Tag David Gill

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Summer of upheaval

May 26, 2013 Tags: , , Reads 91 comments
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There is peace even in the storm ― Vincent van Gogh, 3 November 1876

There are times, when chaos abounds, mused Rudyard Kipling in sport’s most over-quoted poem; that those with clarity of thought will come to the forefront at times of crisis. And while Manchester United is in no crisis, it is not yet clear whether the club will emerge from a significant period of change damaged, or otherwise.

Let there be no doubt: United faces the most challenging summer in more than 20 years, with Sir Alex Ferguson’s departure just one of several major changes at the club as the season ends. While Ferguson’s retirement brings to an end more than 26 years of the Scot’s management at Old Trafford, he is also followed out of the door by long-time chief executive and leading ally David Gill, 16 years a United employee. In their wake the pair leaves a raft of changes in both coaching and executive management that will test the club’s contingency planning to the fullest.

Indeed, by the time Ferguson officially departs his job on 1 July four executive positions and a handful of coaching roles will have changed hands at Old Trafford, threatening short-term disruption that could undermine United’s planning for the 2012/13 campaign.

The question, of course: through the whirlwind of change, who will emerge with clear-sight to minimise the impact of transformation?

In Ferguson’s stead comes Everton manager David Moyes, to mixed reception, while youthful Ed Woodward is promoted to executive vice-chairman as Gill’s effective replacement. But the cascade of change runs deep, with Richard Arnold and Michael Bolingbroke also changing roles in the executive team.

Moyes has wasted little time instigating widely rumoured plans to shake up United’s senior coaching staff, leading to the departures of Ferguson’s assistant Mike Phelan, and respected goalkeeping coach Eric Steele.

There may be more bloodletting too. Reserve team manager Warren Joyce’s quip at the club annual awards ceremony last week that he is as yet unaware of his employment position tells a key story. Nervousness abounds ahead of Moyes official start on 1 July; six weeks shy of the new campaign.

After all, a new man at the top certainly spells change. Moyes may now seek to bring in his number two at Everton, Steve Round, while rumours abound that Phil Neville will join Old Trafford’s coaching team. Paul Scholes has not formally been offered a position in the backroom, although Sir Alex is a leading proponent of the 38-year-old’s coaching ability.

Round is widely respected in the football community, although the same is not quite true of Chris Woods, Everton’s goalkeeping coach, who may also join United. The outstanding job Steele has performed working with David de Gea over the past two years has seemingly been forgotten before the ink has dried on Moyes’ new contract.

Nor is it yet clear whether Ferguson’s departure will prompt a rethink from Rene Meulenstein; the Scot’s principle lieutenant alongside Phelan. Meulenstein’s short managerial spell in charge of Brondby six years ago may represent unfinished business to the Dutchman, especially if Moyes reduces the coach’s scope.

Meanwhile, Phelan may finally take a crack at management – previous assistants including Brian Kidd, Steve McClaren and Carlos Quieroz have found the yearning to lead too great a draw.

It is at least now clear that Moyes is not prepared to work within a system already created, principally of Ferguson’s design. The younger Scot is a man with his own ideas.  The former Everton manager is known to be a proponent of meticulously detailed planning, sports-science and boot-camp style fitness. There will certainly be a change of emphasis at Carrington next season.

Similarly, Moyes’ thinking on the style and substance of his team may prompt change in the playing staff. Top of the list is Wayne Rooney’s future, with the 27-year-old having asked Ferguson for a transfer earlier this spring. While the noise coming out of Old Trafford is that the new man will work with his former protégé, behind the scenes the club has sought an exit for the £27 million striker. A bid for long-standing target Robert Lewandowski hinges on Rooney’s departure, or otherwise.

Meanwhile, there have already been inevitable press reports linking United to an imminent bid for Everton’s combative forward Marouane Fellaini. The gossip may hold some substance, although it is surely unthinkable that Moyes will deploy the Belgian in the forward role he occupied at Goodison Park for most of last season.

Over in the boardroom executive changes are only likely to accelerate United’s hugely aggressive global search for cash. Gill’s departure, which is certainly linked to Ferguson’s – an announcement coming just days after the Scot told his ally last February of firm plans to retire  – means significant promotion for three of the Glazer family’s key commercial team.

Woodward, as the Glazer family’s premier executor of United’s perpetual remit to create new revenue sources, will offer continuity of a sort. Although any temperance to rampant commercialism that Gill brought to the party over the past seven years – an argument often put forward in the 57-year-old’s defence – will now surely evaporate.

The club will still benefit from Gill and Ferguson’s part-time loyalty though. Debt, it seems, wasn’t Gill’s road to ruin – just a ticket into UEFA’s inner circle and a lucrative non-executive position. Meanwhile, Ferguson will reportedly be paid £100,000 a day to for up to 20 commercial appearances a season with United’s principle sponsors.

