Glazers to sell MUFC via Hong Kong floatation?

June 13, 2011

Red Knights of MUFC

More rumours that the Glazers are considering selling Manchester United Football Club. Hardly surprising news. But still a lot of smoke and mirrors around.

The most recent rumours suggest that the owners of Manchester United Football Club are being urged to float the club in Hong Kong as it will bring better returns than when floated in London. Perhaps my financial bodyguards will help me on this one.

According to City am

Bankers are said to have told the Glazers that the Premier League champions could be valued at as much as £1.7bn if listed in Asia, where the team have carefully built up a large following. That is thought to be substantially higher than the price that a similar move in London could attract, and would offer the American property tycoons the chance to double their money, having bought the club for £790m in 2005.

The article goes on to quote the Manchester United Supporters Trust as having reservations about the sale being made in Hong Kong. City am also suggest that any bid will interest The Red Knights, the consortium of wealthy United fans led by Jim O’Neill of Goldman Sachs.

Metaphors to leak with

Opposition to The Glazers led to the formation of MUST opposing the high debts within the owners’ financial model. Qatar Holding, the investment arm of the Gulf kingdom, have also been linked to bidding for the club. More cynical voices have suggested that leaked stories are too often exercises in kite-flying, testing the waters, or whatever metpahor you prefer for information revealed by interested parties for their own ends.

To go more deeply

Check out the stories in LWD on MUFC, The Red Knights, MUST, and The Glazers in earlier LWD postings.


Manchester United: Something strange about the Red Knights?

March 28, 2010

The Red Knights announce they are not planning an imminent takeover of Manchester United football club. There is something strange about the announcement and about the Red Knights

Many takeovers take place under conditions of secrecy. There are considerable advantages in such clandestine behaviour. It retains any opportunistic benefits in the potential deal over other investment groups, for example. It avoids unwelcome attention from the target organization towards the threat.

This is what puzzles me over the actions of the so-called Red Knights. Their strategy seems based on gaining as much publicity as possible for their intentions to take over the debts and ownership of the football club. This transparency is not necessarily wrong. Yet, the more typical-goings on in a takeover are suited to insider trading which has sometimes gone on during a financial corporate bid.

The Red Knights are not an established takeover organization. They appear to be an entrepreneurial and virtual set-up whose individual members present themselves as having widespread knowhow and contacts in big players in the financial markets.

A story has developed around the Knights. The BBC version seems the capture the publically-available information:

A group informally known as the Red Knights is plotting to oust the Glazers with a billion-pound takeover bid and they have recruited the Japanese investment bank Nomura to help them put together a deal.

Who is behind the consortium?

The group, who first met in March, is made up of City bankers and lawyers. Among them are Jim O’Neill, a former HSBC investment bank chief executive and chief economist at Goldman Sachs; Seymour Pierce stockbroker Keith Harris; Paul Marshall, a partner at the hedge fund Marshall Wace; Richard Hytner of advertising agency Saatchi and Saatchi and lawyer Mark Rawlinson, a partner in Freshfields’ corporate practice, who advised United during the Glazer takeover negotiations.

Does the group have the fans’ interests at heart?

Self-professed United fan Harris, the man brokering the potential takeover, claims the group want “to do something for the good of Manchester United and the good of football.”

On Red Knights and the Age of Chivalry

The Red Knights, whoever they are, have won the commitment of the Manchester United Supporters Trust (MUST). In turn, MUST has created a wellspring of trust as an organization dedicated to the interests of the ’true’ fans of Manchester United. I find their motives relatively clear-cut, and suspect that they may well have influenced the decision at the club to freeze prices of season tickets next year. On the other hand, the fans are one important aspect of the club’s business environment, but not the only interest. There may be genuine differences of opinion, for example, on how revenues are managed, what proportion towards expensive new players, for example, how much to extract from those loyal fans.

Furthermore, I am suspicious of self-proclaimed heroes rushing to the aid of damsels in distress. As Monty Python has helped us realise, the age of chivalry has passed. I just hope the legacy of the legend of the Red Knights will be more than another layer of irony in renditions of an Old Trafford favourite “Always Look On the Bright Side of Life” [… de dum, de dum, de dum…]


Manchester United: Where the power lies

March 2, 2010

The American owners of MUFC are facing tough financial times. If you use media coverage as a guide, fan power at Manchester United is high. A new challenge comes from the Red Knights financial consortium. But where does the power lie which will influence the future of the club?

It has been a good month for the fans’ pressure group at Manchester United. The media campaign is a model of how to win attention for a cause. In a recent post LWD suggested the fans were winning the battle for symbolic leadership.

A protest movement has grown in strength in recent months. Banners are displayed at home games and sometimes removed by officials. And one particularly creative idea has taken off. The protesters have appropriated the green and gold colours of the original team. Supporters wearing the shirts have stopped the financing of the club’s mega-store merchandising. But even this gesture illustrates a dilemma for the protesters. Do they attempt to weaken the club they love, to bring down its owners whom they detest?

Where the Power Lies

In eadership textbooks, power is treated uneasily, running through all the accepted leadership eras, rather than fitting nicely into one of them. Definitions of leadership prefer the term influence rather than power. Dilemmas of Leadership suggests that careful reading of leadership texts is required to reveal the ‘concealed dilemmas of power, control …coercion and conflict resolution’ (p244).

Management of change texts also struggle with the concept of power, leaving students confused about the link s between leadership, influence and power. One well-regarded text on organizational change does manage to confine it to a single chapter, suggests that the various definitions ‘have one thing in common – having power means being able to influence someone else’s behaviour (Senior & Fleming, 3rd edn, 2006: 197).

The Battle for Power at MUFC

A new financial grouping, The self-styled Red Knights, is seeking to gain power in a way which aligns with the MUST pressure group. It is likely that the two groups have been in contact, and will continue to be so in the near future.

United are owned by the Glazer family, but the club’s high level of debt – now at £716.5m – has prompted much unease. Goldman Sachs economist Jim O’Neill, who was acting in a personal capacity, lawyer Mark Rawlinson and financier Keith Harris were at the meeting. A spokesman for the Glazers told BBC Sport: “United is not for sale.” However, United’s owners are now facing a two-pronged attack over their control of the club with the Manchester United Supporters’ Trust (Must) running a vocal campaign to bring about a change of ownership. Must has recruited 53,520 members and recently started working with Blue State Digital, a communications agency that worked on Barack Obama’s successful US Presidential election campaign.

Pressure on the Glazers and its Red Football Joint Venture has increased as the level of debts has been revealed, secured against the football club. Financial status of the club also seems on the slide against global rivals Real Madrid and Barcelona. However, the headlines lose some significance when a drop to third in the ‘rich list’, a financial league table is seen as largely due to a decline in the exchange rate of the pound sterling.

“We continue to assert that the game’s top clubs are well placed to meet the challenges presented by the difficult economic environment,” said Deloitte’s Dan Jones, who compiled the [rich-list] report. “Their large and loyal supporter bases, ability to drive broadcast audiences, and continuing attraction to corporate partners, provide a strong base to underpin revenues.”

Prospects?

The Red Knights have a battle plan, finance, and links to committed and well-organised supporters. On the other hand, the club is not such a basket-case financially for there to be a quick and cheap victory. Even a £billion victory which would not guarantee that the fans will achieve the power needed for them to have a say in ticket pricing policy, for example.