Month May 2010

Month May 2010

Three amigos bridge generation gap

May 31, 2010 Tags: , , , , Opinion 16 comments

When Jose Mourinho takes charge of Manchester United in summer 2012 he will have on his coaching staff three recently retired club legends. That’s the scenario posed by the week’s events, with the Portuguese signing on at Real Madrid, while Paul Scholes, Ryan Giggs and Gary Neville were each offered coaching roles at Old Trafford.

With more than 2,000 club appearances between them, the trio has amassed a wealth of experience at the club that is only surpassed by the manager, Sir Alex Ferguson, himself.

Indeed, with the each now taking UEFA B and A coaching qualifications as the twilight of three magnificent careers approaches, the Scot believes that Scholes, Giggs and Neville will extend their stay at Old Trafford beyond two decades.

“They are living proof for young players that the United system allows players to succeed,” Ferguson told French sports newspaper L’Equipe.

“When they stop playing they will stay. All three are taking their coaching diplomas. I don’t think the club will pass up that much experience.”

Should the amigos remain at Old Trafford beyond their playing careers it is likely each will outlast their manager, who at 68 many pundits feel is unlikely to continue beyond a further two seasons. They will also offer an important element of continuity during what is likely to be a tumultuous period at the club post Ferguson’s retirement.

The risk of turmoil following Ferguson’s walk into the sunset is already noted, with United”s chief executive David Gill promising bond investors that the club will – no pun intended – “manage” the process.  Still, there is little secret in the ceo’s preference for the Portuguese coach to take over at Old Trafford in Ferguson’s wake.

Indeed, while Gill this week claimed he will consult Ferguson on the Scot’s successor there will be few dissenting noises emanating from the manager’s Carrington office if his good friend Mourinho is offered the Old Trafford hot-seat.

“Alex is on a rolling contract. He is doing well, he is happy and he has a good staff who he works very closely with. When he decides he wants to retire he will have a word with me and say ‘The end of this season or next season’,” said Gill this week.

“We would work with him in terms of identifying a replacement. In terms of criteria we will sit down and say ‘What attributes must a manager have? Lots of things come into that. British or European? What experience they have, languages all that sort of thing as well as their track record.

“The final decision will be discussed with Alex, Bobby Charlton and the owners. I think Alex will be the key. He knows people. He will have a big role in advising and being a sounding board.”

Perhaps no surprise then that Mourinho – officially unveiled as Real Madrid manager today after the club concluded negotiations with European champions Inter Milan for the Portuguese’s services – has inserted a summer 2012 get-out clause into his new multi-million Euro contract. After all,  Mourinho’s desire for a return to England is no secret.

Whomever takes over at United – even a manager with Mourinho’s force of personality – will face not only the challenge of leading a huge organisation but Ferguson’s imposing shadow, which pervades every element of the club. Ferguson’s influence, although somewhat diluted through greater delegation, famously extended to every granular detail of the club.

Mourinho is different of course, rarely taking an interest in club matters beyond the first team squad, with little reputation for developing youth or indeed staying at any club for more than a few seasons.

Important then that the club retains a link with the past, with Mourinho’s winning track-record likely to prove attractive to Gill and his paymasters in Tampa.

If – some say when – the former Porto, Chelsea and Inter coach succeeds Ferguson in Manchester then it is United’s triumvirate of playing legends that will offer that crucial role.

United Rant launches new forum

May 29, 2010 Tags: Shorts No comments

United Rant, one of oldest independent Manchester United blogs on the web, has launched a new forum at www.unitedrant.co.uk/forum. The forum, open to all registered users, re-creates the thriving community that existed on the website between 2005-2007. In beta testing mode for the remainder of the summer, the United Rant forum offers a voice to United supporters everywhere.

www.unitedrant.co.uk/forum – register now and have your say!

United Rant, featured on the BBC, Guardian, Maxim, ESPN among many other media, has been live since 2004 and established a reputation for independent thinking.

Say what, Mr. Gill?

