Month June 2009

Month June 2009

United’s board strikes the real deal

June 13, 2009 Tags: , , Opinion 1 comment

It’s not often that the United board have received praise on this website over the past five years. But praise they must receive after Sir Alex Ferguson and Managing Director David Gill played hardball for more than a year in the face of Real Madrid’s relentless pursuit of Cristiano Ronaldo. It was a game of brinkmanship that – while ending in the inevitable transfer of the Portugese winger to United’s European rivals this week – ensured a world-record fee and a massive profit on the player. The board must now follow through and provide all of the funds to Ferguson for squad strenghtening. The alternative – ploughing the funds into the black hole of the club’s finances – would be an admission that United’s £669 million Glazer-induced corporate debt now comes first, and success on the pitch second.

But United haven’t always been so successful in their transfer dealings. The move of David Beckham to Real Madrid in 2003, for example, was criminally undervalued. Beckham, who in 2003 was at the peak of his physical and commercial powers, was sold for just £18 million plus bonuses. United eventually accepted a flat £23 million fee for Beckham and Madrid laughed all the way to the club shop, on the back of a massive increase in commercial revenues. United were then led by Peter Kenyon, now a director at Chelsea, and many fans and pundits felt that it was his incompetent handling of the deal that ensured the Reds were at least £10 million short of a fair market price for the player.

Incoming transfers have been poorly handled too. The year before Beckham’s departure to Madrid, United paid more than £30 million for Rio Ferdinand. While Ferdinand has proven to be an excellent acquisition over the long term, his then central defensive partner at Leeds United, Jonathan Woodgate, moved to Newcastle for a third of the price later than season. Leeds were in desperate need of cash, and United had no competition for Ferdinand’s signature. Moreover, it was widely believed that Leeds’ asking price for the player before the 2002 World Cup in Japan and South Korea had been less than £20 million.

Bad deals are not the preserve of the Kenyon era however. There is also last summer’s transfer of Dimitar Berbatov, in which United blinked first when Manchester City threatened to muscle in on the deal at the 11th hour. After waiting all summer to sign the Bulgarian, in the hope of striking a more favourable deal with Tottenham Hotspur, United eventually paid five million pounds over than their original ceiling for the striker. The player himself paid a heavy price by missing the entire pre-season training programme.

The Reds’ board must now be as hard-nosed in their summer recruitment as they have been with Real Madrid over the transfer of Ronaldo. The club’s pursuit of Antonio Valencia, Franc Ribéry, Karim Benzema and others will now come with additional media scrutiny, and knowledge on the part of the selling clubs that United’s management have cash in their pockets. If United truly believe that the older Ribéry is in a similar bracket to Ronaldo, for example, then Bayern Munich are right in holding out for a reported £60 million fee. About £30 million too much it would seem.

Meanwhile, new President Florentino Peréz believes that Real Madrid can once again increase commercial revenues to cover the cost of Ronaldo’s acqusition. But contrary to Peréz’ claims, the club’s €600 million debt (similar sums have been written off twice in 2001 and then 2007) suggests, despite a massive increase in commercial revenues over the past five years, that the spend, spend, spend policy is unsustainable. But if it goes pear-shaped, at least Real will always have the local council to bail them out.

Ronaldo’s replacements

June 12, 2009 Tags: , Opinion 2 comments

Sir Alex Ferguson will have around £100 million to spend this summer after the sale of Cristiano Ronaldo to Real Madrid yesterday. The board is likely to hand him the entire £80 million fee to spend on replacements, plus money already earmarked for ongoing strengthening. But Ferguson’s challenge is not an easy one. In looking to replace Ronaldo, Sir Alex will need to sign two players in one – a great goalscorer and a great winger. Rant looks at the possible targets.

