So the Red Knights are riding into town, presumably on the back of red unicorns. But behind the tantalising moniker and romantic ideology, what’s this all about? And can it work?
Firstly, these ‘Red Knights’ do have real prominence, know-how and contacts within the financial industry. Keith Harris has previously chaired the Football League, and as Executive Chairman of stockbroker Seymour Price, has overseen the purchases of several football clubs including Chelsea and Manchester City. Jim O’Neill, Chief Economist at Goldman Sachs and Mark Rawlinson, a leading mergers and acquisitions lawyer, were both part of the Manchester United board which opposed the Glazers takeover in 2005. These men know their stuff, and along with the rest – of which the full amount is as yet unclear – these ‘Red Knights’ will have a stature and a status which will give them credibility, and a strong negotiating platform with the Glazers.
Since news of the meeting between the Knights broke on over a week ago, the concept has garnered huge support amongst the United faithful, furious with the perceived mismanagement of the club by the American owners. The visual and vocal defiance towards the Glazers has grown markedly in recent weeks, to the point the most eye catching colour in the United end for Wembley’s Carling Cup Final, was indeed the Newton Heath green and gold. The catalyst for the recent defiance of the Glazers was the announcement of the much criticised £500m bond scheme announced in January. Another of the Knights, Paul Marshall helped launch the bond scheme, but declared United’s finances as “worse than disastrous”, a comment which possibly got the wheels in motion to launch this adventurous coup.
To put some figures down, it is estimated the club is £715m in debt, and are paying out over £40m per year in interest in repaying that debt. That has been incurred because the family bought the club with money they didn’t have, and chose to beg and borrow monies to seal the deal. What is most striking about these figures is that the Glazers are haemorrhaging money out of the club, to fund their purchase of the club, and in the long term, their own personal gain from a club, which they have no love nor affiliation to. Technically, the Glazers have done nothing wrong and what they are doing is a common business practice the world over. But this is football. This is Manchester United. ‘MUFC The Religion’, reads one banner draped down from the Stretford End. To this writer’s knowledge, there is not one reading, ‘MUFC The cash-cow’.
The aim now then is to put together a consortium of Reds to buy the Glazers out, and to return control of the club, largely to the hands of people with its best interests at heart. But herein lies its beauty and its beast. Omitting the fact the Glazers have hurriedly released a statement confirming they do not wish to sell one of football’s most profitable vehicles, how would this consortium, however large, fund the buyout? The Glazer family purchased the club for £272m in 2005, and would expect a sizeable return on that. You would then have to add on over £200m of debt, not to mention what to do with the unresolved £500m bond scheme. A successful buy-out would require ready liquid assets of over £1bn. If the takeover goes ahead – which is a long way away – it would comfortably be the largest purchase in football history.
So where will the money come from? Early whispers are abound that there are around 50 ‘fans’ all prepared to stump up around £10-15m each, with the rest to be cobbled together from individual supporter donations in exchange for fan representation of the new regime. Now, the supposed aim of this ploy is to give the club back to the fans. The scarf-wearing, meat-pie eating, hardcore. How many of these bread and butter supporters have a spare £10m lying around? Not many. Which begs the question, why are these ‘fans’ prepared to do so? These fans could easily come from China, Japan, India…Florida? In essence, the club would still be largely owned by faceless businessmen who would expect a return on their investment, the debt constraints may be lower, but it would be far from the communal, supporter-owned model longed for from the Bishops Blaize.
Overall, the key component of the Red Knights meeting was to formulate opinion, ideas and beliefs as to whether the Glazers would be prepared to sell. The general consensus is they would. Despite the on-field success enjoyed since their arrival, the financial exploitation cannot be masked. Long gone are the days when football fans’ financial knowledge stopped at the difference between a fiver and a tenner, and every movement the Glazers make with the club will be scrutinised and criticised by those who want them out. This will be a long, and thankless task. The family are still in the box seat, and for all the talk of gallant knights, and the disapproving waving of scarves, there will be little anyone can do to intimidate hardened businessmen who have been chastened with hostility for years now. For all of those who say that football is just a business, here is seismic proof it is not. The bid may ultimately fail, but how comforting it is to see such a united front try to wrestle the traditions of a humble football club, away from the callous powers of those dollar-eyed businessmen.
