Manchester United – why the empire has fallen:

Old Trafford - United's iconic stadium.

The first thing to say about this article is that if you are not a Manchester United fan, you may find it tedious. But bear with me; it outlines what has happened to the football club and why; there are parallels in many other walks of life and certainly in business and sporting empires.

Now the reason I’m writing this article is because people have asked me, ‘what’s wrong with Man Utd?’ ‘How can a club with such a huge following and with such vast wealth be so disorganized.’ They ask me because I’m a Man U fan for over sixty years and counting. The answer is both simple and complicated. Roy Keane, one of United’s greatest players is fond of saying, ‘it’s all because of that *ucking horse.’ And he’s technically correct; let me explain:

First, the background: Many people know the tragic story of the Busby Babes, arguably the finest team of young players ever assembled in England. The name came from the manager, Matt Busby and they won successive league championships for Man Utd in 1956 and 57. In 1958, having qualified for the semi-final of the European Cup, more than half the team was killed in an air crash on the way home. Undaunted, Matt rebuilt the team and through discovering three of the greatest footballers of all time, George Best, Bobby Charlton and Denis Law, again won the league in 1965 and 67 and achieved Matt’s ultimate aim by winning the European Cup in 1968. To demonstrate just how good those players were, all three won the Ballon D’Or for European footballer of the year. Three players in successive years from the one club – it has never been repeated.

George Best

But Matt was tired and having achieved his ambition, he let the club drift. They didn’t sign a new player for two years and went into rapid decline. Sadly, the decline in the club’s fortunes mirrored those of George Best, the only one of the three who was still playing. If it was nowadays, he would have an army of counsellors to treat his alcohol addiction and a clever manager would build a team around him. George was unique; I have seen players who were probably as good but I don’t think I have seen one better. He won a lot with Man Utd, but with proper and astute management, he could have achieved so much more.

I’m telling this story because it mirrors, to some extent, the current situation. After the 1967 league victory, Utd went twenty six years, until 1993, before they won it again. By then, they had been through seven managers, the league was called the Premiership and Alex Ferguson had taken over as manager. There followed the most successful period not just for Man U, but for any club anywhere. In 27 years in charge, Ferguson won forty trophies, including thirteen league titles and two European Cups. Having taken over a club which he himself described as ‘more of a drinking club than a football club,’ he completely changed the culture and achieved phenomenal success. The pinnacle was 1999 when he won the treble of European Cup, Premiership and FA Cup. By then, the club was an empire, earning phenomenal amounts of money from TV rights, endorsements, gate receipts, shirt and other sales etc. The club was debt free, quoted on the stock exchange and had the highest rating. Ferguson could buy the best players every year and keep strengthening the team. Arguably no one was ever in a stronger position. Remember this was years before Abramovich bought Chelsea or the people from Abu Dhabi, Saudi or Qatar started investing.

Alex Ferguson

So what went wrong? It is said that an empire is at its most vulnerable when it reaches its peak and there are numerous examples. Having achieved phenomenal success, Ferguson began to indulge his other passion – horse racing - nothing wrong with that per se, until one particular horse emerged. Alex Ferguson was reputedly a fierce dictator in football matters but was extremely sociable, interesting and intelligent away from football. Through his horse racing interests, he developed a friendship with the Irish billionaires, J.P. McManus and John Magnier. They had a young thoroughbred horse which they had great hopes for called ‘Rock of Gibraltar.’ The story goes that one night over dinner and drinks that they offered Alex a half share in the horse for nothing, as in free gratis. Alex gratefully accepted the offer and from then on was associated with the horse. Rock of Gibraltar went on to win many races and earned millions of pounds for its owners, half of which went to Alex. So, not only was he managing the most successful football club, he was also making a fortune from horse ownership.

Ah, but the catch was yet to come. Horse racing insiders will tell you that the real money in that industry is made from breeding. When Rock of Gibraltar retired to stud, he was reputedly earning a quarter of a million for every mare he ‘covered.’ Apparently he could cover up to eight mares per day so we are talking phenomenal amounts of money. McManus and Magnier told Ferguson that the ownership ‘deal’ was only for racing – he wouldn’t be receiving half of the stud fees. Alex then made the worst decision he ever made for both himself and Man Utd; he sued McManus and Magnier. If you are going to sue billionaires, you need to have unlimited resources and then some. They offered Alex a compromise – he would get one ‘cover’ fee per year - a tidy sum for absolutely no outlay. But he ignored them and pursued the legal action. Man Utd was quoted on the stock exchange so McManus and Magnier used their wealth to purchase shares in the club, eventually reaching the point of having to declare a controlling interest. They then sent forensic auditors into the club to investigate all of Alex’s transfer dealings over the previous twenty years. Now, no one ever said that there was anything dishonest discovered but suffice to say that the questions asked, if pursued to finality, would have tied both Ferguson and the club up in red tape for years and could have been embarrassing for both. Alex knew the game was up and he dropped his legal action.

