The key marketing ploy being used by the Red-Knight’s to rally support for an acquisition of the Manchester United Football club is a word splashed across newspaper headlines almost everyday in post-global financial crisis society. It is a word now used to evoke fear and disgust among non-financial savvy readers.
As the stigma of the financial crisis continues in developed governments and economies, debt is now a symbol of greed, recklessness and pain, fundamentally seen as the epitome of ‘those fat-cats that got us into this mess’. This continued miss-use and war-mongering of the word by economists and journalists has ingrained an unjustified fear.
Debt is structurally ingrained into our financial systems in the credit creation process, our consumers through credit cards and mortgages, and our businesses through providing greater equity returns from investment. Although its misuse in the American housing market triggered a credit crunch in 2007-2008, when used prudently debt supports economic growth and increases the standard of leaving of society.
The negative emotions now bound to the word have been used to rally support against the Glazer Family, owners of the 132 year-old Manchester Football club. The rebellion against the foreign American tyrants is being lead by the four Red Knights, playing on the nobility and courage of British Heritage. These individuals include Jim O’Neil, Keith Harris, Seymour Peirce and Paul Marshall – who themselves are members of the wealthy aristocracy, being prominent members in hedge funds and investment banks, but unlike the Glazers, they have been avid Manchester fans since childhood.
The Glazers purchased the company in 2005 through a £790 million leveraged-buy-out, a transaction structure that is ignorantly used to characterise the excessive greed of corporate America. An LBO is a acquisition structure where the assets of the acquired company are used as the collateral for acquiring the company with a significant portion of debt. The debt-servicing cost for Manchester United in the past five years is estimated to total ~£260 million. The corporation currently has £515m in debt, with a further £202 being held by The Glazers through their investment in the Club.
The Guardian’s coverage of the story on the 4th of March played perfectly on its largely working-class audience fears, portraying a fairytale in which fans rescue their team for the Glazers. The article quickly outlined that although the Glazers have publicly stated the Club is not for sale, the debt-heavy Americans would make a huge profit from a ~£1.4 billion sale (profit being another buzzword to stem dislike for the current owners).
It is in this capacity that the Red Knights seek to rally membership and fan support, to be seen as the crusading Knights to rescue Manchester United from its current debt binging tyrants. They have publicly scrutinised the club’s current financial structure, stating that money should be spent on investing in players, not in servicing debt.
The Financial Times coverage of the story, A contested goal on the 6th of March quoted “Debt has acted like a Leech on the Club. Sucking money out to feed The Glazers and their bankers”.
Animosity to the Glazers from the fans is nothing new to the club, with fans often wearing the clubs ancient green and gold to the club’s games, rather than the contemporary royal red. The largest Manchester Club on Facebook, with now just under 400,000 members, carries the symbol:
Support has been likewise seen in the official supporters trust of the club, The Manchester United Supporters Trust, has seen membership numbers rapidly double to over 100,000 since speculation of the bid surfaced last week. These trusts seek to influence the destiny of their clubs through democratic supporter ownership, ideally what the Red Knights seek to exploit, with the possibility of supporters potential funding up to 25% of the bid.
This idea of the noble Knights slaying the debt-beast is a fairytale most of the world would like to believe, and it has successfully drummed-up support to see ownership of the club return to ‘the fans’. However, corporate motivations have far more weight than social responsibility, and it is in the writers view that it wont be long before fans realise that the debt-beast may just be giving a collar, and in the interest of the equity providers, will continue to be part of the Club’s financial structure.
As the stigma of the financial crisis continues in developed governments and economies, debt is now a symbol of greed, recklessness and pain, fundamentally seen as the epitome of ‘those fat-cats that got us into this mess’. This continued miss-use and war-mongering of the word by economists and journalists has ingrained an unjustified fear.
Debt is structurally ingrained into our financial systems in the credit creation process, our consumers through credit cards and mortgages, and our businesses through providing greater equity returns from investment. Although its misuse in the American housing market triggered a credit crunch in 2007-2008, when used prudently debt supports economic growth and increases the standard of leaving of society.
The negative emotions now bound to the word have been used to rally support against the Glazer Family, owners of the 132 year-old Manchester Football club. The rebellion against the foreign American tyrants is being lead by the four Red Knights, playing on the nobility and courage of British Heritage. These individuals include Jim O’Neil, Keith Harris, Seymour Peirce and Paul Marshall – who themselves are members of the wealthy aristocracy, being prominent members in hedge funds and investment banks, but unlike the Glazers, they have been avid Manchester fans since childhood.
The Glazers purchased the company in 2005 through a £790 million leveraged-buy-out, a transaction structure that is ignorantly used to characterise the excessive greed of corporate America. An LBO is a acquisition structure where the assets of the acquired company are used as the collateral for acquiring the company with a significant portion of debt. The debt-servicing cost for Manchester United in the past five years is estimated to total ~£260 million. The corporation currently has £515m in debt, with a further £202 being held by The Glazers through their investment in the Club.
The Guardian’s coverage of the story on the 4th of March played perfectly on its largely working-class audience fears, portraying a fairytale in which fans rescue their team for the Glazers. The article quickly outlined that although the Glazers have publicly stated the Club is not for sale, the debt-heavy Americans would make a huge profit from a ~£1.4 billion sale (profit being another buzzword to stem dislike for the current owners).
It is in this capacity that the Red Knights seek to rally membership and fan support, to be seen as the crusading Knights to rescue Manchester United from its current debt binging tyrants. They have publicly scrutinised the club’s current financial structure, stating that money should be spent on investing in players, not in servicing debt.
The Financial Times coverage of the story, A contested goal on the 6th of March quoted “Debt has acted like a Leech on the Club. Sucking money out to feed The Glazers and their bankers”.
Animosity to the Glazers from the fans is nothing new to the club, with fans often wearing the clubs ancient green and gold to the club’s games, rather than the contemporary royal red. The largest Manchester Club on Facebook, with now just under 400,000 members, carries the symbol:
Support has been likewise seen in the official supporters trust of the club, The Manchester United Supporters Trust, has seen membership numbers rapidly double to over 100,000 since speculation of the bid surfaced last week. These trusts seek to influence the destiny of their clubs through democratic supporter ownership, ideally what the Red Knights seek to exploit, with the possibility of supporters potential funding up to 25% of the bid.
This idea of the noble Knights slaying the debt-beast is a fairytale most of the world would like to believe, and it has successfully drummed-up support to see ownership of the club return to ‘the fans’. However, corporate motivations have far more weight than social responsibility, and it is in the writers view that it wont be long before fans realise that the debt-beast may just be giving a collar, and in the interest of the equity providers, will continue to be part of the Club’s financial structure.
Excellent style; very engaging read. Very good argument. 7/10
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