Ian Herbert: Just how rich and powerful are the 'Knights'?

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The Independent Online

Manchester United fans would rather forget the last time there was talk of a new owner with the word "Knight" in his name at their club. Michael Knighton, whose £20m offer 21 years says something about how far United's commercial juggernaut has come since, did something even the Glazers have not dared when he juggled a ball in the Old Trafford centre-circle before the 1989-90 season opener with Arsenal.

Knighton, of course, pulled out when his financial backers failed to raise the money and turned his attentions to Carlisle United instead. Is there an omen in that story? Or have United found their knights in shining armour this time?

Jim O'Neill, the Goldman Sachs chief economist who opened a one-hour meeting on the subject at 9am on Monday, at a meeting room in the London offices of Freshfields Bruckhaus Deringer, is certainly a man Sir Alex Ferguson is more comfortable with than Knighton. O'Neill offered to mediate six years ago between the United manager and John Magnier, then one of the largest United shareholders, in their memorable dispute over the racehorse Rock of Gibraltar. The argument was settled without him but O'Neill, who received Ferguson's son Mark to work at Goldman for a time, joined the Old Trafford board nine months later. Sources close to the so-called Red Knights yesterday rejected suggestions that O'Neill had contacted Ferguson before drawing together his plans to buy out the Glazers but given their past relationship it is hard to avoid the impression that the connection will interest the United manager – who has remained avowedly loyal and supportive of the Glazers.

O'Neill, a self-deprecating Mancunian, drew large audiences and an even bigger reputation with his currency market predictions and was among the first to predict the growth of the "Bric" economies of Brazil, Russia, India and China. But he has surely taken on his largest challenge yet with this project.

The overriding question is: where will the money come from? O'Neill's financial partner is Paul Marshall, ranked 274th in the last Sunday Times Rich List with a fortune generated by the Marshall Wace hedge fund he founded in 1997, but the sum total of his wealth, £200m, down from £280m in a year, would buy less than a fifth of United under its current £1.3bn valuation.

Though there are understood to be a dozen other potential Red Knights who have indicated a willingness to commit to the project, one source said yesterday that "no-one has committed in a significant way" and that "it depends on price." Mark Rawlinson, a partner at Freshfields, hosted Monday's meeting but will not be a major investor. Neither is Richard Hytner, the deputy chairman of Saatchi & Saatchi Worldwide, in that wealth bracket, though he is a key Manchester United Supporters' Trust (Must) member. Rawlinson and Hytner are mainly involved as advisors and passionate supporters.

The size of the fund-raising task means that fans are likely to be asked to make a serious contribution and it is when they are asked to do that the project's moment of truth will arrive. It is one thing to lay out £7 on a green-and-gold scarf to demonstrate your opposition to the debt-laden horizons the Glazers have taken United towards, but it is another entirely to invest more than the cost of a season ticket on a shareholding in the club, at the back end of a recession.

Must's engagement of online campaign consultancy firm Blue State Digital is an important part of the effort. Their fund-raising track record was a major consideration when Must decided to engage them to double its online campaign membership to 100,000. But even securing £2,500 from 100,000 fans might leave the Red Knights short of money, raising the question of whether O'Neill and Marshall – whose fortunes in recent years owe so much to their companies' use of debt – may use it again, just as the Glazers have, in the event of the Americans becoming willing to sell.

Of course, the Glazers' own stance may change radically in the next few years. As their £500m bond issue prospectus earlier this year revealed, they view Sir Alex Ferguson's departure as one of the downsides of the business and he will not be around for much longer. Neither will there be £80m players like Cristiano Ronaldo to sell to put the club into the black each year. A couple of years without Champions League football and the pips would also start squeaking.

United's new bondholders certainly seem to feel there is a future in the Red Knight plans. If such a deal went through, they would have to be paid back at 101 per cent of the face value of their bond – whose price rose 2.3 per cent on the news yesterday.

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