May 29, 2010 Tags: , Opinion 33 comments

Manchester United chief executive says there will be no Wayne Rooney sale to Real Madrid this summer, with money also available for further player signings if Sir Alex Ferguson wants them. Well he would, wouldn’t he? The ceo who cries wolf but really just wants season ticket and box sales before supporters realise the game is up!

For while United may well spend this summer – there is theoretically a £75 million credit card facility available to Ferguson – the club’s business model is so massively leveraged that it is now hemorrhaging money from every pore.

Gill remains tight to the party-line, claiming Ferguson is under no pressure to reign in the spending this summer or say anything to the contrary.

“The money is there,” Gill told the Manchester Evening News.

“People say Alex is saying that because he has to. Anyone who knows Alex Ferguson knows he wouldn’t say that if he didn’t mean what he said.

“We are not in a situation whereby Alex is restricted in what he wants to do with the club and his methods as a manager.

“We have never said: “You can’t do that, we have to pay interest on the debt.

“People don’t believe it. We never said to him: ‘You can’t go for that player because he’s too much’.”

Gill’s problem, with United’s financial predicament now exposed by the January bond issue, is that few take the 52-year-old executive’s word at face value.

Tellingly some analysts now believe that player sales are deeply ingrained into the club’s underlying business model. It’s hardly a surprise to fans following Sir Alex’ statements on the transfer market in recent weeks, with the Scot not only forced to shop at the bottom of the market but specifically required to buy players that retain a resale value.

The question fans must ask is why acquisitions require a resale value if the club isn’t de facto prepared to sell?

It’s a new paradigm that only the hugely naïve believe will have no lasting effect on United’s transfer strategy, with the club losing more than £66 million on non-football related expenses in the last quarter alone.

“The loss shows that the business model doesn’t work unless there are player sales,” Philip Long, partner at PKF accountants and business advisers,told the Guardian newspaper today.

“It’s an absolute mess – when the full-year interest is accounted in and there are no items like last year’s sale of Ronaldo, what’s going to happen?”

It’s a question that needs no answer.

Few believe that Rooney, United’s most valuable asset, will leave this summer, with the former Everton striker settled in the North West.

Indeed, optimists could point to the ‘guided’ net £25 million per annum transfer budget available to Sir Alex, plus the money from the sale of Cristiano Ronaldo last summer.

In reality if Ferguson spends anything this summer the pressure to sell leading players in a year’s time – before the club files the 2011 year-end accounts  – will be overwhelming.

Indeed, with the Payment-in-Kind (PiK) loans moving from 14.5 per cent to 16.5 per cent in August the smart money is on the Glazer family drawing down both the £70 million cash and the £6 million special management fees provided for in the bond document.

Those fans seeking a marquee signing this summer need only look at the numbers, with United sitting on a cash pile of £95 million set to lose 80 per cent of its value in the coming weeks.

While that raid will happen fans are now unlikely to discover the truth until the Autumn, with any cash removal taking place after the financial year-end on 30 June and therefore reported at the end of November.

As the Americans love to say: ‘you do the math’.

MUST: supporters can remove Glazers

May 28, 2010 Tags: , , Shorts 13 comments

MUST has accused the Glazer family of panicking on the day that chief executive David Gill dismissed the green and gold protests, while the club released its Q3 financial results. MUST, which is 160,000 strong, claims that the supporters can turf the Glazer family out of Old Trafford, despite the Red Knights’ bid now effectively dead.

“Not For Sale – that has a familiar ring to it. Of course the last time Manchester United was ‘Not For Sale’ was back in 2005 and what happened next – the Glazer family bought it,” MUST chief executive office Drasdo told Goal.com today.

“It is clear from the reactions on the Manchester United message boards that supporters are not buying into the spin coming out through the Glazers’ PR machine.”

“The Glazers are clearly panicking over the powerful Green and Gold campaign, the growing opposition amongst supporters and the threat of a mass non-renewal of season tickets from supporters.”

Drasdo went further claiming – despite the Red Knights’ inability to mount a bid so far this summer – that the Glazer family is running scared of supporter power. The Glazer family’s United States-based property business is also under financial pressure, according to MUST.

“They know that supporters have the power to remove them and they clearly fear that the anger amongst supporters at the millions they’ve taken out of our club has driven many beyond breaking point,” added Drasdo.

