The £200m feud that could tear Man Utd apart

It's a tale of passion, pride and two larger-than-life thoroughbreds. The racing magnate John Magnier and his one-time friend Sir Alex Ferguson are going to court to settle the ownership of the hugely valuable horse known as the Rock

Among wealthy people, it is said, it is vulgar to talk about money. Sir Alex Ferguson, football's most famous manager, and John Magnier, one of the most powerful men in racing, may today wish that such etiquette had not been observed.

Instead, they are now set for possibly the most extraordinary court battle ever to take place in the world of sport, with an estimated £200m at stake and, beyond that, the reputations of two men who are highly focused, aggressive, controlling and driven - and who are prepared to gamble for high stakes. Their close friendship has been blown apart, and in the rubble seems to lie only bitter recrimination, embarrassment and, crucially, a sense of betrayal. It is a mix which, with Ferguson in particular - given his volcanic temperament and overdeveloped sense of injustice - is simply incendiary.

The bitterness that fuels this relentless drive towards litigation is, maybe, fuelled as much through his sense of being betrayed, of being let down, as by any sense of entitlement which, undoubtedly, has always been keenly felt by Ferguson, a son of the Govan shipyards in Glasgow and one of life's scrappers.

And it is all about one horse: Rock of Gibraltar. And it is because of the Rock that these two intimidating men find themselves in such a hard place. Ferguson, the manager of Manchester United and arguably the game's most successful boss ever, has started legal proceedings against Magnier, an Irish millionaire who has rivalled the mighty Godolphin operation as the dominant force in racing. Magnier is known as the head of the so-called "Coolmore Mafia" - Coolmore being the fabulously successful stud farm he owns in County Tipperary, from which he has made much of his fortune. And he is also known for his ruthless streak.

The dispute is a long and complex story, but at its heart is a simple question: who owns what? Ferguson is claiming half-ownership in the record-breaking stallion, which could be worth between £50m and £100m depending on its success at stud. Magnier, known as "Big John", is fighting the claim and, after months of discussions, it appears the issue will have to be settled by the courts.

What has added further depth to an already unfathomable dispute is that Magnier and his business partner JP McManus are now the biggest shareholders in Manchester United (a publicly listed company as well as a football club), owning 23 per cent of the shares through a specially constructed business called Cubic Expression. A takeover bid is not impossible. Magnier could become the boss - Ferguson's boss. And, with Ferguson now negotiating a new £5m-a-year contract at the club he has managed with great success for two decades, Magnier, as the largest shareholder, is already entitled to raise an objection to his wage demands (Ferguson currently earns £3m a year).

Furthermore, Magnier is no football fan. He is, or more accurately was, a Fergie fan. The Irishman did not even watch his new investment play until almost a year after he started buying the shares in the summer of 2001 - just after Ferguson had threatened to quit the club. Although Magnier undoubtedly regards his stake as an investment and the club's shares were undervalued, many believe his presence was also aimed at shoring up the position of his then new pal. There was even talk of Ferguson eventually being installed as chairman. That seems a long time ago now, as does the evening when Ferguson stood before a dinner of the racing world's high and mighty, two summers ago, and declared of Magnier and his wife Sue that "nobody could be blessed with better partners".

It is perhaps appropriate for a man embarking on probably the biggest gamble of his life that Ferguson, who had hitherto developed only a moderately successful interest in horse racing, was introduced to Magnier by a bookmaker. It was back in 1997 at Cheltenham and the mutual friend was Mike Dillon, a United fan and the director of public affairs at Ladbrokes. The two autocrats clicked. Visits were soon arranged to Coolmore, and Ferguson was impressed. He even frequented Les Ambassadeurs, the Mayfair gambling club favoured by the Irish high rollers, and shared a love of red wine with Magnier.

Soon Ferguson was acquiring horses through Magnier, jointly with the racing man's wife, Sue. The arrangement appears to have been somewhat loose. Horses such as Heritage Hall, Zentsov Street and Juniper carried Ferguson's red-and-white colours, but there was no talk of training fees or insurance or vets' bills - all of which could be prohibitively costly, even for the wealthiest racing fan. But such things were all taken care of. Besides, the horses were not particularly successful, which was, for Magnier, mildly embarrassing. It was not the way to impress his new, high-achieving friend.

Nevertheless, nothing was spelt out, and the impression grew that Coolmore were simply happy to have Ferguson on board at a time when racing in general, in the middle of a scandal over alleged race-fixing, needed a public relations boost. A Ferguson win, said the Racing Post, the racing industry newspaper, would "attract more column inches than money can buy". And so, when Zentsov Street was sold, Ferguson, despite being the registered owner, does not seem to have received anything from the sale.