Antonio Valencia, 23, Wigan Athletic, £17m
The deal for Valencia was done in principal months ago and the Ecuadorian player will join United in the next few days for a compromise fee of £17 million plus bonuses. The speedy wide-man has excellent dribbling skills and a real eye for goal from distance, which mark him out as potential star. But no matter the Wigan player’s form in the Premiership over the past two seasons, stepping up to the big stage at United and performing with the pressure on is something that Valencia is yet to have demonstrated. As such his signing will still be a risk. Moreover, Valencia is very much a winger in the old fashioned mould – he simply won’t deliver the number of goals that Ronaldo produced in recent seasons.

Franc Ribéry, 25, Bayern Munich, £40m – £45m
The French winger-cum-midfielder is better known for his silky skills in wide areas but has been operating through the middle for Bayern Munich this season. Like Ronaldo, Ribéry loves the ball at his feat and is as happy taking on defenders as he is playing a defence splitting pass. His ratio of 14 goals in 32 appearances for Bayern this season is decent, although there’s always a feeling that he has flattered to deceive on the really big stage. At more than £40 million Ribéry is significantly over-priced but Chelsea and Real Madrid’s genuine interest in the Frenchman will guarantee an auction for his services.

Karim Benzema, 21, Olympique Lyonnais, £25m – £30m
Sir Alex has been a big admirer of the brilliant Frenchman for a number of years, and broke usual protocol by singling out the player in the press last season. Although dubbed the ‘new Zidane’ in his homeland, Benzema is more of a hybrid between the (Brazilian) Ronaldo and the French legend. His ability to run at speed from deep with the ball suggests that Benzema has the talent to be France’s leading striker for the next decade. But the Lyon player has many admirers elsewhere, with Barcelona long believed to covet the player. This almost guarantees that stubborn Lyon President Jean-Michel Aulas will get his wish for a multi-club auction, despite denials the player will leave.

Alexis Sánchez, 20, Udinese, £10 – £12m
The diminutive Chilean has been a real hit in Serie A despite what on paper appears to a limited record of three goals and two assits in more than 30 games for Udinese. Despite this El Niño Maravilla has been earning rave reviews for his old fashioned trickery down the wing. It would be a gamble by Sir Alex to bring Sánchez to Old Trafford – a Chilean has never made a successful career in England – but few had heard of Ronaldo before he hit Old Trafford either.

Other Options

Goalkeeper: With Edwin van der Sar begining to show his age United must decide soon if Ben Foster really has the talent, temprament and injury-record to be United’s new long term ‘keeper. If not then Ferguson could use some of the Ronaldo cash to bring in a top-class replacement. There has been speculation in recent days of a bid for Le Mans giant goalkeeper Yohann Pele.

Right-back: With Gary Neville’s career as good as over, Wes Brown almost permanently injured and Rafael da Silva still a callow youth, Ferguson may decide to invest in defensive reinforcements. Could Sir Alex hijack Chelsea’s bid for their former player Glenn Johnson? The Portsmouth defender’s strength is in supporting the attack, but he has improved his defensive abilities in recent seasons.

Defensive midfielder: Rumours have been circulating for a while that the gaffer has Barcelona’s man-mountain of a midfielder Yaya Touré in his sights, following news that Owen Hargreaves will not now return from injury until 2010. Touré has recently rejected a new contract at Camp Nou and would be available for a reasonable price.

Forwards: There’s always the Carlos Tevez conundrum. United may now up their offer for the little Argentinian, who has been such a hit with the fans, if not always on the pitch. But a fair price is a fair price. If Ferguson and the board didn’t believe that an additional £25.5 million on top of the £10 million they have already spent on Tevez represented value for money then why should it now?

United could go shopping at Real Madrid for Jan Klass Huntelaar, the Dutch forward recruited for around £18 million by Los Merengues last summer. The former Ajax hitman was long rumoured to be a target for United anyway, and with Madrid’s Galaticos Mark II policy in full swing, Huntelaar could find himself out in the cold at Santiago Bernabeu.

Real return to ‘Galaticos’ policy but will it work?