Yet, amid all the change on and off the pitch weight of responsibility for any post-Ferguson failure will fall squarely on Moyes’ broad shoulders, whether that judgement is fair or otherwise.  Which is why there was some surprise at the sharp decision to sack two of Ferguson’s senior coaches, with perhaps more to come.

Amid a summer storm continuity may be Moyes’ best ally.  The question now is whether Moyes’ head is clear enough to steer the club to the peace of safer ground.

Gill’s departure leaves Ferguson isolated

February 21, 2013 Tags: , , Reads 19 comments

David Gill’s surprise announcement on Tuesday, that he is to step down as chief executive of Manchester United after 10 years in the position, comes as a personal “blow” to manager Sir Alex Ferguson, leaving the 71-year-old Scot without a key Old Trafford ally. It is the most serious conclusion to draw from Gill’s resignation, which will take effect after the season has concluded in June.

Gill’s departure comes against the backdrop of the 55-year-old executive’s move into football politics. Gill, who has spent 16 years at Old Trafford first as chief finance officer and then ceo, recently joined the FA as vice chairman, and is applying to join UEFA’s executive committee. He will remain as a non-executive director of the club.

Meanwhile, 40-year-old Edward Woodward, very much the Glazer’s man, will take up his new role with a remit to further strengthen United’s commercialisation strategy. Woodward becomes ceo after a highly successful campaign to broaden United’s commercial reach over the past seven years, which has seen the club’s commercial revenues nearly triple to £117.6 million.

Woodward, formerly executive vice chairman at the club, led the team that globalised United’s commercial reach and diversified the portfolio of sponsors. Under Woodward’s executive leadership United’s aggressive commercialisation is highly unlikely to slow down.

But it is the impact on Sir Alex that is of primary interest to supporters, who have witnessed just three chief executives during Ferguson’s reign; Gill, Peter Kenyon and Martin Edwards. Indeed, Gill has become Ferguson’s close confidant in the past seven seasons, and a central link between the playing side of the club and the detached Glazer family in Florida.

“I have worked alongside the finest manager in the history of the game and been part of what I consider to be the best club in the best sport in the world,” said Gill in a statement released shortly after United informed the New York stock exchange on Tuesday.

“I have always been conscious of the fact that, as a member of staff, I was always just a temporary custodian of this marvellous institution. I am also of the view that all businesses need to refresh themselves with new management and ideas and after 10 years in charge I believe it is appropriate for someone new to pick up the baton. I’m delighted Ed has accepted the role.

“I am looking forward to continuing my involvement on the club board. And I hope to be able to make a contribution to the game on a wider national and European level.”

Without Gill, Ferguson’s political position at the club is challenged. After all, it was Woodward, not Gill, that was the primary driver of United’s IPO roadshow last summer, at one point promising potential investors that the Reds will not spend more than historical norms on transfers and wages. It was a promise that many people took at face value – an average net transfer budget of less than £20 million per season.

Recent analysis by blogger Andy Green forecasts that United’s surplus cash flow could reach more than £100 million in the coming years, putting Woodward on a collision course with Ferguson over budget, should the septuagenarian Scot remain at the club.

No wonder Ferguson admitted his dismay at Gill’s departure, with the man dubbed ‘Safe Hands’ no longer in the boardroom to facilitate his manager’s relationship with the American owners.

“I have been at United for over 26 years and for 23 of those years my boss has been one of only two men: Martin Edwards, who brought me to the club, and David Gill,” said Ferguson on Tuesday.

“Of course we have had a million arguments, but I have always enjoyed them because I know that David has two great qualities: he is straight and he always puts Manchester United first. No disagreement is ever personal with him. He always wants the best for United, whether it’s the players, the training ground or the staff.

“Him stepping down is a big loss to me but the fact that he is staying on the board encourages me that the reason for his departure is heartfelt, that he believes it is time for the club to move on. If I could have found a way of persuading him to stay I would love to have done that.”

In a decade as ceo, first under the Plc regime and latterly working for the Glazer family, Gill has generated significant controversy. Gill was integral to much of United’s first wave of commercialisation, provoking criticism from the media for United’s marketing approach, and from fans for the evolving nature of the Old Trafford matchday experience.

Gill also led the board’s strategy to increase ticket prices ahead of the Glazer’s leveraged buyout, justifying rises under the mantra of retaining the club’s ability to fight off a hostile takeover. It did little good.

Most controversially, Gill initially rejected the family’s approach for full control of the club in 2005, infamously stating that “debt is the road to ruin” and that the Glazer family’s business model was “overly aggressive”. Gill’s hostility soon morphed into support for the Glazer regime once the takeover was completed, although there was little material difference in either debt leverage or business approach.

It takes not a cynic to suggest that Gill’s salary, which has more than doubled since 2005, has bought significant loyalty to the new owners, who have sought to retain the executive’s involvement in a non-executive capacity.

“David has played a significant role in the success of Manchester United in his 10 years as CEO and he can take great satisfaction at all that has been achieved on his watch, both on and off the field,” said Joel Glazer, co-chairman in a rare statement from the family.

