Negotiation 101. Don’t admit your possession is for sale unless you are absolutely happy for the price to plummet. It’s a refrain familiar to many a football club in the player transfer market. Today Manchester United’s owners, the Glazer family, warded off the first shot in a drawn out war for moral and legal ownership of the club.
Reports today suggest that a group of wealthy investors, known colloquially as the Red Knights, met at leading law firm Freshfields’ London office on Tuesday to flesh out a possible bid for the club.
Those involved in the Red Knights group include Goldman Sachs’ Jim O’Neill and Freshfields’ Mark Rawlinson, while international hedge fund trader Paul Marshall of Marshall Wace and Bet Fred founder Fred Done have also been linked to the group in the past.
In recent weeks financier Keith Harris, the Manchester United Supporters’ Trust (MUST) and wealthy fans have formulated plans to make a bid for the club, bought by the Glazer family in a highly leveraged £790 million deal during summer 2005. Urgency to mount a bid, fueled by growing anger at the Glazer family’s ownership of the club, has accelerated since details of United’s finances became transparent as the club sought to market a £500 million bond issue in January.
However, the Glazer family has consistently claimed that it is a “long-term” investor in United. It is a message repeated today in a terse one-line response from a family spokesperson: “Our position is that Manchester United is not for sale.” The oft-repeated refrain that almost certainly means the club is available – for a price.
In the parlance of the day everything has its price, despite denials to the contrary. Debt-laden United, which owes £716.5 million to financial institutions and bond holders, will haemorrhage more than £565 million in interest, fees and dividends over the next seven years according to the Glazer family’s own figures.
While the Red Knights’ desire to buy out the Glazers is genuine, any bid will come at a very heavy price. Probably more than £1.2 billion, including outstanding club debt of £509 million. The Glazer family will also use club funds to reduce the £200 million payment-in-kind loans under their name.
Since the 2005 takeover United’s turnover has increased considerably, driven by a new Premier League deal with Sky, huge rises in matchday ticket prices and increased commercial revenue from partners such as new principle shirt sponsor Aon. As such, the multiplier required to mount a successful bid that includes a premium for the current owners and covers club debt is much higher than the 2005 £790 million buyout price.
In a move not lacking in irony, the group has also lined up Finsbury to advise on public relations matters, according to a report in The Times today. The firm also advised the club in 2005, and its London office was subjected to repeated pranks by angry United supporters including a denial of service attack on the company’s website.
The Red Knights is not only potentially wealthy but includes some internationally recognised minds of true clout. Seymour Pearce-based Harris is an outspoken critic of the Glazer regime, adding in recent weeks that the family is placing the club in danger, while accelerating arrangements to bring the Red Knights closer.
Meanwhile, Marshall recently called for a fan ownership model at the club, similar to those employed in Europe’s leading clubs such as Barcelona.
But perhaps the most vociferous of the Red Knights is O’Neil. It is not without pertinence that Goldman Sachs’ head of global economic research is a leading figure in the anti-Glazer movement.
As thousands of terrace fans don the green and gold of Newton Heath, modern United will need each of the Red Knights as the long battle for control commences.
23 thoughts on “Glazers field first shot fired across bows”
True to form.
If you want to buy summat, don’t make it obvious.
This friggin’ green and gold farce will only serve the Glazers’ bargaining position and make us all look a bunch of canary pussies on the terraces.
We resembled a bunch of uncoordinated Norwich-like wimps in comparison to the Villa fans at Wembley instead of decking the place out in our usual red drapery.
Not just that, we sounded like a load of tweets in the noise stakes.
As for Keith Harris. He’s just another of the greed brigade, mate.
Sure, he wants us to boycott all things United.
Then what ?
Who decent will want to play for us when no money is coming in?
I’ve bin with this club for 50 years now.
Seen the ups.. and well remember the depths of the mid 70s.
There’s nowt like a full OT competing with the powers of Europe.
I, for one, don’t want to see a return to grubbing around the rags of the English lower divs. Yet, if we’re not careful, that’s where all this could end up.
