Tag Red Knights

Tag Red Knights

Knights renew commitment as Gill faces up to long-term protest

June 2, 2010 Tags: , Opinion 18 comments

The Red Knights insist that they are committed to bringing supporter ownership to Manchester United despite reports that the consortium’s bid is effectively over amid in-fighting and disagreement. The group of super-rich Unite fans, led by Goldman Sach’s Jim O’Neil, said on Friday that it intends to bid for the club only if Glazers’ price is realistic.

This comes as United chief executive David Gill back-tracked on earlier aggressive comments about supporters green and gold protest movement.

The Knight’s proposed £1.2 billion summer bid is yet to materialise with doubts surfacing about the both the group’s ability to fund an offer and the Glazer family’s willingness to accept a market-based price. Indeed the American’s public relations offensive in recent weeks has seen Gill rubbish the Knight’s ability to manage the club post-takeover and a leaked – although entirely false – report of a £1.5 billion bid coming from a mystery Middle East investor.

More serious still, Gill dismissed the supporter-led green and gold protest movement as little more than “a visible minority” who “don’t understand” the protest’s true nature. Many fans found the tone of Gill’s interview with the Independent newspaper both aggressive and offensive.

How quickly the mood changes with the Knights reigniting talk of supporter ownership by ousting the Glazer family from Old Trafford and Gill espousing a more conciliatory tone in the face of long-term supporter unrest at the club and, no doubt, the looming 13 June season ticket renewals deadline.

“The Red Knights remain committed to pursuing their efforts to try and help bring ownership of Manchester United to its supporters, and under a structure with materially less debt,” said a Knights’ statement Wednesday morning.

“As we have maintained however since news of our ambitions first emerged in March, we will only attempt to purchase the club at a sensible price, consistent with the long term interests of the club.

“We have spent some considerable time assessing the value of the club. If the fundamentals lead to a more realistic re-assessment then, along with our co-operation with MUST and other Manchester United supporters, we will aim to achieve our goals.”

With Untied showing huge losses in its quarterly accounts, essentially the consortium has chosen to put a bid on hold until either the Glazer family reassess its price or the ‘fundamentals’ of the club change. With the club haemorrhaging money and Payment-in-Kind (PiK) debt compounding at a frightening rate the Knights may now wait for the clubs’ finances to become distressed before a bid is forthcoming.

Despite the non-committal Knights tone, Gill now recognises that the supporters protest movement is likely to last as long as the Glazers remain in charge at the highly indebted club.

“I don’t think it’ll go away, there’s a protest movement there and clearly a lot of people who feel exercised by it and passionate about it,” Gill told Sky Sports yesterday.

“There were some comments last week that I was belittling the protest. That could not be further from the truth. We understand it and it will be there.

“It’s not about belittling that movement and I don’t think it’ll go away. We hope there will be even more red and white in the stadium next year.”

However, Gill still believes that the Knights group of super-rich investors is unworkable as a management strategy, although few on the inside believe the consortium will do anything but put a board in place to run the club. The Knights, say Gill, is not a workable management group.

“That’s my personal opinion,” added the United ceo.

“In my experience of running a club, and being involved for the last 13 years and in businesses before that is that having a whole group of people owning and running Manchester united is not workable.”

The Manchester United Supporters Trust (MUST) continues its campaign against the Glazers and in support of regime change at Old Trafford, although with no bid forthcoming before the World Cup the organisation’s strategy must now surely change.

“Green and gold has been a very visible way for supporters to show their disgust at how much money the Glazers have been wasting,” added Oliver Houston, vice-chair of MUST.

“It’s just one stage. We’ve gone from 30,000 people at the beginning of the year to 160,000 now and that shows the passion people have about the club. Whether it takes the form of wearing a green and gold scarf, or protesting to the government or withholding their custom.”

Despite the anger generated by Gill’s aggressive anti-green and gold statements over the past four months, it is likely the ceo would be asked to stay on at the club in the now unlikely event of a takeover this summer.

After all, fans may well be angered by Gill’s seemingly hypocritical support of the Glazer family over the past five years but the executive is well regarded in football management circles.