“I am very pleased he has agreed to remain on the board, so that his experience and counsel are not lost to us. I hope that the decision he has made will be to the benefit of the game in Europe as a whole, as he seeks election to Uefa’s executive committee.”

Meanwhile, Woodward called his appointment a “great honour,” adding that he is “humbled” to work with Ferguson. Yet, the obsequious words can do little to mask the new chief executive’s remit, which is to drive home the club’s profit goals, generating ever greater margins as the Glazer family seeks to extract equity from the business.

It is an objective that, as one reporter put it on Wednesday, completes the ‘Glazerfication’ of Old Trafford; an entity that now exists primarily to extract profit for its owners, and to be a football team as a by-product.

This process was once anathema to Ferguson, the socialist ship worker’s son, now working for the game’s most commercially geared organisation and under the leadership of the Glazer’s prodigy.

Liar liar Gill’s on fire as market pours cold water on IPO

August 10, 2012 Tags: , , Reads 108 comments

There was something vaguely sickening about the spectacle as Manchester United’s chief executive David Gill, adorned by two grinning Glazer brothers, rang the opening bell at the New York Stock Exchange this afternoon. Brothers-in-arms to a less than noble cause: the continued fattening of the Glazer wallet at United’s expense.

Indeed, the sight of Gill lauding it up Wall Street this Friday, in all its Faustian ignomy, brought only renewed anger from United supporters critical of the Glazer family’s highly geared ownership. Not least because the 55-year-old executive repeatedly spun utterly shameless, yet habitual, lines about the Glazer family’s impact on United during the day. In a media war, amid a disappointing listing for the Glazer family, Gill remains cognisant of unremitting and disingenuous positivity.

Yet, even as the Glazers’ stock offer fell flat – pricing below lofty expectations, with an underwriter forced to prop up a share price at risk of being dragged down by traders – Gill managed to spin familiar themes. The man who once claimed debt is the road to ruin, now beholden to its devilish charms.

It was, of course, never going to be any different, with Gill long since tied to the Glazer family’s odious abuse of a previously debt-free 134-year-old institution. Even to the laughable extent that Gill claimed he “doesn’t know” whether he will financially benefit from the Glazers now infamous ‘2012 Equity Incentive Award Plan’. Alongside manager Sir Alex Ferguson, who forcefully denied being a beneficiary of the scheme, there is no closer confident to the Glazer regime than Gill.

Yet, on a day as significant as any in the club’s history, shares traded at or around the $14 pricing point all day – way below the $16-$20 the Glazer family had sought – but above, for now, the low-point many analysts have predicted. But with high-frequency traders taking pennies on small trades Friday afternoon the lead underwriter, Jefferies, was forced to make a series of large share purchases at the pricing point to save corporate face. Further drama is surely yet to come.

Gill continued the well-worn pitch though; that United’s is a growth story and that the Glazer family’s debt-fuelled business model has no impact on Ferguson’s team. Few supporters, bar those of Sir Alex’ “real fan” camp, believe any of it. Almost all professional investors shunned an IPO that offers little financial upside.

And despite raising around $100 million less than previous expectations, Gill remained positive on sunny day in Manhatten.

“We’re the biggest sports business in the world,” bragged Gill on CNBC television Friday morning.

“I think you’re buying into one of the world’s iconic brands, playing in the fastest-growing sport in the world. We can demonstrate across all our revenue streams great growth opportunities.”

Shame, then, for Gill’s threadbare credibility that United will post a loss on falling revenues when accounts to June 2012 are published. As ever under the Glazer family’s ownership, United continues to sprint commercially, only to head rapidly backwards on the altar of debt.

And it is this debt, together with the American family’s decision to cash in on the IPO rather than reduce an onerous burden on the club, which continues to anger supporters. With just $233 million raised from the New York listing, barely £65 million will be removed from United’s £427 million debt pile. In fact the IPO will have such little effect on interest paid, says analyst Andy Green, that it will take United two years to break even on the offering’s $12 million costs.

“Roughly 65 million to 60 million will come off the debt level,” Gill claimed.

“I think it’s important to note that even at the prior debt levels we were comfortable they weren’t impinging with what we were doing from a football perspective. The level of debt in the club since they have taken over hasn’t had an impact on what we have done in the team. We fully understand, and the owners fully understand, that what happens on the pitch is crucial and we will make sure that we have sufficient funds to invest in the team going forward.”

Many supporters will question whether the £20-25 million annual net spend in the transfer market promised to investors during United’s pre-IPO roadshow is “sufficient” in a market where Manchester City, Chelsea and now Paris Saint German repeatedly outbid United’s highly constrained financial operation. It is, of course, well below the £100 million ‘cash profits’ the club makes before debt takes its hold.

No wonder then that the Manchester United Supporters Trust (MUST), which has called for a boycott of the club’s commercial sponsors, damned a failing IPO.

