchester United - as a potential for a similar fall from grace. The Liverpool saga boils down to simple greed - Hicks and Gillett thought they could make a quick buck off a historical sports franchise. They purchased the club through heavy leverage and when the economy tanked and they could not service the debt they had to sell. They did not purchase the club because they were life long fans of the Reds or of who knows what John Henry and his NESV group will do with Liverpool, but if what they have done with the Red Sox is any indication, they understand that the product on the pitch is what makes the value of the asset rise, not playing some financial shell games to make a buck. So how does this relate to Manchester United?

Happier days for SAF and Rooney
The Red Devils are in a very similar situation. They were purchased by the Glazers, another North American based ownership that acquired the asset not because of love of the game or the history of Manchester United, but because they identified what they thought was a good asset they could acquire...again via debt, and then leverage to line their own pockets but also keep the value high enough that when the need arose could be sold at a reasonable price - see profit. This financial structure has started to take its toll on the club. The sales of Ronaldo and Tevez over the past 2 seasons were the first signs that the financial burden the Glazer's have placed on the club were starting to take their tolls on the club. The latest from the Rooney saga only reinforces this brutal financial reality.  Why did Rooney not resign with Manchester United? Because he wants a big pay bump? Maybe. Because he wants out of Manchester United to escape the spotlights of the English tabloids? Um no where on this planet can get you away from that light...the reality it I think he has seen his mates like Ronaldo and Tevez leave with no one coming back in return. Rooney might need some lessons in maturity off the pitch, but his competitive desire and motivation to win on it cannot be questioned. Clearly he doubts the club's ability to compete in the transfer market and by extension on the why should he look to stay?

Bottom line - the debt and business aspects of the club have started to catch up with Manchester United. Whether or not SAF or the Glazers want to admit it, the club no longer can look to go out and acquire top talent. Couple this with their city neighbors and their new bottomless pit of money as well as the Russian billions that are still in Stamford Bridge and one could envisage a similar situation that struck Liverpool happening at Old Trafford. Could SAF be close behind to Rooney?

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