“If David Gill was offered a blind taste test of which company he’d rather be running,” asked Houston.

“A company that its £700 million in debt, with owners leaching money out of the club, with £66 million losses just announced or one where the fans and owners are on the same side working towards making the club better, we know which one he would choose.”

“Supporters know that only this (a Knights’ bid) makes financial sense and David knows this too.”

With no bid likely in the foreseeable future, Gill, the Glazers and supporters alike have a long summer wait ahead.

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.

Anatomy of a bid

May 22, 2010 Tags: , , Opinion 3 comments

The revelation in the Guardian – effectively confirmed by an ever-changing Manchester United Supporters Trust (MUST) statement – of serious divisions within the Red Knights comes as a blow to many supporters. Already considered a long-shot, a successful bid for the club by the Knights now appears utterly dead.

The consortium’s limp-wristed, one-line statement of protest Thursday afternoon hardly helped defer that impression. While MUST has fronted an aggressive anti-Glazer media campaign, the Knights’ tacit endorsement of supporters’ protest but lack of substantive communication has created only a frustrating void.

One that the consortium could not fill with any conviction on Thursday.

So much for the shining Knights, riding to Manchester United’s rescue. The group have become the little more than self-parodies, beset by factionalism and over-heated egos. Sickeningly, the separate agendas now coming to the fore are little more than the inevitable confirmation of the group’s divisions that the Glazer’s stooge, David Gill, had warned of.

The Knights set out with genuine intentions of making a bid though, attracting diverse figures from the business world including Jim O’Neil, Keith Harris, Richard Hytner, Paul Marshall, and Mark Rawlinson among others.

But the strain of funding a bid large enough to satisfy the Glazers’ desired profit margin, while meeting the investment needs of the super-rich has seemingly broken the group’s back. Or at least prompted two Knights to break rank.

It’s hardly surprising, with the Knights’ challenge manifestly difficult.

Firstly the group is required to raise a significant war-chest that will meet the Glazers’ behind-the-scenes demands of between £1.5 billion cash for the club. In February Harris claimed money was no longer the object.

Indeed the Knights reportedly turned away two ‘super-Knights’, each offering £500 million to the fund. The truth appears a little different now, with the consortium intimating it will not – cannot even – fund a bid of more than £1 billion, including the £504 million bond.

The complexities of weaving together up to 40 separate investors in a way that offers long-term security, a potential exit strategy but precludes the kind of block-building that led to United’s acquisition by the Glazers has also proven impossible. While the bid terms had reportedly been agreed a fortnight ago, they are clearly not to every investor’s liking.

This is not a philanthropic act after all. While rich, none of the Knights – at least those who are public – can call upon the billions of Roman Abramovich at Chelsea or Sheikh Mansour from Manchester City. As such the promise to effectively hand over shares to United’s many supporters through a rights-issue did not sit well with the entire group.

The consortium is not aided by the Glazer family’s demands. While maintaining a ‘not for sale’ stance in public, privately the leaked reports of a £1.5 billion Middle East bid – it was £1.2 billion but what’s a few hundred million between friends – confirmed the Glazers are willing sellers.

The club has huge leverage but the Glazers are not yet desperate. However with profit ultimately only gained through sale of the asset the real question is one of price.

The Americans will take that profit eventually. For now the Glazers appear happy to milk the club for its worth, while reducing the family’s personal exposure by paying down the Payment in Kind debt through club funds.

The Glazers have spoken of untold riches yet untapped in India and China, or through new media. Realists need only look to GDP per capita or broadband penetration in those two nations to dismiss that fallacy as nothing more than a very long-term dream. Moreover the Premier League’s collective bargaining mantra precludes United from profiting more than any other club from domestic or overseas rights.

The truth is that a bid can succeed but only one that forces the Glazers hand.

Amid the now rancorous speculation the Knights may indeed put an offer to Glazer family but if the consortium is true to its word then £1 billion will be the sum.