“We know their US businesses are in major financial difficulty and there is huge unrest at their American Football franchise too with fans up in arms refusing to renew season tickets due to lack of investment by the Glazers. Sounds familiar?

“If the club really isn’t for sale why would they need to say anything at all? Why are they so concerned about telling everyone they don’t want to sell? If they don’t want to sell they can simply reject any offer. It sounds like the gentleman doth protest too much.”

Gill lashes out at fans as sales dept make threats

May 28, 2010 Tags: , , Opinion 5 comments

David Gill has launched another scathing attack on Manchester United’s green and gold protest campaign, dismissing the scarf wearing supporters as a minority while predicting its demise. Speaking to the Independent newspaper, Gill argues that fans do not understand the protest and are never happy despite success.

Gill’s interview comes as United’s commercial department warns executive seat holders not to delay renewing, with the deadline looming on 31 May. Published today, it is not the first time United’s chief has hit out at the green and gold campaign but the strength of the Surrey-born ceo’s attack may take supporters by surprise.

“I think that [the green and gold] minority will go away. I see people from Asia walking out of the megastore with a red and white scarf on and they just assume they [green and gold] are official scarves and go and buy one,” Gill told the Independent, presumably from the safety of his Old Trafford office and not the forecourt.

“I think there is an element of that. A lot of people understand what it means but a lot of them don’t.”

Gill’s tactic to dismiss the protests, claim the club’s finances are sound and suggest that Sir Alex Ferguson has money to spend in the transfer market is not new. Indeed, the ceo’s interview comes a week after chief of staff Edward Woodward invited leading national journalists to meet at United’s commercial offices in Pall Mall, London.

“They are not going to change their opinion even if we win three Champions League titles in a row,” adds Gill of the 160,000 fans that have joined the Manchester United Supporters Trust (MUST) this season.

“We couldn’t have been much more successful in the last three years: we won the league, we were Champions League winners and runners-up and we won the Carling Cup, but they are never going to be happy.”

United finished second to Chelsea this season, while losing in the Champions League quarter-finals – for which Gill took a public dressing down by his American paymasters – and third division Leeds United dumped the reds out of the FA Cup.

With the season ticket and executive renewal deadline in the next fortnight, box holders yesterday received a letter boasting of a significant hospitality waiting list. Stating that the letter “is a warning not a threat” United’s Head of Client Relations claims that hospitality facilities “will be released to the waiting list on 1 June.”

Aside from the unfortunately threatening tone, it is odd that the bond prospectus released in January notes significant unoccupied executive facilities at Old Trafford last season, with the worldwide recession hitting the club hard.

“For the 2009/10 season, reduced demand for executive and box seats has resulted in approximately 16% of those facilities (by value) remaining unsold as at 30 September 2009, compared with just over 12% unsold at the same stage in the 2008/09 season,” the club told potential investors.

This comes as the club released its Q3 financial results through Manchester United Finance plc, showing cash reserves of more than £95 million on a sharp increase in year-on-year Champions League media revenues.

While many feared the Glazer family would exercise its option to pay down Payment in Kind (PiK) debt most analysts now expect this to come after the end of the financial year on 30 June, meaning the results will not be released until August 2010. Well after the 13 June season ticket renewal deadline.

The results showed year-on-year gross debt down at £520.9 million, although the quarter-on-quarter debt was up, reflecting conversion of bank to bond debt. This does not include the PiK debt, which totals more than £200 million and will be paid down from club cash reserves.

The results also coincide with another reiteration in the Glazers’ stance that the club is not for sale.

“The Board notes recent press speculation regarding a possible bid for Manchester United. The owners remain fully committed to their long-term ownership of the club. Manchester United is not for sale and the owners will not entertain any offers,” said a club statement.

With United’s effective debt now at more than £720 million supporters can only hope the family changes its mind, perhaps by the time the BBC’s Panorama programme on the club’s spiralling debt goes live on 7 June.

Otherwise fans may need to wait for UEFA’s financial fair play regulations to kick in for the 2015-16 season, which include the provision to exclude from competition any club with net debt greater than revenues. Net debt is gross minus liquid assets, including cash.

