The Phoenix Fund CAN Work

The Glazers' numbers don't add up, but ours will.

You've read about the debt. You know the Glazers' numbers just don't add up. And you know that things will inevitably go pear-shaped. We MUST be ready.

There are two pieces to the financial puzzle of being able to reclaim our club. The first is the Club's future valuation. The second is having enough money in the bank.

How much is United REALLY worth?

We know the Glazers overpaid for the Club. With the rumours swirling the stock price rocketed and they were backed into a corner. Hence the massive debt and exorbitant interest rates. But that doesn't mean we will be facing the same scenario.

The future price of United will be significantly less than that which the Glazers were forced to pay. Indeed depending on how things work out for the Glazers (and how long they remain in control) it could be a fraction of their original purchase price. How do we know? Remember that Manchester United plc was valued at £260m (equivalent to about £1 per share) when Cubic Expression started building their stake, for it was at that point the price began to rise dramatically due solely the mounting takeover speculation.

This of course begs the question; how much? What might the club be worth a couple years from now? This is hard to say. It's conceivable that United's value has risen, and it's a cert that Glazer will not want it to go cheaply, but he may not have many choices once the piper starts looking for payment. The issue of market valuation remains a tricky one. But it's helpful to think that if the Club were sold essentially on the presumption that Glazer would more than double profits, this might suggest that he paid double the fair value, which means less than £400 million. Still a lot, but not the the approximate £791 which it cost the Glazers to take the roughly 265 million shares off the market at £3 each.

How can we raise enough money?

We're starting with an initial seed of £2 million of members' funds. But there are many, many more efforts planned in the immediate future. The combination of members' contributions and our numerous fundraising efforts and MUST products and services could potentially, with maximum take-up from members, grow to £50 million within 3 years.

Remember also that there is still a real likelihood of raising a significant amount from wealthy ‘Red Knights’ who have previously expressed an interest in buying a stake in United. 

Finally, add in the leverage that we can get from tying up with an investment bank like Nomura, who in April 2005 offered us a £1 for £1 loan matching the amount of fans’ equity raised.

But wait. If we borrow money won't we end up just like the Glazers?

No!

First, we wouldn't be overpaying for the club. It would be properly valuated. Second (and a consequence of the first), we would not have to rely on a totally unrealistic business plan that requires us to double profits. Third, we're likely to have far less gearing than the Glazers. Our actual up-front funds will be real, not some so-called 'equity stake' that was built up through borrowings.

Finally, and most importantly, we would be reinvesting the profits back into the Club to guarantee its future success, not skimming them off the top to enrich ourselves!

In short, the Phoenix Fund is a real plan. One based on realistic assumptions that truly has a chance of success. The more we work towards it, the more likely it becomes.

» Click here to see current and imminent Phoenix Fund projects.

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We are the official trust for Manchester United FC, but please don't confuse us with the Glazer-owned United. Click here to understand what this means.