No matter how excessive a £1.5 billion bid is for United – based on any normal Enterprise Value (EV) definition or revenue multiple – it seems that the price is set until the club or Glazer family’s finances become distressed.

The fragmented Knights now have few choices: stump up the money, force a sale through mass boycott or disappear into the ether whence they came.

Only the latter now seems realistic.

Shining Knights risk tarnished reputations

May 20, 2010 Tags: , , Opinion 4 comments

Stories of the Red Knights’ imminent demise amid in-fighting and a realisation that the Glazer family will not accept an offer this summer are wide of the mark, according to the Manchester United Supporters Trust (MUST). The trust, now more than 157,000 strong, dismissed newspaper reports of the Knights’ failure as little more than spin.

But it’s a charge not as clear-cut as fans may hope.

The ongoing media war for Manchester United is a prelude to a firm offer from the Knights for the club this summer. Yet, if the Guardian’s sources are sound disagreements in the consortium over the bid’s structure could derail any serious challenge to the Glazers’ five-year regime.

At least two Knights, according to today’s reports, now seriously doubt the consortium’s approach.

“Senior figures involved with the Red Knights have told the Guardian there are internal divisions and that they suspect they are fighting a losing battle when it comes to putting together a takeover bid of sufficient value to end the Glazers’ unpopular regime,” says the Guardian’s Daniel Taylor.

“One of the businessmen prominently involved has lost confidence to the point that he believes they might not even submit a bid were it not for the criticism they would attract after such a highly publicised campaign.

“His belief is that, if they did lodge an offer, it would be for “face-saving” purposes, in the knowledge that it would be turned down.”

After all the £504 million bond issued by the club in January – the small print of which instigated the latest round of anger from United’s supporters – restructured the club’s finances to allow the Glazers more breathing room. The bond, although increasing annual interest payments on United’s £716.5 million debt, enables the family to pay down the punitive Payment in Kind loans from club finances.

Unless the club’s finances slip into what economists euphemistically dub a ‘distressed state’ the Glazer family has bought itself at least seven years grace, with the bond maturing in 2017. This is not news though and the Knights’ bid has always been dependent on an offer which matches the American’s required profit multiple.

The Guardian’s report also follows club ceo David Gill’s assertion that season ticket sales are “on track” with previous campaigns, with supporters required to submit renewal forms by 13 June.

However, MUST challenges both the newspapers’ sources while questioning the club’s belief that support will remain robust in the coming season.

“It obviously wasn’t a rogue knight who contacted all the various journalists/business desks with this story,” claimed the organisation this morning.

“Clearly the Glazers’ anonymous spin doctor has been putting a bit of work in. They ARE worried about the ST renewals (and no boycott has even been called despite reports), sponsorship and the general opposition to their ownership so are seeking to undermine supporter morale.

“They are severely underestimating the determination of Manchester United supporters and the anger they feel about the millions of pounds the Glazers are taking out of our club every year.”

The real question is whether fans have over-estimated the Knights’ ability to fund and organise a bid for the club. Led by Goldman Sachs Jim O’Neil, the consortium’s diverse interests may indeed fuel divisions. In truth, debate is no barrier to a formal bid; the real question is one of money.

Should the Knights’ not come up with a figure that is to the family’s satisfaction then ownership will not change hands in the short-term. It would be a blow not only to supporters’ hopes of Old Trafford regime change but to those who have led the Knights’ high-profile media campaign.

Perhaps three events will dictate this summer’s events and the club’s future.

Firstly, the club announces its quarterly financial results on 28 May where it is widely expected the Glazers will have drawn down United’s £122 million cash reserves. Then – potentially – will come the Knights’ bid before the World Cup begins on 11 June.

Finally, as season ticket renewals land on the Old Trafford mat the club will learn whether supporters’ anger is tangible or not.

In public at least the Knights’ stance is firm, while MUST continues to ask supporters to delay renewal until the last possible moment.

“Talks have been going better than ever and are progressing very positively,” a Red Knights source told the Press Association today.

If they are not, reputations will suffer for it and the Glazers’ stranglehold on the club will likely continue.