United’s net debt is more than £425 million with revenues at £278 million for the last reported full financial year.

Poll: Should David Gill resign now?

May 28, 2010 Tags: , Polls 35 comments

David Gill, the Manchester United ceo, has launched an extraordinary attack on thousands of fans who wear green and gold at Old Trafford, dismissing scarf wearing supporters as a “minority” who “don’t understand” why they’re protesting and will “never be happy.” It’s not the first time Gill has lashed out at the fans he no longer speaks to.

But with other ceo who consistently insults his customers normally asked to resign, should Gill now go?

Should David Gill resign now?

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Hernandez scores against Dutch and FA

May 27, 2010 Tags: Shorts 5 comments

New Manchester United striker Javier Hernandéz scored against Holland in a pre-World Cup friendly and with the FA for a work permit. A day after the 5′ 7″ striker headed home a consolation goal in Mexico’s 2-1 defeat to the Oranje, United was forced to plead ‘exceptional talent’ in order to secure the required home office documents.

22-year-old forward Hernandéz joins United on 1 July but it was dependent on the FA granting a work permit today. Typically non-EU nationals must have played at least 75 per cent of his country’s internationals over the past two years. It’s a criteria that the nine-cap striker falls well short of, forcing United to ask for special dispensation under the exceptional talent rule.

Strangely United called off the deal for Serbia youngster Adem Ljajić earlier this year, claiming that the FA is now reluctant to use the exceptional talent rule after widespread abuse.

While Untied supporters saw Hernandéz as a brief second-half substitute against England on Monday, the Guadalajara-born player scored his fifth goal in nine internationals against Bert van Marwijk’s Dutch side, with Mexico due to face France, South Africa and Uruguay in the World Cup Group A.

Weak UEFA rules offer little protection

May 26, 2010 Tags: , , , Opinion 4 comments

UEFA will ratify its new financial regulations tomorrow, trumpeting them as a step forward in fair play. But the rules, which essentially outlaw the sugar daddy subsidisation of football clubs, will do little to prevent the kind of leveraged takeover that has placed Manchester United in more than £700 million debt.

UEFA will phase in the new rules after President Michel Platini finally found agreement on the long-standing proposals for financial fair play in European football. From 2012-13 onwards clubs must not spend more than they earn if they wish to play in European competitions, although the governing body will introduce the regulations over an extended six-year period.

UEFA denies that it is trying to create greater diversity in competition winners, rather to ensure better financial management in football, with no Chelsea or Manchester City-style subsidisation.

“We’re not trying to level the playing field,” a UEFA spokesperson told Reuters today.

“We want to make sure that the middle-ranked clubs don’t go spending millions which they don’t have as they try to compete with the big clubs.

“The underlying principle is that clubs cannot repeatedly spend more than their generated revenues.”

Between 2012-13 and 2015-16 total losses at any individual club must not exceed €45 million – effectively €15 million per season – unless club owners put money into the organisation as hard equity. In the following three years the total losses cannot be more that €30 million and by 2020 UEFA hopes all clubs will run on an even keel.

The rules do not cover infrastructure investment such as that in youth facilities, training grounds or new stadia, which leaves Arsenal in the clear over the Emirates Stadium but Liverpool in the red due to interest payments. Chelsea and City fall foul based on the continuing losses at each club, although Sheihk Mansour and Roman Abramovich have sought to convert debt into equity this season.

UEFA will preclude clubs that do not meet the rules  from European competitions.

Today a United spokesperson insisted that the club meets the new regulations, with pre-tax profits around £91 million during the last full accounting period and revenues rising sharply. But this is tempered bythe knowledge that the club’s parent company, Red Football Limited, would have made a huge loss had it not been for the sale of Cristiano Ronaldo last summer.

While the club itself is increasingly profitable, the mountain of debt interest has a draining effect on the books and the parent company will continue to lose money for the foreseeable future.

Moreover, the UEFA regulations seemingly do not cover Red Football Joint Venture Limited which holds the Payment in Kind loans that the club is now committed to paying down after the January bond issue. The Glazers can effectively milk the club with impunity despite the new rules.