“As it stands the club is valued at around one-third less than their expectations but many commentators expect the price to slide over the next two weeks,” said MUST chief executive Duncan Drasdo.

“We maintain this IPO will be bad for investors, not just the club and its fans, and we’re confident time will show that to be true. We remain totally committed to fighting for fan ownership.”

Indeed, highly critical media coverage in the lead-up to Thursday’s pricing, swayed by pessimistic analyst prognosis, is likely to have steered the investment community away from United’s listing. The smart money ran from the Glazer family’s opaque pitch, although local fan-driven demand may have ensured a full book at a significantly reduced price.

Still, the Glazers’ lieutenants continued to boast of strong demand in the face of all evidence, with vice chairman Edward Woodward claiming a successful investor tour had driven demand. And he did it with a straight face too.

“The understanding that U.S. investors have around sports business, given it’s the most developed sport market in the world, has been a benefit,” Woodward told Bloomberg.

“We had a fantastic response from the investor base in the U.S. We found that a number of people came in with a strong level of interest, which was tweaked higher when they heard our story. It’s very easy for people in the U.S. to grasp the huge opportunities around merchandising and digital media.”

The roadshow is now over, of course, and on open trading many analysts expect the market to correct a $14 price that values United at around $2.3 billion – £1.5 billion – or more than 19 times earnings before tax and other deductions. It is a multiple more commonly found among high-growth technology companies, not hundred year-old institutions growing at just seven per cent per annum.

Yet, this is unlikely to be the final story, with the Glazer family remaining entrenched at Old Trafford, slowly milking the club for their own financial gain. The “six lineal descendants” of Malcolm Glazer walk away from the offering, no matter how limp, with voting power untouched, and $110 million in the family bank account.

There may be more to stock issued in the future too, with reports that the family’s failing US business empire has caused meaningful financial strain. There remains significant room for the family to sweat the asset further, having sold just 10 per cent of shares to date. As ever, keeping just one step ahead of the banks is the family’s primary goal; United’s health only a passing concern.

Whether the IPO is the first step in the Glazers’ exit from the club remains moot, with the family likely to sell up when maximum value has been reached. Yet, the family’s decision to list rather sell to Qatar or other interested parties in 2010 – somewhat ironically the Qatari’s reportedly bid £1.5 billion for the club – means price is at the vagaries of the open market.

And with United’s share price marginally down in the final hours of opening day trading its a capricious market that no volume of Gill spin, or Glazer engineering, will buck.

Where football ends, Gill begins

November 11, 2011 Tags: , Reads 13 comments

It has become a truism that international breaks are dull, and there are far too many of them. That FIFA bigwigs, holed up in their Zürich glass box, deigned yet another one take place this November – the third of the current season – is testament to the battle raging in football between the club and international formats of the game. Any international football, even the most pointless, underscores FIFA’s importance in the body’s collective mind.

And so while Euro 2012 Play Offs take place this week, the Football Association has arranged two utterly meaningless friendlies at Wembley. Manufactured arguments between the FA and FIFA about symbolic Poppies aside, Fabio Capello will gain little from England’s thrashing by Spain on Saturday, or the bore draw with Sweden in the coming week. Capello’s side is little better than average, a fact no friendly double-header is likely to alter. Meanwhile, there’s a large bill to pay on Wembley’s development, and the bumper crowd ensured by World Champions’ visit has the FA’s bean counters grinning all the way to their stadium office.

FA board member David Gill presumably approves. Indeed, international week is also the time Gill predictably tunes into MUTV to update the masses with the latest from camp Glazer. This week Gill pledged that whomever follows Sir Alex Ferguson into the Old Trafford hotseat must adhere to a club policy of investing in youth. The chief executive didn’t state that Fergie’s successor must understand the phrase “there’s no value in the market,” but he wasn’t far short. Like England’s prestige friendly with Spain, it’s all about heritage and tradition, you see.

“We are a great club whose values go back in history to our heritage to the ’50s and ’60s and the last 25 years with Alex,” Gill told MUTV, forgetting the 70 years of history before Sir Matt Busby took charge of the club in 1948.

“To continue with that, the new manager needs to understand those values and the vision for the club and must buy into that. The important point to make is the new manager, whenever that may be and whomever that may be, will be taking over a great, great club, in a great, great sport and Alex, in particular, will want to make sure he inherits a great squad. That’s our goal – to make sure when the new manager comes in he does have a great squad to work with in terms of age and profile.

“Alex’s legacy to United is to my mind very clear – delivering an unprecedented period of success in the Manchester United way. By that, I mean attractive football using young players – both homegrown and buying players when necessary like Cristiano Ronaldo and Wayne Rooney, but actually developing our own players. That record is there for everyone to see and that legacy is very clear also.”

