How Sir Alex Ferguson (paid £1m a year) may get a £2m fund - tax free - to play with

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IT HAS been another good week for Sir Alex Ferguson. The millionaire racehorse-owning manager of Manchester United, who is paid a reported £1.5m a year by last season's treble-winners, has seen his testimonial fund boosted by at least £1m after a match at Old Trafford on Monday night featuring his own team against a "Rest of the World XI" and a team of United former players.

IT HAS been another good week for Sir Alex Ferguson. The millionaire racehorse-owning manager of Manchester United, who is paid a reported £1.5m a year by last season's treble-winners, has seen his testimonial fund boosted by at least £1m after a match at Old Trafford on Monday night featuring his own team against a "Rest of the World XI" and a team of United former players.

The match and other events in his testimonial year stand to make £2m which will, after expenses, be paid into his testimonial fund. The organisers include his accountant, Alan Baines, and Andy Dodd, manager of the band Simply Red. A spokesman for the organisers said they will look to ensure the final payment to Sir Alex will be tax-free.

At Monday night's match close to 55,000 people paid adult prices of £18-24 to watch the game. Sir Alex will also profit from television rights, programme sales, catering and merchandise.

Testimonials are an anachronism, rooted in the days before football's satellite TV-fuelled commercialisation, when footballers' wages were restricted to a comparatively meagre maximum wage. Sir Alex's testimonial represents the most spectacular commercial exploitation yet of this tradition.

His accountant, Alan Baines, who is a member of his testimonial committee, confirmed that he will seek to ensure the money is tax-free: "It's a grey area of revenue law and you have to be extremely careful. The beneficiary cannot himself have initiated the testimonial, nor can the club have been involved in organising it, because it can then be classed as money earned from employment. In our case, we're a group of individuals, fans who have organised the testimonial because we thought the guy deserved it."

Mr Baines added that he had advised Sir Alex in renegotiating his contract with United last year, but the testimonial, announced in March, was "not part" of the negotiations. If the Inland Revenue were to consider it as a contractual concession, granted by United as part of the negotiations, tax could have to be paid.

"We look at the circumstance of each case very carefully," an Inland Revenue spokesman said yesterday. "But this is a grey area. If the circumstances are such that the money was not earned as part of employment, then no tax is due."

The testimonial has been criticised by some supporters as excessive, and questions are particularly being raised about the justification for testimonials continuing to attract tax-free status. However, Andy Spinoza, official spokesman for the committee, said the events were proving popular with a public willingly honouring Sir Alex's achievements.

"Fifty-five thousand people were delighted to pay tribute to Sir Alex, and many businesses have jumped at the chance to entertain clients and staff at corporate hospitality events which Sir Alex has attended."

Outside Old Trafford on Monday, however, many filing away from a lacklustre event told a different story. People said they had attended simply because thousands of United season ticket-holders had declined to buy tickets, making the match one of only a handful in recent memory for which tickets were on open sale to the public.

"It was an opportunity to take my kids to Old Trafford," said Mike Morris, a joiner. He could not normally take his son, Ian, 10, and daughter Lindsay, 14, and they had particularly wanted to visit Old Trafford. "I wanted them to have that chance. But I think it is disgusting that Ferguson is making so much money personally out of it."

Sir Alex's testimonial reveals the extent to which Simply Red - whose first hit was "Money's too Tight to Mention" in 1985 - are associating themselves commercially with Sir Alex and Manchester United. Mr Dodd chairs Sir Alex's testimonial committee, joined by Mr Baines and Ron Wood, a greetings-card businessman.

In August Mr Wood flew Sir Alex from Arsenal's Highbury ground to Haydock Park in his private jet to introduce Simply Red's concert, which was linked to Sir Alex's testimonial year. None of the proceeds went to Sir Alex's testimonial fund, although Simply Red have said they will make a donation, as yet undisclosed, to one of his nominated charities.

Monday's match was organised and the TV rights sold by a sports consultancy, l'attitude and the publicity done by Spin Media, companies part-owned by Mr Dodd, which were paid fees for doing so. Earlier this month Jason Ferguson, Sir Alex's son, joined l'attitude as a television consultant.

The testimonial committee stressed that two charities are to benefit from the testimonial, including one, From Street to Stadium, set up by three local councils. But the committee will not say how much or what proportion will be distributed. "We will be making a donation at the end," said Mr Spinoza, "and that donation will be made very public." The committee says it is the first football testimonial to nominate a beneficiary charity. But Paul Merson donated part of his 1996 Arsenal testimonial proceeds to charity.

In a press release entitled "Simply Reds" sent out when the testimonial was announced in March, Spin Media intimately linked Simply Red with Sir Alex and Manchester United's global fame. "Both the soccer club and the pop group have gained massive appeal around the world since 1986, the year Ferguson joined United and one year after Mick Hucknall [Simply Red's lead singer] released his debut album."

Speaking of their first meeting in 1990, Hucknall said: "We just hit it off. I have a lot of respect for him, partly because of his history of trade unionism," a reference to Sir Alex's activities as an apprentice toolmaker in the Govan Shipyards in 1961, when he was 21. He has come a long way since then.

UK football's most lucrative testimonial matches

For benefit of          Year    Match                                                   Crowd           ReceiptsSir Alex Ferguson       1999    Man Utd v World XI                              55,000          £1,000,000*Paul McGrath           1998    Jack Charlton XI v Rep Ire XI   39,000          £600,000Mark Hughes                       1994    Man Utd v Celtic                                42,079          £500,000Paul Merson                       1996    Arsenal v International XI              31,626          £400,000Brian McClair             1997    Man Utd v Celtic                                44,000          £380,000Bryan Robson              1990    Man Utd v Celtic                                41,658          £300,000Mick McCarthy             1996    Celtic v Rep Ireland                    40,000          £300,000Sir Matt Busby            1991    Man Utd v Rep Ireland                   35,410          £250,000Ian Rush                  1994    Liverpool v Celtic                              25,856          £250,000Bryan Gunn                        1996    Norwich City v Man Utd                  21,000          £250,000Stuart Pearce             1996    Nottm Forest v Newcastle                23,815          £200,000Kenny Dalglish            1990    Liverpool v Real Sociedad               30,461          £150,000*estimate
How the Manchester United manager's testimonial year is paying off

All-star match

Manchester United v Rest of the World, Old Trafford, 11 October 1999. Attendance: 55,000, tickets £18-£24, children half-price. Estimated receipts over £1m. TV rights sold for undisclosed amounts to BSkyB and worldwide to over 20 countries. Match programmes cost £4.

Testimonial merchandise

750 limited edition prints of Ã’Treble WinnersÓ painting: £395 each (possible proceeds £300,000). Photo of Ferguson with three trophies: 100 at £200 each (possible £20,000

Golf day

Celebrity-amateur golf day at Mere Country Club, Cheshire; golf with United players and dinner for paying participants. Receipts undisclosed

Race day

Haydock Park Race Day, 5 July, 1999. Man Utd players displayed their three trophies. Attendance 15,000. Estimated receipts: £500,000

Still to comeTribute Dinner for 1,000 paying guests at Lancashire County Cricket Club, March 2000. The testimonial committee also announced two events: A photography and art exhibition and a family fun day, to be free and open to the public. No dates have yet been set.

To CharityTwo charities have been named as part-beneficiaries: From Street to Stadium, a sporting charity for underprivileged children, and a trust named after Ferguson's mother, Elizabeth. No details have been announced about the sums to be donated.

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