Monthly Archives: June 2010

The true and parlous picture of Manchester United’s debts has become a little clearer over the past few weeks. The highly leveraged takeover of the club by the Glazer family has turned the club from one of the wealthiest in the world into a beast burdened by over US$720 million of debt. The club has become liable for US$460 million in interest, fees and charges since the Glazers acquired it in 2005. Are the Glazers showing any signs of being bothered by this? No. Are they looking to bale-out by accepting an offer to sell the club and walk away? Almost certainly not. Why? Because a sale at anything less than a ridiculous price would be unlikely to meet their negotiating needs.

Two attempts have been running in parallel to oust the Glazers. Firstly an increasing number of club supporters have symbolically adopted the “green and gold” colours of the club’s spiritual fore-runner, Newton Heath, and vocally called for the Glazers to go at a succession of home matches. This group, orchestrated by the Manchester United Supporters Trust has created a hostile atmosphere which the Glazers’ have so far pointedly ignored. Secondly, the band of potential investors called the “Red Knights”, led by Goldman Sachs banker, Jim O’Neill and consisting of high net worth individuals who are all Manchester United fans, has created a consortium to buy the club. Reportedly, they were preparing to put together an offer of £1 billion to buy the club until the Glazers let it be known through the media that they were uninterested in selling-up at anything less than a valuation in excess of £1.5 billion. Why would this be? The answer is that the Glazers appear to have […]

The proposed deal for News Corp to buy out the other existing shareholders at BSkyB throws up some interesting scenarios in relation to the participants’ needs and how they can best be met. A quick look at the needs, bargaining power and behaviour patterns on all sides suggests that a deal will be forthcoming. But how this might be viewed in any investigation by the Competition Authorities is another matter.

Looking at the needs of Rupert Murdoch’s Newscorp it would seem that a familiar pattern is being played-out. The deal would provide a source of cash from BSkyB’s operations which are forecast to grow rapidly – by as much as 70% over the next 2 years. This would no doubt be useful to Murdoch’s media empire at a time when there is a reassurance need for cash-flow, as newspaper revenues plummet all over the world, and the jury remains out on whether this trend can be reversed through the introduction of the kind of “pay-walls” recently introduced by Murdoch for The Times newspaper.

In terms of other personal needs, there is no need to dwell long on the partial satisfaction of Murdoch’s ‘achievement’ need which this deal would also represent. The man has been executing headline-grabbing and ground-breaking media deals for 60 years, and is not likely to stop scratching that itch until he is 6 feet under, at the earliest. The deal is also another gratifying instalment in the saga of the Murdoch Dynasty, a family that loves to be seen to be commanding respect and attention.

That brings us to James Murdoch, who as CEO of BSkyB finds himself in an interesting position. It is hard to believe that Murdoch’s bid would have been […]