Of course that wasn’t the end of the matter. McManus and Magnier, both apparently Arsenal fans, then disposed of their interest in Manchester United to an American firm of venture capitalists, the Glazer brothers. These people had and still have no interest in football; they see Man Utd as an investment vehicle or as is often called in business terms, a ‘cash cow.’ For people unfamiliar with company law, what the Glazers did seems astonishing and the fact that they were allowed to do it is a terrible indictment of modern company law. In brief, the Glazers bought out McManus & Magnier and ultimately all the other shareholders, turning the club into a private company once more. To do this cost them, at the time, Stg700m. But here’s the killer – they did not invest one penny (or cent) of their own money. They borrowed the 700m and immediately put the debt on the club’s balance sheet. So Man Utd, which had been debt free, now, overnight, owed 700m. This seriously damaged their ability to deal in the transfer market. As I’ve said, how the Glazers were allowed to do this is stunning – in theory, I or you or anyone could have bought Man Utd.

The first sign of how the new regime was to operate was the sale of the club’s star player, Cristiano Ronaldo, to United’s and Ferguson’s bitter rivals, Real Madrid for Stg80m, a phenomenal fee at the time. They spent Stg20m to replace him with Antonio Valencia, a good player in his own right, but no Ronaldo. Surprisingly, United continued to be successful, winning several more Premierships and another European Cup. However, this was largely due to the fantastic base of players which Ferguson had nurtured and purchased over the years and his relentless ursuit of success. When he left in 2013, although he won the league again that year, the team was waning and there were no new young players coming through. On the financial front, in the intervening years, the Glazers have still not invested a cent of their own money but have taken out over Stg2 billion in ‘dividends.’ The club still has huge debt although it is still financially viable, having such an enormous worldwide fan base which generates sales and TV royalties.

Two years ago, a British financier and professed Man Utd fan, Jim Ratcliffe, purchased 20% of the club from the Glazers, on the basis that attention needed to be given to the football side of the business. He paid Stg 1.5bn, giving the club a perceived value of Stg 8bn. For the previous fifteen years, former players would tell you that the emphasis was always on the commercial side and never on the football. United have won a few cups since Ferguson left but not the Premiership. The latest appointee as manager, Michael Carrick, will be the 14th different manager since Ferguson left in 2013. Why has the club not been as successful as previously? Many reasons; purchasing sub-standard players; selling good players; alienating players, who subsequently went to other clubs are were successful; concentrating on the wrong issues; neglecting the football culture; having the wrong people in charge; becoming a mess, organizationally; over celebrating when they won minor competitions like the League Cup. There are many more reasons but the primary one is the complete lack of interest in football shown by the owners. Jim Ratcliffe has tried and continues to try to change this but he has a long way to go; as a fan, I can only hope he succeeds and that the current manager or whoever succeeds him, will finally get it right.

There is no argument as to who was the greatest manager the club ever had – Alex Ferguson wins that accolade by a mile and deserves the credit he gets. When he took over the club in 1986, it was arguably as disorganized as it is now. Luckily he was given time to change the culture. Modern managers don’t have this luxury; the quick fix is the method today. Clubs are also far more complicated with Directors of Football and all sorts of other powerful interests. People like Alex Ferguson, who totally dominate a club only come along once in a generation. While United fans will forever be grateful for his achievements, his grave error in pursuing a dubious legal case ultimately brought the club back to where it was when he first took over. As Roy Keane said, ‘it was all because of that *ucking horse.’

Postscript:

I’m not sure if Michael Carrick is the next Alex Ferguson, but he has started well and in his own quiet way, could be as effective over time. When he first joined the club as a player in 2006, he was given the No 16 jersey, vacated by Roy Keane, who had been a legend. Carrick, although also a defensive midfielder, was a quieter, more thoughtful player but turned out to be equally as successful, winning five Premier Leagues, a European Cup, a UEFA Cup, an FA Cup and three League Cups – quite a haul for someone who was greatly underestimated. Whether he is given the job permanently remains to be seen; he came in as manager as quietly and without fuss as he did as a player. Perhaps it’s a harbinger of good things to come? As fans, we can only hope.