*update Thursday 20 May*

MUST changed it’s statement this afternoon, removing the group’s assertion that a Red Knight had not spoken to the press and implicitly confirming the premise of a divided consortium. Repeating the claim that the Glazers are “attempting to frighten supporters into renewing season tickets,” MUST said that the American family is concerned about the Green & Gold movement.

The adage about organising a drink in a brewery comes to mind.

MUST dismisses Glazer bid talk

May 7, 2010 Tags: , , Shorts No comments

Manchester United Supporters Trust (MUST) chief executive Duncan Drasdo has dismissed reports that the Glazer family turned down a £1.5 billion offer for the club as “desperate PR spin.” Almost identical reports in the Times, Guardian and Telegraph today suggest the offer came from an unnamed Middle East consortium late last year.

MUST, which will coordinate a mass demonstration at United’s final Premier League game of the season on Sunday, expects a Red Knights bid before the World Cup starts on 11 June.

“It [bid talk] is cynical and smacks of desperation coming just ahead of the last game of the season and an anticipated bid from the Red Knights,” said Drasdo, the MUST chief executive officer, in a statement.

“Could anyone seriously believe the Glazers would reject a vastly overvalued bid of £1.5bn just at the time when they were so desperate for money last year?

“They have been taking personal loans out of Manchester United as well as scrabbling around to refinance the debt with the recent bond issue while their businesses in America are reported to be in deep trouble.

“In any case this supposed bid was prior to the launch of the recent supporters Green & Gold campaign so has no bearing on the current situation.

“Anyone still interested in making a bid for United would be extremely foolish not to talk to supporters and the Red Knights but it is of course very possible they are now part of the Red Knight consortium anyway. There can only be one deal in town for the Glazers and so this kind of PR spin won’t impact on the price.

“If they really don’t want to sell and the supporters campaign is having no impact then there would be no need to start this recent PR offensive would there?

“The only logical explanation can be that firstly they are interested in selling and this is all about trying to push up the price. Secondly they are rattled by the supporters protest and desperately hoping to damp it down.

“Thousands of supporters are expected to delay renewal of season tickets at least to the first deadline on 13 June and many others have committed to not renewing until the Glazers sell.

“This pressure will come on top of the collapse in demand for tickets and executive facilities which has come as a result of the economic conditions. We have seen unsold tickets and hospitality even for the biggest games this season so a season ticket is seen as an expensive irrelevance for those who’d prefer to pick and choose which games they want to attend.

“The smugness of boasting about ‘owning the best house on the hill’ is breathtaking and will disgust many supporters who have endured eye-watering ticket price rises since the Glazers took over. Whoever is advising them on PR has scored a spectacular own goal with this strategy.

“This spin that the Glazers intend to try to cling on to ownership will only make supporters more angry and far from reducing the opposition this is going to grow the protest and make fans more determined.

“This is not going away and they are hugely underestimating Manchester United supporters if they think otherwise. Supporters have a key role in sending that message to them.”

MUST is distributing 50,000 anti-Glazer packs to supporters on Sunday, including “GO” placards, whistles and flags.

Red Knights bid before World Cup

May 6, 2010 Tags: , Opinion 3 comments

The Red Knights consortium of super-rich Manchester United supporters will make a formal offer for the club to the Glazer family before the start of the FIFA World Cup on 11 June. The expected £1.2 billion offer, which will include the £504 million bond, will test the Glazer family’s insistence that the club is not for sale this summer.

The group, informally led by Goldman Sachs’ Jim O’Neil, met this week to agree the terms of the bid, including opening offer, equity strategy and financing.

Although the terms of the formal offer for the club have not been released few analysts expect the Knights to offer the full bid price in cash.

The terms of the bond require that investors are offered 101 per cent of the face value on any ownership change. The Knights will almost certainly ask investors to wave this right, with the bond having risen in value on the back of takeover speculation.

Given the likely terms of the bid – even if the Glazer family accepts – United will retain more than £500 million in bond debt, which accrues around eight per cent interest per year. It is not yet known whether any further leverage is required in the Knights’ bid.

