By Nick Harris
2 March 2010
Key details of a fledgling plan by a group of super-rich “Red Knights” to buy Manchester United can be revealed today by sportingintelligence, which has also been told by a source at the heart of the scheme: “This is the very early stages of something. There won’t be an offer within a week, or month, or probably this year. This is about exploring options. But as a movement it exists, it’s real and it’s credible.”
The Red Knights have released a statement today, confirming they held a meeting yesterday in London, more of which later, but sportingintelligence can reveal that the plans are ambitious, to say the least. The Knights want to buy United from the Glazer family, and it is tentatively envisaged that they will do so by attracting the following partners, an unquantified ”few” of whom have made firm commitments to date:
50 top tier Knights (our italics) among the super-rich who support United. It is hoped they will contribute between £10m and £15m each – or £500m combined – to the Red Knights kitty.
100 second tier Knights, who will contribute between £1m and £5m each, or an average of £2m each, for a combined sum of £200m.
100,000 “member Knights” (our phrase, but reflecting the campaign’s desire for mass fan involvement), who together will contribute £250m (or £2,500 each).
If all these targets are reached – and these are lofty targets, way beyond any comparable fund-raising effort in global football buyout history – that will give the Knights a fund of £950m. The operative word is “if”. United have a huge following, but getting these sums would be incredible.
Any sober analysis of the plan right now would have to conclude those sums will never be raised in the manner described above. It goes without saying the Red Knights want to prove otherwise.
Insiders acknowledge that the Glazer family, who insist the club is not for sale, will in all probability put a much higher figure on the club. Forbes valued it at £1.3bn last year and given the massive annual operating profits it generates, that would seem a reasonable market value.
Where would the rest of the money come from? The Knights “simply don’t know at this stage.”
Yesterday’s meeting in London was more about formalising the alliance, and starting to gather names of potential investors than putting together an offer.
There is no offer on the table, or any immediate prospect of an offer.
The driving force behind the plan is Jim O’Neill, the Goldman Sachs chief economist, and not Keith Harris, the Seymour Pierce stockbroker who is well known for brokering the sales of Chelsea, Man City and Aston Villa. Harris is involved, indeed his name and credibility is a part of the marketing, but it is understood that unlike O’Neill, Harris is not a “top tier” Red Knight and will not be putting those sums of money into the venture.
One of the other “top tier” Knights is Paul Marshall, co-founder of one Europe’s biggest hedge funds, Marshall Wace LLP. But other parties named as involved – including Mark Rawlinson, a partner in law firm Freshfields Bruckhaus Deringer, and Richard Hytner, the deputy chairman of Saatchi & Saatchi Worldwide as well as a key Manchester United Supporters’ Trust member – are mainly involved as advisors and passionate supporters, not “top tier” Knights.
The Red Knights’ plans tentatively involve limits on ownership in the scheme, perhaps capped at five per cent for any one person involved, and an even lower percentage of voting rights. But the plans are at such an early stage, everything is up for discussion. It is quite feasible that nothing material will happen in terms of a Red Knights bid for years.
Somebody who attended yesterday’s meeting confides: “It’s not the case that we’ve got a loaded gun and are ready to pull the trigger. A more accurate way of looking at it would be we’ve now got a gun on the table; we have to pick it and find the ammunition to use it.”
The Red Knights have engaged the services of a City PR firm, who released the following statement this morning on behalf of the Knights:
“Following the intense media speculation overnight, we can confirm that a group of high net worth individuals, who support Manchester United (known as the “Red Knights”), met in London yesterday. This group is supportive of current management but are looking at the feasibility of putting together a proposal to be put to the Glazer Family regarding the ownership of Manchester United. These discussions are in early stages and no contact has been made with the Glazer Family.
“For such a proposal to be viable, it would require the involvement and support of Manchester United supporters worldwide. The Red Knights have been liaising with the Manchester United Supporters Trust and their representatives attended yesterday’s meeting. As a first step, the Red Knights want supporters to demonstrate their commitment by joining the free online membership of the Supporters Trust.
“Any new ownership model would aim not only to put the Club on a sound financial footing, but would also aim to put the supporters at the heart of everything the Club does. In the coming weeks the Red Knights will continue to work with MUST and others to formulate our proposal and further statements will be issued in due course.”
MUST’s chief executive, Duncan Drasdo, said: “I can confirm that we were present at the ‘secret’ meeting of the Red Knight Group yesterday and have been involved in discussions for some time. This development is hugely welcome as there is a genuine desire to see a change of ownership at Manchester United.
“Initially the Red Knight Group has effectively set a challenge to Manchester United supporters to demonstrate they wish to see an alternative ownership proposal developed. In the first instance supporters are being asked to do this simply by joining the free online membership of the Supporters Trust (MUST) and swelling its ranks to an initial target of at least 100,000.
“It is also essential for a majority of two key groups, the Old Trafford season ticket holders and those with Executive facilities, to show their appetite for participation by joining the MUST online campaign.”