I don’t quite get all this to be honest. I realise the club does not appear to be on a sound finacial futting but how will these red knights solve that problem. If they were to be sucessful in purchasing the club or the reported £1billion would the club not be even worse off? Am I to understand that these guys will buy the club for £1billion cash and not expect to get there money back because they are fans? Surely not!
As I said at the beginning, I don’t quite get it. What business men/women will invest that sort of money and not want a return on it? Perhaps everyone should be careful what they wish foe…they might just get it. Also I’ve always got the impression that the Glazers were ok as owners. The manager seems to have money to spend when he wants it. OK the Ronaldo money wasn’t used but I don’t think that was nessesarliy the Glazers saying he couldn’t spend it. Knowing we had £80million sitting there made every players price sky rocket and Fergie wasn’t about to get ripped off even if its not his money. And lets be honest, we’re not doing too badly this season either are we? We’ve won the first trophy, have one leg in the CL 1/4 finals and are 1 point off the top of the league. We may win another treble or we may win nothing else. But hey, you can’t honestly expect to win the league every year, theres a reason no team has ever done 4 in a row…its not easy.
It’s simple really. Are you happy that £565 million will leave the club in interest paymens, fees to the Glazers and dividends for the Glazers over the next seven years because that’s what the Glazers own financials say will happen. And then United will STILL have £500 million debt left!
You also have to ask yourself another question. How much have the Glazers put into United. Guess. £1 million, £10 million, £100 million. Actually the answer is £0. Nothing. Zip. Zilch. Nada. Rien. Not a single penny.
As for the Red Knight investors. Well this is a good question. They’ll allow fans to buy some that’s for sure and the plan as it stands is for MUST or fans groups to have a 25.1% share, thus blocking a sale future or listing of the company. Will they want a return – sure they’ll be entitled to dividends as would any owner. Will it be the £80 million a year the Glazers plan to suck out of the club? Not a chance.
Hang on Admin. You’re twisting in a bit buddy.
First the 1/2 billion or so debt.
This is all part of the global Glazer pot.
Per se, they have chosen to reallocate their financial portfolio so that, to their funding agencies, their debt appears largely against the part of their company which holds United.
They could choose to transfer all this debt overnight to another of their pots, if they so desired, so making United look in the black. Course that’s hardly likely now that they have raised a new bond issue, but you get the point for the sake of this argument.
It’s the way these financial moguls operate. That’s what pure and simple.
As far as their ‘not putting a penny in’ that’s like saying you’ve just payed your heating bills, and put some funds aside for a new roof, by remortgaging your house – which is what the Glazers have done and do (hell I would not like to pay our players’ wage bill every week).
Fergie has the money available. Period. He gets what he wants, when he wants it; in other words he’s wisely prudent as you would expect any canny Scot to be. We have a squad which, in fact, is embarrassingly large and will have to be trimmed if the Premier League (and UEFA) barons get their way. Yet, I would wager, if Ronny wanted to come back tomorrow, and Fergie wanted him back, the funds would be there. Period.
As for the Red Knights and Mr Harris. Well, as I’ve said many times they’re all part of the same genetic make-up. Believe me. You’ll trade one slug for another leech. Period. (again!).
This whole charade is making me puke.
Green and gold sucks in (a) the Victorian era and (b) the terraces of Norwich.
We are Red.
Had more reds joined the few of us back in ’91 (whenever) and traded a few pints for public shares this would never have come about. They didn’t because they were obsessed with lambasting the then ‘owner’ Martin Edwards in the same irrational way as sentiment has taken over today.
The only saving grace this time is that if sense prevails at least 25% of the shares will be blocked away from allowing individual ownership.
You’re miles out I’m afraid. You talk as if your opinions are facts when in its only conjecture at best. And badly informed conjecture at that.
The business model and financing are revealed in minute detail in the Glazers’ bond prospectus. £508 million is the current debt on the club’s books. It can’t be moved, the family has just made a contract with bond holders. Second, there’s another £208 million or thereabouts of PIK debt, which the Glazers own prospectus says will come from club funds.
