Sir Alex Ferguson finally signed a contract extension yesterday, putting pen to paper on a 12-month rolling deal due to start on 30 June 2005.
The Manchester United manager's current contract, thought to be worth £3.5m a year, expires on that date. United released no financial details but it is not thought that a hefty pay rise is part of Ferguson's extension package, nor that any of the terms of his new deal will be backdated.
Ferguson pronounced himself "very happy" with his contractual arrangements, saying they gave him "strong focus on the short-term challenges" and "long-term freedom" to improve the squad and win silverware.
United's chief executive, David Gill, said: "We came up with the idea for a one-year rolling contract when discussions first commenced in summer 2003, because we believe it reflects our total confidence in the manager and also reduces speculation about his possible retirement date."
Gill's words may be true but should be taken with more than a pinch of salt. Yesterday's deal represents a climbdown by both the United board and Ferguson in the face of pressure from the club's major shareholders, John Magnier and JP McManus. The Irish racing tycoons hold a 25 per cent stake in United via their investment vehicle, Cubic Expression, and had demanded that Ferguson be given no more than a 12-month rolling extension.
"They will look at the detail and make their views known directly to the board," a source close to Cubic Expression said yesterday. Magnier and McManus had threatened to force an extraordinary general meeting if they did not agree with the contract's terms. Magnier is involved in a bitter legal dispute with Ferguson about the stud rights to the racehorse, Rock Of Gibraltar.
Magnier and McManus are unlikely to push for an immediate EGM now that it has become clear that United's financial liabilities to Ferguson have not been stretched as far as anticipated.
Ferguson said yesterday's deal demonstrates the support bestowed on him by United's board and Gill in particular. Yet it was only three months ago that he was expecting to sign a deal with United until 2007 at least.
It was understood that Ferguson was also expecting a pay rise to around £5m a year and that any rise would be backdated to this season. In effect, he was expecting a five-year package worth £25m. Instead United's liabilities to him after yesterday's deal are worth more like £9m over two and a half more years.
* Nicky Butt has turned down a move to St Andrew's, leaving the Birmingham manager Steve Bruce weighing up the possibility of an improved offer for the Manchester United midfielder.Reuse content