“We support the financial fair play measures. We are confident that we pass them and that we will continue to do so,” a United spokesperson added today as part of the ongoing public relations drive by the club ahead of the 13 June season ticket renewal deadline.

Indeed the regulations are not designed to cut indebtedness per se but the subsidisation from rich owners that has resulted in massive losses at Chelsea and Manchester City. Around two-thirds of Premier League clubs and 50 per cent across Europe will fail to meet the regulations according to football analysts.

“The many clubs across Europe that continue to operate on a sustainable basis are finding it increasingly hard to co-exist and compete with clubs that incur costs and transfer fees beyond their means and report losses year-after-year,” Michel Platini claimed recently.

“For the health of European club football, those many clubs that operate with financial discipline and sustainable business plans must be encouraged

“This is why the entire football family requested and expressed full and unanimous support for the principles of financial fair play.”

Indeed, the football community now recognises that outside intervention will ensure clubs, such as Portsmouth, do not spend themselves into oblivion, while City, Chelsea, Real Madrid and Barcelona can no longer lean on wealthy benefactors or the banks without consequence.

It is perhaps ironic then that United’s position in European football would be strengthened by the new rules were it not for the Glazer family’s ownership of the club. Compared to leading domestic and European rivals, United is highly profitable but for debt interest payments. The same is true of the Premier League as a whole, which generates more revenue than major European rivals.

Platini’s is not an anti-English agenda.

But this is the UEFA regulations do fall well short of the over arching framework for football finances that many in the community have called for. United’s debt will likely reduce the club’s competitiveness over time, with transfer and wage spending only permissible once the club has made interest and debt payments.

In the longer term should the Glazers ever wish to pay off the bond, United must raise revenues, sell players or reduce spending in the transfer market to stay within the regulations.

Indeed, the new rules should only increase the anger of fans, with the £437 million wasted by the Glazer family so far dwarfed in the next seven years by interest, dividends and management fees.

Platini will obtain greater fair play in European competition but United will benefit little from it.

This bid isn’t dead, it’s just pining

May 25, 2010 Tags: , , Opinion 10 comments

To paraphrase, Manchester United fans may wish to register a complaint. The Red Knights’ bid that fans bought into not six months ago is dead. Passed on, no more, ceased to be and gone to meet its maker. For the 150,000 fans who signed up to MUST and waved green and gold protest scarves this bid is bereft of life. Rest in peace!

At least that’s what the BBC’s Business Editor Robert Peston would have us believe, blogging today about the investors who are unwilling to put money into a Red Knights bid this summer. Peston’s story, following so quickly on from Daniel Taylor’s exposé in the Guardian last week of machinations within the consortium, is a body blow for those who wish to see the Glazers depart Old Trafford this summer.

Former stockbroker and Financial Times correspondent, Peston has strong links into the investment community but his failure to quote a source is telling. The wider investment community may well see no value in a bid for United, which is massively over-leveraged at a time when the financial sector barely dares to raise its collective head over the parapet. The Knights’ bis was never purely about economics.

Peston’s failure, much like that of Taylor, is the frustrating anonymity of sources. While the Guardian man claims the word of senior Knights who chose to break rank, Peston’s highly ambiguous piece adds little clarity to an increasingly murky picture.

Interesting then that Peston’s BBC colleague, newly appointed Sport’s editor David Bond, added to the debate today, having been briefed by the Glazers’ commercial team this week. Bond argues, with a hugely embarrassing misunderstanding of the facts, that the Glazer family is more interested in building a team than paying off Payment in Kind (PiK) debts this summer.

It’s an argument that falls down on even the most superficial of analysis. After all if the Glazer family had no wish to pay down the PiK debt then the January bond issue had the effect of adding to the club’s interest bill and little else, while the PiK debt balloons to more than £600 million by 2017.

In truth while the Glazers will take large amounts of cash out of club funds this summer it will probably take place after the quarterly accounts are published on 28 May. It makes little sense for the Glazers to tacitly admit there will be no investment in the playing squad this summer before the 13 June season ticket renewal deadline.