In that Gill presumably means a commitment to the current policy of acquiring only younger, cheaper, players in the transfer market, while eschewing fees spent on those over 26. It is a policy that, guided by Ferguson’s genius, has allowed the Glazer family to taste success despite largely starving the club of transfer funds. The ‘Ronaldo money is available’ you see, but the market is ‘so over-heated that only young players will do.’ In any case ‘United’s tradition is to focus on youth’, forgetting the six occasions on which the club has broken the British transfer record during Ferguson’s early reign.

Whitewashing of history aside, Ferguson’s successor will bring no similar guarantee of success with the same policy. After all, the Scot has squeezed more out of his relatively limited squad over the past five years than any mere mortal could expect to. It is a period in which Ferguson’s true worth has genuinely shone through. Without the deluge of talent the class of 1992 brought, or the relative wealth of the early 2000s, Ferguson has still delivered a succession of major trophies. In this week that club, supporters and manager have been celebrating Ferguson’s 25 years in charge at Old Trafford, this is worth noting.

“I believe in young people,” Ferguson told his favourite media outlet Sirius XM this week. “You need a foundation at a football club and that is vital. You can build a first team, but you really do need the back-up and the foundation to make it a football club.

“With all the young players that come to us in their formative years, you have got a job to make them good footballers but also to show them how to grow up the right way. Cristiano came to us at 18, just a young lad from Portugal who didn’t know the country. But he learned the language, adapted very well and he has turned out fantastically as a human being, just as was the case with the Nevilles, Scholes, Beckhams, Giggs and all those lads.”

Ferguson’s selflessness in building a squad for the future is relevant, although there is, of course, strong evidence that the Scot has little choice. With money released this summer largely down to retiring stars removing themselves from the wage bill, Ferguson’s successor may well begin life with a serious financial handicap.

Indeed, of the leading candidates to replace Ferguson none – save perhaps for Pep Guardiola – has a history of building teams based on home-grown talent. In that the Spaniard has benefited hugely from Barcelona’s very long-term policy of investing in La Masia, together with some very deep pockets for expensive acquisitions. Meanwhile, José Mourinho has largely built a youthful-looking Real Madrid team in the transfer market, while Laurent Blanc, David Moyes, and Ole Gunnar Solskjaer have no such heritage at all.

It all adds up, says Gill, to a “difficult” choice in replacing Ferguson, when the Scot retires at some point over the next three years. It probably doesn’t require a FIFA-sized committee to work that one out.

Gill promises investment as Reds aim to close Barça gap

May 30, 2011 Tags: , , , Reads 64 comments

Manchester United’s thumping defeat to Barcelona on Saturday night threatened to spoil the Reds’ victory parade through the city today. Even so around 150,000 lined Manchester’s streets for the party, which celebrated a 19th domestic title, if not the European Cup. Yet, as United’s supporters delight in another Premier League triumph – the 12th of Sir Alex Ferguson’s Old Trafford reign – questions have inevitably been drawn of the club’s ability to compete at the very highest level. A level to which Barcelona set a new standard on Saturday night.

Indeed, the manner of Barça’s victory at Wembley was so overwhelmingly superior that United’s response cuts to the very heart of the club’s place in Europe’s hierarchy. Runner-up in Europe’s elite competition is no shame, of course, but the gap between United and the best is evidently far wider than hoped. The question of whether United can close that gap is one to which supporters will look for answers over the summer.

The Catalan giant’s success is based on a straightforward two-sided strategy; build the most productive youth academy on the planet, while investing heavily in the transfer market. Indeed, while six of the starting team at Wembley were trained at La Masia, Barcelona’s much-lauded academy, the club has also invested hugely in the transfer market over the past decade, while also baring the largest wage bill of any football club.

In response United has only two options: plan for immediate needs and work towards a better tomorrow. In this United’s historic strategy is not wholly different to Barça’s, with the Reds seeking to augment lavish spending with talented youngsters trained at Carrington. More recent austerity has seemingly curbed the club’s net transfer spend at a time when the academy is producing a relatively limited crop of first-team-ready youngsters.

In this both United’s chief executive David Gill and his club manager offered hope and a prescient warning today. Gill, a staunch supporter of the Glazer regime which has drained around £400 million out of the club in the past five years, hinted at heavy investment this summer. Meanwhile, Ferguson warned that Barcelona will continue to enjoy a structural advantage if the Football Association continues to control youth development policy.

“It will be a busier than usual summer this year,” Gill told MUTV, with United set to confirm deals for David de Gea, Ashley Young and Rafael Varane in the coming week.

“I will be going away at some point in June and be back for the start of our tour but I will be on with player stuff for the next few weeks I am sure.”

The question on most fans’ lips is whether Gill and his paymasters will sanction heavier spending on proven talent, in addition to youth’s promise. After all, while Barça has produced a rash of outrageously talented players from La Masia, the club also spent around €90 million on Danni Alves, Javier Mascherano, Eric Abidal and David Villa in recent seasons. That figure does not include the €65 million largely wasted on Zlatan Imbrahimovic in summer 2009.