June 11, 2009 Tags: , Opinion No comments

News that Real Madrid have spent an eye watering £139 million to bring Brazilian midfielder Kaká and our very own Cristiano Ronaldo to the Santiago Bernabeau heralds the second coming of President Florentino Pérez and his now infamous ‘Galácticos’ policy. With a reported €300 million transfer budget at his finger tips, Pérez has been typically bullish by announcing his target list that includes David Villa, Xabi Alonso, Franc Ribéry, David Silva and Raúl Albiol. Indeed, Villa will probably follow Kaká and Ronaldo to Madrid by signing for Los Merengues this week for a fee in excess of £30 million.

Pérez was first President of Madrid between 2002 and 2006 when he instigated the ‘Zidanes y Pavones’ transfer policy, which saw the club spend vast sums on bringing in world stars, while filing out the squad with youth teamers such as the much riddiculed Francisco Pavón. The policy began with the contraversial transfer of Luís Figo at a cost of £38.7 million from FC Barcelona in 2000, with Real forcing through the transfer after signing a pre-contract agreement with the player that included a massive penalty clause if the player reneged on the deal. It was a similar agreement to the one it is claimed (but denied) that Real signed with Ronaldo last summer. Then followed Zinedine Zidane for a world record £45 million from Juventus in 2001, (the Brazilian) Ronaldo for £26 million from Inter Milan in 2002, and then David Beckham at £25 million from United in 2003.

But the policy largely failed because it was driven more by marketing than the needs of the team. Pérez was prepared to spend vast sums and wages on star names but this was rarely the case for defensive players. Indeed, it was a policy that led to the departure of Claude Makélélé to Chelsea in 2003 for a huge wage increase. It was also claimed by one Madrid director that the club brought in David Beckham rather than Ronaldinho – the player Sir Alex Ferguson wanted as the Londoner’s replacement – because the Brazilian was ‘too ugly’ to sell shirts.

Madrid under Pérez was also a club riven with factionalism and in-fighting, where the manager had minimal input into team selection and precious little time to succeed. In fact success was no guarantee of a job the following season – Vincente del Bosque was famously sacked in 2003 after winning La Liga because he fell out with Pérez. Many other managers followed. This instability meant that during Pérez’ first spell in charge the team won La Liga in 2001 and 2003, and the Champions League in 2000 and 2002. Was this really enough silverware given the club’s vast expenditure?

Now Pérez appears to be instigating a new Galácticos era that bares all the hallmarks of the past. Time will tell whether the club manages to find the appropriate balance between huge expenditure on big name attacking players, and the stability that comes with a long term manager and solid defensive unit. Many will have their doubts despite the huge names signing on the dotted line.

It’s adieu Ronaldo as United accept bid

June 11, 2009 Tags: , Opinion 2 comments

Cristiano Ronaldo will finally move to Real Madrid after Manchester United’s board accepted a phenomenal £80 million bid for the player today. The offer from Madrid, which United claim is unconditional, will be the second time the Spanish side have set the world-record for a transfer fee this summer after Kaká moved to Santiago Bernabeau for £59 million earlier this week.

In a statement Manchester United said that they had accepted the offer at “Cristiano’s request” because the player had “again expressed his desire to leave, and after discussion with the player’s representatives, United have agreed to give Real Madrid permission to talk to the player. Matters are expected to be concluded by 30 June.”

Real Madrid confirmed only that they are trying to buy the rights to Ronaldo and that they “hope to reach an agreement with the player in the next few days.”

United finally accepted the bid for Ronaldo today after fighting off Madrid’s aggressive advances for the player over the past three years, and in particular the previous 12 months. So angry were Sir Alex Ferguson and the Manchester United board that they complained to FIFA about an illegal approach by the Spanish side last summer. Ferguson went so far as to say he wouldn’t “sell Madrid a virus,” let alone Ronaldo.

