The six children of Malcolm Glazer who own Manchester United will be paid more than £15m every year from the club after it was announced that there will be a dividend to shareholders.
The five sons and one daughter of the late Malcolm Glazer – Avram, Joel, Kevin, Bryan and Edward Glazer, and their sister, Darcie Glazer Kassewitz – will be paid $3.9m (£2.5m) each annually as the majority shareholders of Manchester United plc, the United holding company registered in the Cayman Islands and floated on the New York stock exchange.
In the 2014-15 accounts of Manchester United plc, whose financial highlights were disclosed on Thursday, the company announced it will pay a dividend of $0.045 (£0.03) every quarter, for each share owned by a shareholder.
The Glazer siblings together own approximately 131m shares, 80% of the total issued, according to a spokesman for the club. That means every three months, they will be paid $5.9m (£3.8m) in total. Annually, the payment of that dividend four times, each quarter, adds up to $23.6m (£15.2m) altogether to be paid to the Glazer siblings – $3.9m (£2.5m) each.
The decision to pay the dividend, the first since the Glazer family floated the club on the New York stock exchange in 2012, was, the company said, made by the board, on which all six of the Glazer siblings sit.
In a conference call with investors, United’s finance director, Hemen Tseayo, said the decision to pay a dividend was because of the club’s strong financial and commercial performance in 2014-15, and predictions of record income and underlying profits in 2016.
The regular £15m the Glazers are set to make from United every year follows a series of occasions on which they have made money since floating the club, which they bought in 2005 using debt that the club itself has been made to repay. The family made £75m selling a portion of their shares when they floated the club in 2012, then last summer sold a further 12m shares for $17 each – making another $200m (£129m). In December, one of the Glazer brothers, Edward, announced the sale of 3m of his shares, for a price that was expected to fetch him $45m (£29m).
Responding to a question from a representative for the investment bank Nomura, who welcomed the payment of a dividend to shareholders, Tseayo said it is United’s intention to pay a dividend every year.
The figures showed United’s income fell by £38m in 2014-15 because of the team’s failure to qualify for the Champions League in the previous turbulent season under David Moyes after Sir Alex Ferguson retired. Despite that drop, United’s total income of £395m is a Premier League record by far, although other clubs have yet to report their 2014-15 figures.
Ed Woodward, United’s vice-chairman, said the club’s finances were “solid” despite the absence from the Champions League, which he characterised as an ability to withstand “short-term headwinds”. United have since signed a record £750m kit deal with Adidas over 10 years and, as they are competing in the Champions League this season, predicted income to surpass £500m in 2015-16, with underlying profits up above £165m.
The debt imposed by the Glazer family when they bought the club with £525m of borrowed money in 2005, remains £411m, despite about £700m in interest and other finance-related costs having been paid by the club since then. The club paid a further £35.2m in finance costs last year, an increase of £8m, principally because of paying a premium when doing another refinancing of the borrowings, in June. Overall, Tseayo said the new financing arrangements should result in United paying $10m (£6.4m ) less interest every year.
Woodward described the latest signings in the transfer market, including Matteo Darmian, Memphis Depay, Anthony Martial, Sergio Romero, Morgan Schneiderlin and Bastian Schweinsteiger, as a “productive summer” and said season tickets and hospitality packages at Old Trafford sold out early.
“As we look to the new season, we are enthusiastic about our strong position, both on and off the pitch,” Woodward said. “Our record revenue and [underlying profits] guidance for 2016 reflects the underlying strength of our business and our confidence in its continued growth.”