Whether United’s response is more ambitious than the aforementioned De Gea, Young and Varane is as yet undecided. After all, while uncontested newspaper reports speculate at heavy summer investment in addition to that trio, recent history suggests otherwise. Gill’s assertion that his summer will be “busier than usual” could yet be another of the executive’s empty platitudes.

Meanwhile, United continues to invest in youth development, although there has been scant reward in the past decade. Of the current first team squad only Jonny Evans and Darron Gibson have emerged from the academy in the past decade; an embarrassing return relative to Saturday’s opponents.

Of course this season’s FA Youth Cup winning side may yet produce rarefied talent to compete at both domestic and European level, although precedent suggests that it is unlikely. United’s two teams to reach the Youth Cup final since the ‘class of ’92’ – 2004 and 2007 – has produced not a single first team regular at Old Trafford, let alone a talent to match Paul Scholes, Ryan Giggs and David Beckham.

It is a failure Ferguson blames on the FA’s regulatory framework for youth development in England, especially the so-called 90 minute rule. The regulation stipulates that Premier League academies cannot take on boys that live more than 90 minutes drive away from the club’s base at Old Trafford.

“People have to understand the mechanics of the industry we are working in,” Ferguson said today.

“We are only allowed to coach youngsters for an hour and a half, they [Barcelona] can coach every hour of the day if they want to. That’s the great advantage they have got. It is a fantastic philosophy.

“We hope that in years to come our coaches will be able to spend more time with young kids, to teach them the basics, the technical abilities and the confidence to keep the ball all the time. We are good at it, but not as good as Barcelona at this moment in time. It is a wonderful challenge and we should always accept a challenge.”

Yet, any revision to the rule will bring no immediate reward as United continues to look abroad for the best in world youth talent. Of the Youth Cup winning side seven hailed from the Greater Manchester area, while the other four were brought in from overseas. The trend may yet swing towards ever greater global imports as the club seeks to circumvent FA regulations.

More to the point, despite the talented youth team, none will immediately augment United’s side. If the gap between United and Barça is to be bridged than Gill’s wallet will be in repeated use over the next two months. It was, no doubt, a conversation pondered as United’s victory parade idled past the crowds today.

When club turns on fans what does support mean?

March 25, 2011 Tags: , , Reads 45 comments

The relationship between club and supporters is a nuanced one. In recent years many clubs, save for those actually owned by the fans, have sought to change that relationship. No longer one of homogeneity – fans turned up, paid at the gate and the team performed – to one that emphasises commercialism. In short, from fandom to custom. Indeed, since the Glazer takeover at Old Trafford the American family has not only raised prices by close to 50 per cent but revelled in the fact, boasting of its ability to do so in last January’s bond document.

Support is, of course, both ephemeral in nature and what economists call price-inelastic. That is, while the casual supporter – the 300 million ‘fans’ David Gill so often boasts of – will come and go with good times and bad, regulars will accept increasingly high prices before removing their custom. The Glazer family has traded on it for more than five years.

Yet, when Thomas McKenna last summer allegedly leaked details of companies whom purchase executive facilities at Old Trafford, amid one of the most aggressive marketing campaigns ever undertaken by the club, he retained the support of many fans. After all, dismayed by the Glazers debt-fuelled ownership of United, disenfranchised through price rises and arrogantly dismissed by the club’s management, fans were rightly angry.

Today, the club filed long-expected papers in the high court, suing McKenna for “losses and damages” that the club claims was brought about by the Tameside resident. The now defunct website wewantglazerout.com published a list of more than 400 customers, mostly local businesses, alongside a press release claiming the leak came “with the assistance of senior employees of MUFC who oppose the Glazer family’s asset stripping of our club.”

United has previously denied both that a senior executive could have helped McKenna or indeed that the action had any effect on the bottom line. Yet today the club followed Tampa Bay Buccaneer’s precedent and is taking a United supporter to court. The Glazers’ NFL club sued supporters locked into lengthy season ticket bonds. Hardly surprising given Malcolm Glazer’s predilection for litigation with his own family.

“The defendant’s express purpose in publishing the list was to embarrass and exert pressure and to incite others to exert pressure upon the clients,” the papers said.

“The theft of data led to some of the companies named on the list having their property attacked and suffering significant personal distress. The club has a duty to demonstrate to all our fans that we will not tolerate that and will take action against the perpetrators. We take data security very seriously. Doing nothing was not an option.”

Yet, no evidence has ever been filed that supports these claims and while Greater Manchester Police last August claimed to have arrested “a 43-year-old man from Tameside … on suspicion of an offense under the computer misuse act” no charges were ever filed. McKenna, under any definition, is innocent of a crime.

Why then, with no material losses, no evidence of criminality and no mole uncovered within the club, has United chosen to take legal action? After all, it will be almost impossible to place a value on the club’s supposed losses that were once strenuously denied by Gill. It is a decision that “smells horribly of action being taken out of spite” concludes blogger Andersred.

