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NOT THAT RICH // Team bid requires sacrifice

Published Jun. 20, 2006

If it's true that Malcolm Glazer bid $1.2-billion for the British soccer club Manchester United on Monday, the 76-year-old businessman faces some tough financial choices.

There's little risk Glazer ever will face the repo man or suffer foreclosure on his $11-million Palm Beach estate. Ranked America's 273rd richest person by Forbes, the Rochester, N.Y., native and his family own one of the NFL's most valuable, if underperforming, franchises, the Tampa Bay Buccaneers; a nationwide strip-mall empire; and a majority stake in a publicly traded holding corporation that owns companies that make airbag fabric and fish oil.

But unless he has quietly stashed away $1.2-billion, unbeknownst to the scorekeepers of wealth, finalizing the deal for Manchester United will require the reclusive tycoon to sell one of his key assets, borrow money or find a deep-pocketed partner.

None of these options is ideal. Sharing ownership would mean sharing control, something the Glazers have not had to do at One Buc Place or their commercial real estate company, First Allied Corp. The Glazers control the board of publicly traded Zapata Inc., with four of seven seats, and own 51.9 percent of its shares.

Other than the family's 19.2 percent stake in Manchester United, which it acquired in small bites over the past 18 months, the Glazers' only publicly acknowledged assets that could fetch hundreds of millions of dollars apiece are the Buccaneers and First Allied. The problem is that both generate a substantial amount of cash. Losing them could put a crimp in the family's budget if Manchester United ever became unprofitable.

On Monday, Glazer's son Joel, executive vice president of the Buccaneers, issued a statement reaffirming that the team is not for sale. Kevin Glazer, an executive at First Allied and another of Malcolm's sons, said Tuesday that "at this time, we're generally buyers (of real estate), not sellers."

Taking out loans may be a logical, if imperfect, choice for the Glazers, who have hired J.P. Morgan Chase & Co. to serve as their investment adviser, according to published reports. The First Allied properties presumably could serve as collateral; NFL rules prohibit owners from borrowing against their teams.

There's also a precedent: when the Glazers bought the Buccaneers for $192-million in 1995, they used loans to pay a large part. Reports at the time said the family borrowed between $90-million and $130-million.

After the deal closed, however, critics accused the Glazers of using Zapata Corp. and other family-controlled companies to help pay off Buccaneers-related debts.

One was Houlihan's Restaurant Group's $10-million deal to buy the naming rights to the Buccaneers' stadium. Houlihan's, whose dominant shareholder was Glazer at 73 percent, had 115 locations nationwide but only two in Florida, and neither of those was in the Tampa Bay area.

In 1996, shortly after published reports indicated Glazer was facing deadlines to repay or refinance some of the loans used to acquire the Buccaneers, Zapata agreed to buy Houlihan's for $80-million. Glazer would have received $29-million for his Houlihan's shares, but a judge blocked the deal after a Zapata shareholder sued.

Later that year, in an article titled Is Zapata the Glazers' Toy?, Business Week recounted Zapata's purchase of Glazer's 31 percent stake in Envirodyne Industries Inc., a maker of sausage casings. According to the magazine, Glazer used the $18.8-million to help pay down loans used to buy the Buccaneers. A Zapata shareholder sued, saying the company overpaid; two Zapata directors quit rather than approve the deal.

At the time of the deals, the Glazers vehemently denied using Zapata or any other public companies for their own ends. The family owned 33 percent of Zapata's stock then.

Control of Manchester United, the world's most valuable sports franchise, would elevate the reclusive patriarch Glazer to the sort of celebrity in Great Britain that New York Yankees owner George Steinbrenner enjoys in the United States.

Some British fans and shareholders remain opposed to foreign ownership of the soccer club. On Tuesday, vandals sprayed a Jaguar and another car owned by a Manchester United director with red paint.

The identity of the bidder on Manchester United was still officially unconfirmed as of Tuesday evening. British newspapers and the Wall Street Journal said unnamed sources identified Glazer as the bidder.

Information from staff researcher Kitty Bennett, Times wires and Times files was used in this report. Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

KEY GLAZER ASSETS

Malcolm Glazer, above, has a number of assets. Their listing is in the following order: Asset, ownership share, and value

TAMPA BAY BUCCANEERS: Football team, 100 percent, $779-million+

MANCHESTER UNITED: Soccer club, 19 percent, $239-million

ZAPATA CORP.: Holding company (owns companies that make airbag fabric and fish oil), 52 percent, $74-million

FIRST ALLIED CORP.: Strip malls, 100 percent, unknown

+ Forbes estimate.

The Glazer family, owner of the Tampa Bay Buccaneers, is reportedly interested in acquiring Manchester United and its teenage sensation, Wayne Rooney, above. But if patriarch Malcolm Glazer bid $1.2-billion, the family is going to have to sell a key asset, borrow money or find a partner to afford it.