It mattered little until a hardy colt came on the scene. Magnier suggested that Ferguson invest in a two-year-old called Rock of Gibraltar, which was of the highest pedigree and was being trained at the Ballydoyle stables by the highly rated Aidan O'Brien. The hugely impressive stables, 10 miles from Coolmore, are also partly owned by Magnier and McManus. Everyone sensed that the Rock, which had already won its first race, was special. And so it appears that Magnier entered into an "oral agreement" with Ferguson. It is this that is at the core of the dispute.

A partnership was lodged in the summer of 2001 - just as Magnier was investing in Manchester United - with the Irish authorities. Ferguson is reported to have agreed to pay £120,000 for his share, which was his biggest-ever investment in a horse, although whether anyone fully realised it at the time, he had got himself a bargain. Magnier is understood to have discussed what the joint ownership meant with Ferguson, although recently it has even been disputed whether any money changed hands at all. It is at this point, also, that their versions are diametrically opposed.

As the part-registered owner of the Rock, what was Ferguson entitled to? He believes that he was offered a choice by Magnier - 50 per cent of the prize money won by the horse or 50 per cent of the potential from its stallion earnings. The latter was more of a risk, as no one really knew how good the horse was, but it was potentially much, much more lucrative. Ferguson, or so he believes, opted for the latter. Magnier believes Ferguson was mistaken. What he thought he had offered was 5 per cent of the prize money or one stud nomination a year. That would have allowed Ferguson to send one mare to the Rock - about £40,000. The difference was vast.

The issue was further complicated because, if Magnier believed that Ferguson's interest was lesser, he nonetheless seemed happy with Ferguson's public role as a successful owner. That the horse was special was confirmed in France in October that year when it won the Grand Criterium at Longchamp, his first Group One race - Group One being the highest classification of flat racing. That was followed by the Dewhurst Stakes a few days later and four more Group One races between May and June 2002, including both the English and Irish Guineas. When the horse won the Prix du Moulin, again in France, in September 2002, the Rock made history by becoming the only horse ever to win seven consecutive Group One races. It was a phenomenon - the undisputed champion of the flat season and without doubt one of the most successful horses of all time.

In prize money alone, £1,269,800 had been won - but that paled into insignificance compared to the horse's stud value. Ferguson, a man who, at times, had been consumed by a sense that he had been underpaid throughout his football life, believed he had hit the jackpot. His hobby had now become his biggest earner, his pension fund, his fortune. He would earn more through racing than he had ever done through football. Conservatively, the Rock was now estimated to be worth £30m. And so the horse was put out to stud.

Towards the end of the last financial year, Ferguson's advisers contacted Coolmore to discuss the implications. After all, the Rock's owners could earn between £40,000 and £100,000 for each mare that the horse covered. In his first year alone, that would mean stud fees of many millions. And, depending on how his progeny fared as racehorses, that value could rise and rise for many years to follow.

Unsurprisingly, Ferguson's people wanted to know how the money from the Rock would be paid to their client and raised the issue of starting a trust fund. But why, they were told, would that be necessary - after all, Ferguson's entitlement was straightforward? There was clearly a problem. Magnier made a call - and it was clear that he and Ferguson had different recollections as to what had been agreed. How they would come to rue the decision not to put their arrangement on a formal business footing.

The relationship began to unravel quickly. Despite both men professing a desire to compromise - after all, Ferguson was now regarded as one of Magnier's closest friends and there was great mutual admiration - it was clear that this was unlikely. Magnier upped his offer, Ferguson thought it derisory. Anyone who knows much about either man will be aware that they simply do not back down. Ferguson is renowned for his ability to feed off a sense of betrayal - although this has sometimes caused him damage, such as when he took a Scottish football club to an industrial tribunal after it fired him as manager earlier in his career. He lost that one.

A statement from Coolmore clearly indicates that neither side is backing down. It said: "Coolmore Stud and John Magnier consider the action to be without merit and it will be vigorously defended. As this is a legal matter, no further comment will be made." Indeed, the two men now only communicate through lawyers.

Some observers believe that Ferguson's case is a weak one, because of the apparent lack of enforceable documentation. However, Ferguson is not renowned for accepting defeat. His legal action may amount to a piece of brinkmanship for a 61-year-old knight who may end up being dragged through the courts and seeing his carefully accrued personal wealth being blown away. If it comes down to finance, he will lose. If Magnier is not a billionaire, he is close to it.

But the Irishman is also, despite his formidable presence, also painfully shy of media intrusion, and he shuns the limelight. His courting of Ferguson was always a question of playing with fire, as well as an apparently sound business decision by a man used to winning in commerce. But maybe he will, ultimately, offer Ferguson some form of compromise more to his liking. That's the gamble the football man is taking. It's a high risk but - with Sir Alex Ferguson - it was ever thus.