Legal details aside, there is a question of whether fans can ever have the same relationship with a club that turns on one of them. What is it that fans actually support – the club? The team? Players, manager, or simply a concept? Some will brush off the club’s latest assault on supporters, just as too many fans have ignored David Gill’s regular insult of their collective intelligence. That Sir Alex Ferguson once told a fan to “fuck off and support Chelsea” is now largely forgotten.

Indeed, some United fans will support the club’s action against McKenna too. After all, those apologists for the Glazer family often react as if criticism of the regime’s business model is an attack on ‘their’ team. Partisanship, it seems, has few boundaries.

Others will view McKenna’s actions as this of a martyr; not dissimilar, perhaps, from Wikileaks’ Julian Assange. If knowledge is power then control of that information has the power to cause considerable embarrassment and change.

In court United must prove not only did McKenna knowingly act with the malice apportioned to him but that the damages done are monetiseable; that businesses failed to renew their executive facilities not because of the economic climate, nor the Green and Gold campaign, but because of intimidation brought about as a direct of the fan’s actions.

Victory will bring little of value to United, except retribution for the embarrassment caused. A marker perhaps; a show of power. It is little more than the actions of a bully. Then again, the club has been arrogantly doing that for years.

Blackout fails fans, club and manager

March 8, 2011 Tags: , , , Reads 30 comments

Sir Alex Ferguson’s club-wide media blackout, imposed after Manchester United’s defeat to Liverpool at the weekend and the Scot’s recent FA charge for improper conduct, will prove counter-productive both to the man and the organisation he represents. In this de facto certainty lies. After all, failure to communicate not only robs supporters of an essential link with the team but allows a coverage vacuum to grow in which the media controls the agenda.

Routinely obsessed with the coverage he garners, Ferguson has repeatedly cancelled his Friday morning press conferences this season and has now taken to boycotting the club’s own TV channel MUTV too. Yet the Scot’s tirades at the media are now routine – with more than half a dozen journalists banned from attending conferences at Carrington – and he has made little effort to build relationships with the media.

In Ferguson’s place hacks required to fill column inches and broadcast hours will seek out alternate editorial angles. They’re unlikely to offer the positive coverage Ferguson so desperately seeks.

Of course, somebody should have reminded David Gill about the current media blackout, with the United chief executive appearing in front of a Parliamentary Select Committee today – in full glare of the cameras – to extol the virtues of the reclusive Glazer family.

Aside from the now routine claim that United’s huge debt makes no difference to the club’s transfer market spending or long-term security, Gill also claimed – bizarrely – that the club is excellent at communicating with supporters.

“As an executive team, on behalf of ourselves and the club do have extensive communications with our fans,” claimed Gill in front of MPs today.

“We take those elements of fan communication very seriously. We look at ways of comforting them that their club is being run properly. We understand the importance of communication, we don’t take it lightly.”

Indeed, there is no little irony that Gill should claim in Parliament that the Glazers have “delegated Alex Ferguson” to talk to the fans in the week United’s 69-year-old Scot is refusing to do precisely that. Perhaps it is little wonder United’s manager is taking his cue from the owners – the Glazers have given one interview in more than five years of ownership.

However, Gill said the club will never talk to groups opposed to the Glazer regime, including the Manchester United Supporters’ Trust (MUST).

“We don’t communicate with certain fan groups,” added the 53-year-old ceo.

“If we’re going to be castigated for not speaking with one or two groups who have very specific agendas, then so be it. Unless they change their situation I do not see a reason to sit down and talk to them.

“They have a devout aim to change the ownership. They’re [fans’ groups] well-organised but they’re very domestic. We’ve done studies that show we have 333 million followers from around the world. We get thousands of emails, we got 36,000 phone calls last month.

“A lot of the fans want to ensure that there’s money to be spent on the team, that they come to a safe, modern stadia, that [United] play exciting, attractive football. And I think we’ve delivered on those accounts.”

However, Gill forgets that the supposed 300 million plus fans outside of the noisy “domestic” contingent contribute almost nothing to United’s financial status. The summer tour nets around £5 million per annum but overseas casual fans spend little else. Around one third of United’s income comes from match days at Old Trafford, another third from UK Sky TV subscribers and the other third from other media rights and commercial sponsorship.

And while United’s global fan base contributes indirectly to the club attracting new sponsors the global media also plays an important part in communicating the club’s message. One that the club cannot influence if it refuses to engage.

More to the point, fans can argue that press coverage of the club ‘makes no difference on the pitch’ but it clearly affects both the manager’s thinking and his actions. Ferguson’s aim may well be to foster the now clichéd ‘siege mentality’ but if the media ban is extended for any length of time and players cannot fulfil sponsors’ commitments the Scot will surely hear about it.

