The Red Knights’ numbers have swollen to more than 60, with a bid war-chest of more than £1.5 billion now available, according to reports today. Publicly led by Keith Harris with key figures including Jim O’Neil, Paul Marshall and Richard Hyntner, the Knights could formulate a formal bid for the club in the coming weeks to test the Glazer family’s determination not to sell.
News that the group of nine principal investors has swollen so rapidly comes amid the continuing grassroots campaign by the Manchester United Supporters’ Trust (MUST) to raise member numbers beyond 100,000.
In a rapidly developing situation Manchester United managing director first denied that the Glazer family is prepared to sell, mocked Harris’ record and then questioned the potential management structure under a hypothetical Knights’ ownership.
“The better-run clubs are where there is clear single decision-making and it’s quick and efficient – Roman Abramovich at Chelsea, Sheikh Mansour at Manchester City, Silvio Berlusconi at AC Milan,” said Gill this week.
“Having a number of wealthy people involved – they will all want to be involved in decision-making. I’m not sure what their endgame is but the endgame is irrelevant.
“The vast majority of fans of Manchester United should be happy with what we are doing and staying at the top of domestic and world football.”
It is, of course, a ridiculous argument by Gill who was also managing director of Manchester United Plc, which had more than 35,000 investors but an executieve management team to make day-to-day decisions.
There are also plenty of high-profile legal and accounting firms, such Price Waterhouse or Proudfoot for whom Gill both worked, with wealthy partners in the executive team that function well.
Gill, who mocked Harris as a publicity seeker with “no track record” in football, vehemently denied that the Glazer family is ready to sell, while defending the over-leveraged model they have installed at United that has placed £716 million debt on the club’s books.
It is not for nothing that Gill’s pay is significantly above market rates for a £300 million turnover business – he’s quite happy to sit on whatever side of the fence pays best.
But questions do remain over the Knights’ proposed bid, with the speculated £1.5 billion fund as yet unconfirmed. Moreover, the Knights have not yet unveiled a transparent business model for the club, including how much debt will remain within the company after takeover.These are questions that MUST will seek from the investment group in the coming weeks.
Meanwhile, Sir Alex Ferguson, who has been steadfast in his support for the Glazer family has given his most equivocal endorsement of the green and gold revolution yet.
“We take all sinners – I would even take City fans,” Ferguson joked this morning.
“I have no problem with protest. There were plenty of green and gold scarves on Sunday and I was delighted to see them supporting the club.
“We are quite happy. As long as they are supporting Manchester United they can wear whatever they like.”
Ferguson, who believes that the single-ownership structure is easier to work with than the Plc, cannot ignore the wave of sedition at Old Trafford. But the Scot, who famously fell out with former-United investors JP McManus and John Magnier, says that takeover was always inevitable once the club floated in the early 1990s.
“When United became a plc a long way back, they were always going to be bought,” he added.
“People forget that point. Once you are a plc your company can be bought and people bought shares. The Irish trio bought shares. There were quite a few people stalking the club.”
It’s an important point to remember. While the Knights have the club at heart, each will likely invest multiple millions in any future takeover. The exit strategy, which could include flotation or resale, is therefore key. Ousting the Glazer family is only worthwhile if the club is never allowed to be put in this position again.
“But David Gill summed it up earlier this week. The club is not for sale. He has made it quite clear. The Glazer family have said it is not for sale,” added Ferguson.
“I have no issue with the Red Knights. I know some of them. I don’t deny them their right to protest.
“If they want to try and buy the club that is entirely up to them.”
Indeed, Ferguson is friendly with Goldman Sachs Jim O’Neil and it seems unlikely that the manager will not have been given forewarning of last Monday’s Red Knights’ meeting.
Should the takeover happen Ferguson will undoubtedly remain. As for Gill, the new owners’ first act should be to fill in his P45.
15 thoughts on “Knights raise £1.5bn but questions remain”
Look out Glazier, for we are the knights that say “ni”.
Also, we have Orville.
Good article. I wonder what Oliver Gill makes of all this!
Dear God, there is no way on Gos’s green earth that they have drummed up those sort of numbers within the space of days. This is remainding me of the bonkers that goes on at Chelski.
Knight’s silly lies and empty boasts are only making things worse.Fergie backs us. Yeah right. We have already raised £1.5 billion. Yeah right.
The forever increasing number of Red Knights is a cause for long-term concern should any bid be successful.
I cannot, for the life of me, see how so many chefs will resolve future issues, no matter what board they appoint (if they ever agree on that).
I just hope that the rapid increase in MUST members, this last week, is not riddled with John Doe pseudonyms.
It could well give credence to some Zahavi-like character coming thru the back door and taking the lot.
And no, I’m not his lackey either.
I just wonder if this is a good bit of smoke blown by Gill. Didn’t United have something like 35,000 investors under the PLC… surely the Knights (whose bid I still regard as a massive long shot) would appoint a board of directors? Just a thought.
Yes, but the share ownership profile of those 35,000 investors was skewed with a very low modal value.
OK I agree there were many big city investment groups, and the odd Irish horse owner, but it was plc driven (if u get my drift).
I just wonder as to what mindset the knights will adopt when they all put in their equal pots of dosh.
In the end, I just want it all resolved. The sooner the better.
A PLC is a completely different situation though. Still, even a PLC has a few strong constellations of owner groups that effectively control the company, since the rest of the owners usually aren’t organised well enough to do anything. As I recall this was also the case with United.
Apart from the worries already expressed regarding financing, governance will be an issue. Until they present in detail how they will solve this issue, I remain sceptical towards the Red Knights.
Personally, I don’t think the current debt will do us in, but it is down what we can expect in (growth in) revenues the coming years. The big risk is if we get a situation where ownership will meddle to much in football affairs.
BTW Some figures suggest that the Knights’ bid will still need some 250 million coming from the fans’ pot.
That’s an average 2,000 pounds per MUST member (as of today).
I wonder how many will put their money where their signature is, especially as many will be family members with one wallet having to provide.
Yep – that’ll never happen. My best guess is that any Knights bid will include some level of debt. Not £716.5 million mind you. A lot of questions to be answered.
If they need debt to finance the takeover isnt that going to increase the debt rather than reduce it?
Most likely – and this is just a guess – they’ll end up borrowing a couple hundred million to finance the takeover.
PIK and bond debt will be wrapped up in the takeover price but paid off in different ways. The Glazers will pay off PIKs from takeover profit but the bond will have to be paid at 101% of value on takeover and there’s probably an early redemption price of 121%.
There won’t be more debt on takeover but there will be some.
It;s a difficult situation but something must change. United cannot continue to be left in this financially difficult situation. The Red Knights do have to flesh out details of the deal to all United fans, but at the moment I suspect it is too early to do this. They will be organising the funding, the approach to the Glazers and how they will embrace all reds supporters. We want detail but give them sometime – this is afterall an enormous takeover proposal. One thing is for sure, the Glazers must go
When (not if) the bid moves forward, and presuming that we are going to get the option to invest in the club, I think we’ll find that getting said investment from the fan base won’t be a problem. The number of MUST subscribers will go through the roof the moment the opportunity to invest breaks in the mainstream media.
Christ, you’ll have non United fans and football neutrals throwing money at it, not just us Reds.