If Bond is right, then the Glazer family will surely release millions for investment in a leading player prior to  the World Cup’s opening match on 11 June. Few with even the most basic financial understanding believe the BBC man.

Even if the Knights’ bid is permanently dead – the group itself has not yet publicly admitted defeat – the Glazers have reacted to events on the ground by freezing season ticket prices after five years of huge rises. It cost the family just £1 million for the significant media publicity.

Indeed, the phony PR war between MUST and the Glazers has taken a turn in the past few weeks with first the ubiquitous ‘Glazer family spokesperson’ and now the club’s chief of staff regularly briefing journalists against the Knights. PR 101 – create fear, uncertainty and doubt.

With a huge vacuum created by the Knights’ inability to communicate the media have lapped it up.

Meanwhile, Sir Alex Ferguson continues repeat the same tired line that there is no value in the transfer market while competitors seek to bolster their playing staff. That’s one parrot which remains alive at least.

First look at Chicharito

May 24, 2010 Tags: , Opinion 9 comments

When Mexico’s Javier Hernandéz takes to the Wembley field tonight it’ll be the first opportunity given to most Manchester United supporters to assess the striker’s ability ahead of a July move to Old Trafford. The £7 million forward, signed from Chivas Guadalahara in April, is likely to start tonight’s friendly with England at the national stadium.

Hernandéz, in Mexico’s 30-man provisional squad for the FIFA World Cup in South Africa this summer, has already scored four times in seven matches during the 21-year-old’s blossoming international career. Granted friendlies against Bolivia, New Zealand and North Korea may not reach the heights of the World Cup this summer but Hernandéz’ performances are such that he will carry the scoring burden for the talented Mexicans into the tournament.

The Guadalajara-born striker comes with a strong family pedigree in international football too, with Hernández’ namesake father a member of Mexico’s World Cup squad in 1986 and grandfather at the 1954 tournament.

Nicknamed Chicharito – the little pea – Hernández will come face-to-face with new team-mates Wayne Rooney, Rio Ferdinand and Michael Carrick tonight, with the trio probably asked to start by Fabio Capello in an experimental home line-up.

The Italian’s side start as favourites but the well-drilled Mexicans – playing a ninth friendly of the year – should provide stiff opposition on Wembley’s cabbage-patch pitch.

While Capello assesses the fitness and form of the United squad members in his group, supporters closer to Old Trafford will have their eyes on Chicarito, with the over-reliance on Rooney all too clear during the closing weeks of last season.

The 5′ 7″ striker is a man in form, with 21 goals in 28 club appearances this season but speaks with the reverential air of a player not yet comfortable with his new-found celebrity status.

“I got goose-bumps when I realised I would be joining Manchester United,” Hernandez told reporters this week.

“These are the things you dream about. I longed for a move to Europe when I was a kid watching lots of football on television. In Mexico, United have a huge following.

“Suddenly I’m going to be playing with the players I know from PlayStation and television. I’m living a dream. I thank God I am living it.

“I’m just full of gratitude to those who helped me accomplish this. I want to do great things here.”

Yet the striker may need to lose his inhibitions if he is to make an impact on the bigger international stage and at Old Trafford next season. With incoming transfers limited, Hernandéz will start as one of seven strikers on United’s books next season.

Rooney’s place in Sir Alex Ferguson’s side is assured of course but question marks hang over five other competitors for a striking berth at Old Trafford. Dimitar Berbatov’s goalscoring problems are well documented, while Mame Biram Diouf, Danny Welbeck, Michael Owen and Federico Macheda all found their campaigns disrupted by injury.

Hernandéz is likely to start United’s campaign as first back-up to Rooney, Berbatov and Owen, with Mexico’s tough World Cup group offering the striker a potential berth in the Reds’ North American tour this summer. Ferguson will give all World Cup players 28 days off but with Mexico drawn against France, Uruguay and hosts South Africa an early exit is not unrealistic.

Indeed, the 21-year-old may need to grab that opportunity if he is not to befall the fate of so many young strikers at Old Trafford. Supporters tonight will get a first chance to pass their own judgement.