Clearly the situation has changed this summer, enabling Madrid to pounce and bring Ronaldo to the Spanish capital. The player, who has repeatedly said that he wants to stay at Old Trafford in recent weeks, has kept his council better than last summer, inflaming the club’s hierachy less than in the past. But Ronaldo’s much stated “dream” that that he wants to play in Spain, and specifically with Real Madrid, has apparently never gone away. This much is clear if he has asked for the transfer, as is hinted at in United’s statement.

The change in Presidency at Real Madrid has also made a huge difference and enabled the transfer to go ahead. Not only is new Madrid President Florentino Peréz an operator at the highest level but he has a strong relationship with Manchester United’s Managing Director David Gill, with the pair having encountered each other frequently in work for UEFA. Peréz’ predecessor Ramon Calederon was far less subtle, infuriating Manchester United’s board and manager along the way with his open courting of Ronaldo, even after the club had said no time and again. Peréz’ re-election has also enabled Madrid to open a line of credit with the banks, which will be used to finance the deals for Kaká and Ronaldo.

Ferguson – in hindsight – have also been preparing for life without Ronaldo. The manager has adapted the team’s tactics over the past year. United have moved from a 4-3-3 in 2007-8 to something closer to a 4-2-3-1 over the past season, with Ronaldo (save for a few games towards the end of the campaign when he played centrally) used in a more conventional wide-right role. In part this was to accommodate Dimitar Berbatov as the team’s attacking pivot. As a consequence United can plan for next season without altering their tactics. Berbatov will be shadowed by Wayne Rooney – a move that will surely liberate the player to perform at the level he has with England this season – with Antonio Valencia due to come into the side on the right wing. Nani, Zoran Tosic, Ji-Sung Park and potentially a big name new summer signing will fight it out for the other wide spot.

Whatever Ferguson decides to do with his £80 million plus summer transfer fund, he will need to re-inject some pace and verve into the attacking unit without Ronaldo and – almost certainly – Carlos Tevez. Names such as the aforementioned Valencia alongside Franc Ribéry and the phenomenally talented Karim Benzema will surely be front of Sir Alex’.

The fans meanwhile will mourn the loss of Ronaldo’s incredible contribution to the team but perhaps not the man. While many consider Barcelona’s Lionel Messi to be the more technically gifted player, there has rarely been a footballer with more destructive talents than Ronaldo. His pace, even when running with the ball, shooting from distance, positional play that enable him to score so many goals from a wide start, and ability in the air mark him out as irreplaceable.

However, few fans will shed a tear for Ronaldo, the man, after he leaves Old Trafford for the last time. His histrionics on the field, ego within the dressing room and open courting of personal publicity off the pitch have often bordered on the unacceptable. After all United, even following multi-million pound takeovers and massive commercialisation, are still a fans’ club. And Ronaldo has little in common with the fans.

Aon hand over fat cheque to ease United’s financial woe

June 7, 2009 Tags: , , Opinion 1 comment

What do you do when your large American insurance shirt sponsor goes bust and pulls the deal? Get another one of course! That’s exactly what United have done in the last week by announcing that US risk management group Aon will be the team’s new sponsors from the start of the 2010-11 season. The deal is rumoured to be a world-record £80 million over four years, replacing the £14 million per season contract with AIG, which is due to run out at the end of next season. The announcement will ease the pressure on the board who were forced to seek a new sponsor in the middle of one of the worst financial climates in living memory. Bizarrely, United’s shirts will continue to display the AIG logo next season despite the firm having been bailed-out by the US government to the tune of more than $100 billion.

Announcing the deal, Manchester United chief executive David Gill spoke of his delight at entering “such an important relationship with a company of the stature of Aon.” In reality United were open to the highest bidder, save for any companies (such as gambling or porn) that wouldn’t have sat well with the club’s American owners. The huge deal easily outstrips the £25 million five-year deal recently signed by Manchester City with Etihad Airways, or the €15 million per season deal that Real Madrid have in place with online gambling site Bwin. With that Gill was able to claim that the “announcement clearly strengthens our position as the world’s leading football club.”