However, the Knights will likely seek to refinance the bond as the credit market loosens over the next couple of years and as the terms of the bond allow.

After all the bond is designed solely to allow the Glazer family to remove cash from United’s bank account in order to pay down the so-called Payment in Kind (PiK) debt for which the Americans are ultimately responsible. The bond had the effect of increasing average interest rates on the club’s debt from below three per cent to above eight.

In the lead up to the expected bid the Manchester United Supporters Association (MUST) has asked fans for their input, with a Knights promise to “put supporters at the heart of the club” well established.

“The first few steps are clear,” said a MUST email today.

“We need to get rid of the Glazers. Then we need to free United from the burden of the toxic high-interest debt their takeover saddled us with.

“Supporters will then be given the chance to share in the ownership of the club we all love and have a real say in setting the priorities for the new United.”

The organisation asks supporters how they want to run the club, including potentially expanding Old Trafford, additional transfer market spending and reducing ticket prices.

The arrangement for a supporters’ stake in the club is not yet clear, although an earlier report that the Knights will ask fans for up to £200 million is surely wide of the mark. It is far more likely that supporters will have the right to buy shares in the club over time, building up a significant stake in the club.

This is moot of course until the Glazer family accepts a bid, with noises coming out of Florida suggesting any formal bid will be turned down.

It could be a long summer ahead.


The Guardian and The Times report that the Glazer family turned down an offer of £1.5 billion late last year from an unnamed Middle East bidder. The news, which should be taken with a very large pinch of salt as other supposed bids from mysterious investors were leaked by Old Trafford sources, will cast a cloud over the Knights’ plans.

The papers report Glazer family sources as wanting to run United “for a decade” and will not be persuaded to sell at any price. More realistically the reports should be taken as the first round in a drawn out negotiation process that may last all summer.

Red Knights “bid terms agreed”

May 4, 2010 Tags: , , Shorts 4 comments

Sky Sports News reports today that the Red Knights consortium has agreed terms of a formal offer to buy Manchester United. Rant expects the formal bid to the Glazer family in June. SSN reports that the group, led by Goldman Sachs Jim O’Neil, agreed the terms of their expected £1.2 billion bid, which will include the club’s £504 million bond debt.

The Knights meeting this week thrashed out both the size of the proposed bid and the terms under which each Knight will invest. Details of the meeting have not been released by the Knights but may include the expected return on investment, terms of exit and size of the bid.

The Glazer family has consistently maintained a stance that the club is not for sale, although few serious analysts believe this is true. However, United supporters are also concerned about how much leverage – if any – is included in the Knights bid with the bond likely to remain in place in the medium term.

No details have yet emerged of supporters’ stake in the club under a future Knights’ ownership.

IMUSA calls for ST boycott but groups still split

April 29, 2010 Tags: , , Opinion 18 comments

The Independent Manchester United Supporters Association (IMUSA) has called for fans to renew season tickets late – if at all – as the campaign to force the Glazer family out gathers momentum. United’s oldest supporters’ group has come closest to calling for a full boycott by urging season ticket holders to starve the Glazer family of cash.

IMUSA, which is separate from the Manchester United Supporters Trust (MUST), argues that matchday tickets are readily available, with the sole benefit of a season ticket that “you get to sit in the same seat each week.”

“We all know that hundreds of millions are going out of the club in interest payments,” added an IMUSA statement this week

“What has recently also become apparent is the Glazers’ intention to take upwards of £400 million out of the club for themselves.

“We can stop them doing this but only if we starve them of cash, so that what money there is has to be spent on Manchester United Football Club, not funding the lifestyles of its unwelcome owners.”

The group’s three-point plan urges season ticket holders not to renew and refrain from purchasing anything that will add to the Glazer family’s profit, including on matchdays.

IMUSA’s call is in stark contrast to MUST, which has successfully lobbied the political parties to include football club ownership on the election agenda but made no clear stance on a boycott.

Indeed, the groups have maintained a – friendly – split although it has never been clear why separate supporter group agendas are necessary. Or even productive.