I’m not sure why seeing £565 million disappear from the club’s coffers – the Glazers own figures not mine – is going to help the club at all and it’s really sad to hear reds like yourself, assuming you’re not just another Glazer PR lackey posting on here (I’m giving you the benefit here), so misinformed about what’s going on. I urge you go go read the prospectus and not repeat spin. For some really good factual analysis there’s http://andersred.blogspot.com
Fergie has the money does he? Let me give you another fact, not an opinion. Since the Glazers’ are about to take £130 million from the club’s cash reserves anything Fergie spends will be new debt.
Boy, do I wish I were a Glazer PR lackey.
I wouldn’t be wearing holes in me socks to pay for the next season ticket and then forking out whatever it takes when I miss out on the ballots.
Listen bud, I’ll give you benefit of doubt and assume you’ve got it right with your Rafa-like facts. You seem to be really well informed and extremely astute in your conclusions.
God bless the Red Knights.
Oh, and by the way, one thing I have noticed is that if someone dares play devil’s advocate on your site you spew forth the tirade that they must be of Glazer’s lynch squad.
This is more reminiscent of Soviet Socialism.
In which case you should definitely revert to wearing Red.
Some of us really care for this club and have done for many, many years.
When tears come into your eyes reminding of life’s moments connected with this club, whether family, work, whatever, all tied in with whatever United were doing at the time and fellow so-called fans retort like that, it makes me really sad.
Next time, consider your response.
Oh dear. You do make me laugh. You’re given a voice here like everybody else. If I didn’t want to offer you a platform too, I’d simply delete your comments, which I don’t. It’s the same with every other commenter . And like every other article on the site unless somebody resorts to personal insults the comment is always approved. Whether they agree with me or not. It’s been that way for six years.
I’m not sure how offering my opinion on somebody else’s comment is akin to “soviet socialism”. I disagree with you, I think you’re badly informed. I’m entitled to my opinion and I’m entitled to say it. As are you!
If anyone thinks an American family with no idea about football is a better option than some of the best business men in the world, who just happen to be staunch United fans, combined with a supporters trust is deluded.
Apologies, I must have misread.
I thought you had all the facts and we only had opinions.
Sorry, I am out of my depth here mate.
The Soviet reference was supposed to be the joke, by way.
Anyhow, thank you for putting up with me.
I’m off to become a lackey for Keith Harris now,
although after this I don’t think I”ll get a good reference from the Glazers.
OK calling you a Glazer lackey was well OTT and I apologise for that. Can we kiss and make up now?! But there were a large number of pro-Glazer comments that repeated club spin almost word for word coming from similar IP addresses. Paranoia maybe but it doesn’t mean they’re not out to get us!
I have no facts on the Red Knights and I’ve no idea if they’re a good idea yet. Can’t be worse than the Glazers though. They’ve released very little information on who they are or where their money will come from. Personal cash? Borrowed? How much return on investment will they want? How much debt will there be? How much equity will the fans get? How do we pay for that? What provisions will there be to ensure the Red Knights don’t sell up?
Seanyboy, many of the best business men in the world have just got us all in a right mess.
I’ve just found your site and been reading some of the comments together with your replies here.
You may have overreacted to one fellow Red Red.
He only seems to be offering a warning bell as a fan who cares for the club.
I, for one, am horrified at what the Glazers appear to be up to and would welcome some solution. But it has to be thought out and I too am a bit wary of many of these so called red night business men. If you have the facts, who are they ?
Thanks Jim. Same IP address as Real Red btw….
Jo, and your better alternative is………..?
Well bugger me Jim, you’re a one!
You mean as one? As in you’re one and the same!
Fear not, seriously, I do concede that there is little worse than the Glazers.
Unfortunately it is the way of the world at moment, cf Kraft and Cadburys.
Let’s just make sure that whatever is worse, we don’t end up with it.
Ahh, if the IP addresses are similar then it could be BT .. hint.
The same and maybe! B.o.D
Ed, u don’t have to publish this. I’ve said enough already.
One thing that could be worse is several big-gun Red Knights eventually clashing around the table once they have taken over.
There is an even higher probability of this if they are passionate reds, as well as being well endowed, strong-headed, business types.
Remember the old adage about too many chefs in the kitchen.
You must have better access to those influential at MUST to insure against this.
I am as paranoid about all this as you are about your IP addresses.
nice blog brother…….