Sam Wallace: Manchester United fans should look long and hard at spin and promises of City slickers
Monday, 8 March 2010
The Conservative Party strategists who have sought to insert David Cameron into government with the minimum of policy promises must look with envy and awe at the Red Knights and their reams of positive publicity.
This is not intended to belittle the basic principle that United need to be free of the Glazers. We can all see that. The bond issue document that the Glazers issued in January was as heartbreaking a piece of corporate literature as you will ever read, offering up stadium, training ground and even players to serve the debt.
So far the Red Knights have operated in the shadows and the unattributed claims yesterday that they had the secret support of Sir Alex Ferguson, despite his vehement denials, were the clearest indication yet that they could be fighting a dirty war.
Even the name Red Knights invites us to assume that they are automatically the good guys. The concept of Red Knights is a thrillingly ingenious play on the myth of white knights who, of course, always ride to the rescue of those in distress. The Page Ranking firm really earned their money there.
The executive types of the City love to make themselves sound more glamorous with monikers such as these. Just for the hell of it some of them have pictures of footballers on their office walls and proclaim themselves "footy mad". They give interviews to the business pages in which they compare themselves to football managers and even take their ties off when they go to games.
It is all very heart-warming that people such as Jim O'Neill, the putative head of the Red Knights, is so willing to share with us his Moss Side childhood and passion for United, but that does not really answer the basic question. How would his consortium offer a stable alternative to the Glazers?
What O'Neill seems to be proposing is a collective fund of anything up to £1.5bn which is made up of, according to some reports, as many as 60 investors, at least one of which could put up as much as £600m. It presupposes an extraordinary alliance of rich, powerful people all of them used to having their own way, yet all pulling together for an institution that may never return them any profit.
We have heard so much about the so-called Red Knights' impeccable financial acumen and their genius for tapping the emerging markets. What we have not been told is how they plan to unite this disparate group of investors; a job that sounds about as challenging as shepherding the mid-1980s United team out of the pub at closing time.
It is for this reason that United fans' groups, who have given so much of their time and energy to opposing and exposing the Glazers, need to think very carefully before they decide to back this particular horse.
In the Financial Times on Saturday, a source close to the Red Knights was quoted on the subject of the Glazers hiking ticket prices at Old Trafford in order to pay down the debt. He said: "To apply private equity principles to lower income levels of society is completely inappropriate. It is very harsh on these people."
Hang on a minute. The very principle of private equity is borrowing money to buy companies, cutting costs (which roughly translates as "sacking people"), using the cash-flow to pay the debts and selling the entity on for a profit. Goldman Sachs, for whom O'Neill is the chief economist, has a private equity department which, among other deals, was part of a 2002 buy-out of Burger King whose staff are regarded as low-income.
Are we to believe that those men among the Red Knights who have dedicated their lives to pursuing the margins of profit have suddenly been overcome by brotherly love for the average Stretford Ender with a season ticket and a terraced house in Urmston?
As for Keith Harris, the Red Knights' stockbroker who spends as much time being interviewed as he does raising finance, his call to arms for United fans to cancel season tickets and boycott matches should be treated very carefully. The Manchester United Supporters' Trust, the largest of the fans' groups, has not yet endorsed that nuclear option, which could yet do extreme damage to the club.
That is why it is understandable when United's chief executive, David Gill, reacts with anger to the Red Knights, a group that have managed that age-old political trick of winning prestige without actually doing anything. Gill opposed the Glazer takeover as long as his legal obligations as a director permitted and since then he has run United as best he can under the debt.
He deals in the reality of the situation, which is keeping United afloat under an unfavourable regime. Like the Tories, the Red Knights are very good at imagining how they would ride to the rescue but they should explain how that works in reality before they are granted the endorsement of the fans.
Full article:
Sam Wallace: Manchester United fans should look long and hard at spin and promises of City slickers - News & Comment, Football - The Independent