While IMUSA campaigns on fans’ issues such as prices, access to tickets and a long-running safe standing campaign, MUST focuses tightly in on the ownership issue.

IMUSA, founded in 1995, grew from supporters’ frustrations with the matchday experience, while MUST is the evolution of Shareholders United Against Murdoch – the group that successfully lobbied against BSkyB’s bid for the club in 1998.

Sadly, the strength of a single voice supporters’ voice has as yet not been manifested and the split offers only indecision over the issue of supporter ownership. Nobody wants the Glazers but there’s little agreement on how to rid the club of its leech.

IMUSA’s call to not renew is admirable though and behind the scenes it is hopeful that the group is working with MUST and the Red Knights to build a coherent strategy.

Hopeful but somehow doubtful as factionalism and personal agendas dominate.

There’s the rub. While the Glazer family’s overwhelming drain on club resources over the next seven years is without doubt, fans groups and potential bidders alike show no consistency of thought in how to deal with the problem.

Perhaps Smiley’s Red Issue editorial this month has something to it.

“We’ve really shot our bolt now with this green and gold thing haven’t we?” ponders the somewhat defeatist commentator.

“Day-trippers roaming in and out of the Megastore laden with plastic bags and a protest scarf around their neck isn’t really doing any favours.

“MUST will no doubt still be wasting their money on meaningless posters while actually doing nothing of any use while… renewals will be posted back to the Old Trafford ticket office without a second thought.”

While Smiley’s column is symptomatic of RI’s general disdain for MUST, it also represents the split between different factions. And if supporters can’t agree on how to rid the club of the Glazers what hope is there?

“Part those hairy cheeks and grimace,” concludes Smiley.

“It’s quite obvious to anyone who isn’t on the current owners’ payroll that the club’s going to spend 2010/11 getting royally f*cked by the Glazers.”

Glazers “will sell” as exec box list leaked

April 21, 2010 Tags: , , Shorts 8 comments

Duncan Drason, the Manchester United Supporters’ Trust (MUST) chairman, insists that the Glazer family will sell admin uncertainty over the club’s finances. Drasdo, who has led the campaign against the Glazer family in recent months, insists that the Glazer family will not walk away from a profit if the Red Knights bid comes to fruition this summer.

Meanwhile, another group self-dubbed United Supporters for Change (USC), has posted the names and addresses of executive box holders at Old Trafford on the Internet and is encouraging non-renewal of facilities until club ownership changes.

“If I was in the Glazers’ position and I was offered a profit, with all the different factors that are creating uncertainty for the future, it would seem like a pretty sensible option to take,” Duncan Drasdo told PA.

“When you look at all the graphs that were showing growth in ticket revenue, hospitality revenue and general matchday revenue, they are all dropping now.

“Their own advisors have said that in advice to the bond holders and they will drop next season as well. That suggests a decline in the value of the whole company, unless that revenue is replaced from somewhere else.

“With all the pressures of squad reinforcement, profits are going to drop further. It would be surprising if they weren’t willing to take something that gave them a profit.”

USC, which describes itself as a non-violent group, published an edited list of companies owning box facilities, asking firms to “recognise their responsibilities” when it comes to renewal amid concern that United’s £716 million debt will not allow Sir Alex Ferguson to strengthen the playing squad this summer.

“Executive and hospitality income represents around half of all “Matchday” revenue at MUFC,” said a USC statement.

“This gives the companies on this list huge potential influence over MUFC and its current owners

“The great majority of companies with facilities at Old Trafford are from the north-west, they are essential parts of our community, providing employment and driving our economy.

“We believe the vast majority of the individuals who purchase these facilities for their companies or who use them are supporters of MUFC and wish the best for the club.”

USC also encourages box holders not to renew until the Red Knights have made an offer for the club this summer. The £700 million bid, which will reportedly not include the £504 million bond, is now expected in June.

Although the club is yet to comment, direct action against sponsors and executive facility holders is cause for concern at senior levels. USC may spark the kind of pranks and direct action taken against United’s commercial partners in the past.