However, it seems unlikely Ferguson will hold his weekly press conference this Friday, although time will tell whether the Scot speaks with ITV ahead of United’s FA Cup fifth round clash with Arsenal on Saturday. The United manager is also required to hold a press conference 24 hours ahead of the club’s fixture with Marseille next week.

By which time the FA may well have handed down a four match touchline ban to the 69-year-old for questioning referee Martin Atkinson’s “fairness” – it’s a subject on which we’re unlikely to hear from Ferguson or anybody else at the club again.

In the meantime the United manager has been widely lampooned for his stance in boycotting the media and criticised for his comments about referees. It can hardly be the type of coverage the Scot seeks.

Arrogant Gill playing fans for fools

October 10, 2010 Tags: , , Reads 53 comments

Manchester United chief David Gill has dismissed supporters’ fears over the club’s finances and reiterated his stance that Sir Alex Ferguson has money to spend in the transfer market. It’s an increasingly tired line, coming in a week when the club posted record losses as the Glazer family’s leveraged takeover bites on United’s ability to compete.

Gill conceded that the club’s huge debt reduces the amount of money available but again denied that the £45 million per season interest payments effect United’s ability to compete in the transfer market.

It begs the question: just how foolish does the 53-year-old executive believe United’s supporters to be?

“I cannot disagree that, without the debt, we would have more money within the club, but the interest payments do no impact on the club’s ability to attract players,” he said.

“We have more than £160 million earning interest in the bank and the Ronaldo money remains largely unspent. The money is definitely there, if Alex requires it.”

It is precisely this kind of statement from Gill that the doormat tendency at Old Trafford is all too willing to follow, with some misguided – read deceived – supporters believing a challenge to the Glazer regime is akin to an attack on the club. It’s not.

It is those same fans, who slavishly follow the pronouncements from Gill and Ferguson, that the Glazer family is exploiting to prop up an ailing regime. Don’t believe the headlines, they say; it’s the anti-United media faction making the most of accounting rules to talk down the club.

Others know that Gill is telling at best half-truths.

True, remove the non-cash adjustments to United’s audited annual accounts and the club would have made a £25 million cash profit. That is, in a season where United achieved a record turnover on the back of increased ticket prices and a new television rights deal, United could afford to spend about one-third of a Cristiano Ronaldo in the market and break even.

With no growth in television or gate revenue likely in the current year, and United’s over-exploitation in the commercial market gathering pace, there is a good argument to say 2009/10 may represent the peak of the club’s financial might.

This is the rub, while United retains about £160 million in the bank, £28 million is already effectively spent on the disastrous debt-swap and £70 – £95 million will be carved off by United’s parent company Red Football Joint Venture (RFJV) to pay down the so-called Payment in Kind (PIK) debt.

Moreover, in this financial year the Glazers can also take up to another 50 per cent of United’s profits in further dividends. The family almost certainly borrowed money from the club in 2008 to buy up 20 per cent of the PIK debt and they will again. It makes no financial sense for the Americans to not draw from United’s funds once again.

Despite all the evidence to the contrary, Gill says that money is there for Sir Alex to compete in the transfer market. Fans know he’ll need it, with up to four players retiring in the coming summer, while Owen Hargreaves and Michael Owen are out of contract. It’s going to take a lot more than £25 million to revitalised the Scot’s squad.

Don’t worry, says Gill, the benevolent Glazers have retained money in the business for this purpose.

“They have retained that money in the bank and it’s there for Sir Alex if he needs it for players, and for investing in the training ground and the stadium,” said Gill, who labelled debt the ‘road to ruin’ before accepting £1.7 million per season to play turncoat.

“United fans should not be concerned, we have a long-term financing structure in place, excellent revenues that are growing, we are controlling our costs – total wages are 46% of turnover – and we can afford the interest on our long-term finance.

“There is zero pressure at all to sell any star player whether it is Wayne Rooney or X, Y or Z. I can categorically say that. The philosophy is to retain and attract the best players.”

United’s ability to pay off interest is the bean-counters’ concern, of course, not the supporters’. Meanwhile, double-negative talk of United not selling star players is little more than a red herring.

United isn’t struggling to pay debt interest, as Liverpool has done in recent times. Neither is the club under financial pressure to sell Rooney or others.

However, United fans are genuinely worried about the ticket prices at Old Trafford and whether the team can remain competitive on the pitch with no significant net investment in the player squad over the past two summers.

With no plan to de-leverage in the next six years the Glazers will continue to use the Reds as a vehicle to pay interest and PIK debt. After all, RFJV owns no other asset than the club.

Supporters of a less ostrich-like ilk understand that unless the club’s ownership changes, debt will continue to play a significant role up to and including 2017. At that point the club will need to find at least £502.5 million to pay down the bond or refinance yet again. Debt in perpetuity.

If the PIK debt is no longer a factor by then it will surely mean United has been drained of a further £200 million.

This much supporters understand. At least those who have given up listening to Gill that is.

Say what, Mr. Gill?

May 29, 2010 Tags: , Reads 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.”