While Aon may not be a brand name in Manchester, the deal less about the UK market, and more about United’s presence in emerging markets and the Far East, where Aon hope to capitalise on United’s claimed 330 million fans. Aon’s CEO Greg Chase spoke of the “unique opportunity” to partner with “one of the most recognised sports brands in the world.”

The deal comes just days after United announced that they had earned over £90 million in TV prize money in a season when they won the Premier League and Carling Cup, and reached the final of the Champions League.

However, the Reds are still in hundreds of millions of pounds of debt. This season’s profits will barely pay off frightening annual interest payments on debt that is over £667 million as of the most recent accounts. The debt is made up of a £425 million cash loan that is secured on Old Trafford, Carrington, season ticket sales and players. According to The Guardian’s David Conn a further £90 million of unsecured loans and £152 million in Payment in Kind debt are also owed by the club.

The new shirt deal will add to United’s revenue at time when it is most needed. With the Glazer family so far unable to refinance the massive debt, they have consistently rolled annual interest into the overall debt – including the £30 million purchase of Dimitar Berbatov last summer. It’s a policy that will see United paying ever more in interest and paying down very little of the actual debt.

Almost inevitably United are looking to trim their expenditure this summer with £7 million Frazier Campbell set for a permanent move to Hull, and Darron Gibson and Danny Simpson placed on the transfer list. The financial climate has also put a hold on the transfer of Carlos Tevez, with the club unwilling to match his “owners'” £25.5 million valuation. While a compromise agreement was rumoured to have been reached last week, the smart money says the Argentinian will move across town to Manchester City and the vast wealth on offer.

Hargreaves: over and out

June 3, 2009 Tags: Opinion 7 comments

It is fair to say that the protracted acquisition of Owen Hargreaves at great expense from Bayern Munich in the summer of 2007 has been an unmitigated disaster. A disaster that just got worst with the news that the Canadian-English international will not now play again for United until January 2010. With the latest setback to Hargreaves’ United career questions must now be raised about whether he will ever play for the club again. It poses a serious dilemma for Sir Alex Ferguson, who needs to rebuild confidence in a midfield that was so badly exposed by Barcelona in the Champions League final. Should Sir Alex cut and run by offloading Hargreaves when he’s finally fit and bringing in new blood, or stick it out and hope that when the player finally returns he will be as good as ever?

With the departure of Roy Keane, United have lacked a true tough-tackling defensive midfielder. This much is true even with the rise in performance this season of Michael Carrick, whose positional sense and effective passing has been instrumental to United’s success. But for the sake of balance Ferguson pursued Hargreaves for two summers, until Munich finally gave in and United’s board handed over the best part of £20 million. Despite some criticism that Hargreaves plays in the same position as Carrick, the move was broadly right. Hargreaves adds something different to United’s squad. Indeed, if the midfielder had been fit, his energy and ability to break up play may have made some difference in the Champions League final.

Now Ferguson must decide whether, for the same reasons of squad balance, he needs to spend big this summer on a tough-tackling defensive midfielder to compliment the abilities of Darren Fletcher, Anderson and the aforementioned Carrick. But this task wont be easy or cheap. Top-class defensive midfielders can be counted on the fingers of one hand and the price to United would surely be in excess of £20 million – the fee that Real Madrid paid for Portsmouth’s former Chelsea and Arsenal reserve Lassana Diarra.

Of course the same criticisms apply to any new acquisition as they did to that of Hargreaves in the first place. Fletcher, Anderson and Carrick have all occupied deep lying midfield slots in the past season. Is there value to the squad in having yet another player in that position? This argument is even more pointed when we think about the experience against Barcelona in Rome, where Barcelona’s ability to keep the ball was so fundamentally destructive to United’s hopes. While Carrick and Paul Scholes, when he plays, rarely give away the ball, the same cannot be said of Fletcher, Anderson and to some extent Giggs. Perhaps Ferguson would be better spending £20-£30 million on a creative midfielder who might stand-up to the class of Andreas Iniesta or Xavi Hernandez, who so embarrassed United in the Champions League final?