Manchester United Football Club stands accused by supporters and many commentators of facing financial problems which are damaging its business model and its on-field performance. Increasing evidence suggests they may be right
It is rarely easy to establish with confidence whether a corporate strategy has gone completely wrong. It is left to investors to weigh up the probabilities and back their hunch with their money. However black and white things seem, there are always shades of grey to be factored into the decision-making.
A paler shade of grey?
There has been little evidence of shades-of-grey thinking at Manchester United recently. In the last few weeks there have been plenty of disappointments on the field of play. These had been taken as yet more evidence of the failure of the business model followed by the American owners since its debt-financed takeover of the club.
The popularist movement from the club’s fan base has been reinforced by the financial interests of the so-called Red Knights. The fans have been pretty convinced from the outset that the new owners were bad news. The Red Knights, however much they claim to be working in the best interests of the club’s traditions, have the single-mindedness of any consortium seeking an acquisition The outsider may have to fall back on interpreting what might be called weak signals out to the market place, and applying the Duck test.
The Duck Test
The Duck Test serves as shorthand for basing a conclusion on accumulating, if circumstantial, evidence. “If it walks like a duck, squawks like a duck, flies like a duck …probability is – it is a duck”.
This week faced with serious injury crises in his squad, and lack of back-up strikers, Manager Sir Alex Ferguson defended the decision (‘non-decision’) to show interest in a world-class striker for next season on the grounds that prices are over-inflated.
Sir Alex is generally convincing, or at least plausible, in his public statements. This time it all just sounded too much like observing a duck walking, squawking and flying.