10 questions for the Red Knights

April 15, 2010 Tags: , , Opinion 19 comments

The Red Knights group of wealthy Manchester United supporters will unveil their plans to buy the club, with supporters set to discover how the investors will finance a summer bid. The Knights will offer the Glazers around £700 million for the club, with the £500 million bond retained. But the minimal details pose more questions than answers…

How many Knights are there and will their details be revealed?
Is transparency part of the bid? To date we know that following people are part of the group: Goldman Sachs’ Jim O’Neil (above), Keith Harris from Seymour Pierce, Paul Marshall of Marshall Wace, Freshfields’ Mark Rawlinson, former United chairman Sir Roy Gardner, Richard Hytner of Saatchi & Saatchi and Jon Aisbitt, the chairman of MAN Group. Additionally the group’s advisor is Nomura Bank’s Guy Dawson. However, reports suggest there are up to 40 investors in the group. Will supporters be give details of each investor and how much they are bringing to the table?

What’s the finance behind the bid?
Reports suggest that a £1.2 billion bid is on the cards for the club, which will retain the debt held by the football club but not its parent company. This will enable the Glazer family to pay off their Payment in King (PiK) loans and make a substantial premium on the 2005 purchase price. Structured as such, United will still have a £500 milllion bond on the books after the Glazers have long gone. But is there any other debt within the bid or have the Knights raised the £700 million themselves?

Why retain the bond and how will it be paid back?
The decision to keep the bond within any bid means that the club will continue to pay interest on the notes until maturation in 2017 and must then refinance or pay down the principle of more than £500 milllion. It’s a very expensive decision to make, with the club paying £45 million in interest per year for the next seven seasons. Early redemption is expensive but retaining the bond is even more so. Does this mean the Knights have not raised enough money to pay off the bond?

What dividends and salaries will the Knights remove from the club?
It is safe to assume the Red Knights are not going to buy the club as a philanthropic exercise and will require an annual dividend on their outlay. How much will this dividend be on top of the bond interest payments and what will the club keep as profits? Profits will then pay off the bond in 2017 and be invested in the football transfer market.

Are the Knights calling for a boycott?
If the Glazers refuse to sell at £1.2 billion will the Knights raise their bid or up the stakes by calling for a boycott of season ticket renewals? How much money do the Knights have in the kitty for a bid and if it’s more than £1.2 billion why is the bond being retained as part of the bid? The Manchester United Supporters Trust (MUST) has refused to back a boycott but there appears little other leverage the Knights or supporters have if the Glazer family is unwilling to sell at £1.2 billion.

How much are fans expected to put into a bid?
Earlier reports suggest that the Knights will ask supporters to find up to £200 million as part of the bid. It’s a sum that equates to more than £1,300 per MUST member, which is probably highly unrealistic. If fans cannot put up the cash who will front the money before a special rights issue at a later date allows fans to buy into the club?

What say will fans have in the future running of the club?
Under new ownership will fans have a say in the club’s management? It’s a question that is as yet unanswered by the Knights, although the group has intimated fans are central to the bid and future of the club. The Glazer family’s secrecy and bullying tactics have alienated many supporters. Will the club become more supporter-centric in the future?

What restrictions are there on future sale of Knights’ shares?
Without restrictions on future sale of individual Knights’ shareholdings, resale of the club to a single, possibly leveraged, investor is a very real possibility. Under the PLC structure United had more than 35,000 shareholders but over time consolidation allowed the Glazer family to build a block of more than 30 per cent and launch a bid for the club. How will the Knights make sure that this never happens again and do any restrictions on share sale mean there is no exit strategy for investors?

What will the new board look like?
The club’s board includes Joel and Avram Glazer as co-chairmen, alongside Chief executive David Gill. In addition to Chief operating officer Michael Bolingbroke and Commercial director Richard Arnold there are another four Glazer family members on the board. While it is widely expected the Knights will ask David Gill to stay on as ceo, Bolingbroke and Arnold, together with the Glazer family will leave the club. What role will prominent Knights such as O’Neil want in the club? Harris, for example, has held a long-term ambition to act as the club’s chairman.