United they stand?

The most financially successful football club in the world is facing huge challenges on and off the pitch.

by Matthew Gywther and Andrew Saunders
Last Updated: 09 Oct 2013

It's a gloomy early spring morning and there's a bitter wind blowing across the pitch at Carrington, Manchester United's fortress-like training ground a few miles to the south-west of the city centre. The weather's not quite polar enough to warrant turning on the undersoil heating, but players such as Cristiano Ronaldo and Gabriel Heinze could be forgiven for wishing they were back home in a warmer climate.

Having just lost to AC Milan, United are out of the Champions League. Off the pitch, half-year profits have halved and the club is being stalked by an acquisitive American billionaire. For the squad, though, it's training as usual. Phil Neville has just skied one over the bar, while injured brother Gary watches, jogging gently around the perimeter. Teenage superstar Wayne Rooney emerges from the hydrotherapy pool and heads for his team mates, stocky frame and rolling Simian gait unmistakable even from 200 metres.

The temperature plummets a few more degrees when manager Sir Alex Ferguson stomps on to the pitch. Red-faced under an incongruous woolly hat, hands thrust into anorak pockets, his body language is unambiguous. In a game where no-one likes to lose, Ferguson likes it least of all, and his baleful glare makes sure that they all know it. Watching from a safe distance of 50 metres, all one can hear is the name Maldini, the Milan defender who denied them even a single point the day before last.

Ferguson is living up to his image as the prime exponent of the hairdryer school of management, the regular dishing out of up-close dressings-down, accompanied by physical outbursts that occasionally end in tears, the most famous instance being the changing-room spat that left David Beckham with a cut brow.

Fast-forward a few hours, off the training pitch and into the warm, Hilton-plush surroundings of the director's dining room at Old Trafford. What is the truth about his motivational techniques? All trace of the morning's pugnacious manner has evaporated, replaced by a thoughtful ambassador for Emotional Intelligence. 'I reminded them today about how good they were. The most important thing is that we lost with dignity. They are big men and it's important to have humility. Be positive even when you lose.

He seems mild and even-handed, almost reticent, carefully considering questions before responding. It emerges that as well as owning racehorses, he is also something of a wine connoisseur, is learning French and teaching himself to play the piano. (He plays the same one tune – The Tennessee Waltz – that Mohammed Ali used to play.)

Is this really Ferguson? The stories of his explosive temper are legion, a manager who puts the fear of God into players to keep them motivated. In his early career in Scotland, his nickname was Furious. Even his favourite primary schoolteacher said that for all his many fine qualities, Ferguson was a child who 'could start a fight in an empty room'.

The facts of the matter are a long way from the legend, says the man himself. 'If we lose on Saturday I have to point out why, and sometimes I can be a bit forceful about it. But the one thing I can't deal with is myth. The more successful you are, the bigger the myth is. I've heard stories about me going behind the stands to practise screaming at the players. I've actually read that. Not true.'

But Ferguson is a mythical figure. Since he arrived at Old Trafford in 1986, he has turned Manchester United from an ailing giant into one of the most consistently successful football teams in the world. The club has picked up the Premiership title a record eight times and the FA Cup five times, but Fergie's crowning glory was winning the treble – the FA Cup, Premiership and Champions League in Europe – in 1999. Not bad for a working-class boy from the shipyards of Govan, Glasgow, whose football career could have ended when he hung up his boots in the '70s and opened a pub (Fergie's) in his home town. But he went into management – first with Queen's Park and St Mirren, and then, very successfully, with Aberdeen – and turned out to be far better in the dugout than he ever was on the pitch.

Another side to the Ferguson myth is his famously paternalistic approach towards bringing on young players. United stars who have been nurtured as schoolboys by Sir Alex through the ranks include David Beckham, the Neville brothers, Ryan Giggs and Paul Scholes. Right next door to the training ground at Carrington is the £8 million Manchester United Academy, a state-of-the-art facility where local talent is nurtured. Boys as young as nine compete for a place in one of the club's many junior teams, dreaming of the day they join their first-team idols over the road.

It's a very efficient system when it works. How much less would it have cost the club to have discovered a 10-year-old Rooney than it did to buy him aged 18 last year, when his price tag was £20 million? Hooking them at an early age not only saves money for United shareholders, it also gives Ferguson control over a player's development on and off the pitch. 'Management is all about control. Success gives you control and control gives you longevity as a manager,' says Ferguson. 'In football, very few managers achieve a position of complete control over their teams.'

This leads to a weirdly intense relationship, quite unlike that to be found between management and employee anywhere else. 'I love my players, I do. I love them. But that doesn't mean you neglect your paternal job of saying: "I expect better than that of you, come on." The players reflect me when they are on the pitch, and that's what I want. I want them to be me.'

This explicitly fatherly style doesn't suit everyone – his tough love can express itself in ways that would be familiar to teenagers everywhere. Gordon Strachan – managed by Fergie at Aberdeen – claims to have spotted Ferguson's car outside his house one night, checking he was at home and not out on the town. Similarly, observers have noted that the relationship between Sir Alex and his most famous protégé, Beckham – sold to Real Madrid in 2003 – began to sour when Becks met his future wife.

Having exercised as much control as he could for more than two decades, Ferguson is now in a position of considerable power and has a one-year rolling contract worth a reputed £3 million. But there have been periods when his relationship with the club's board has been acrimonious – he and former chairman Martin Edwards are said to have argued so badly over money that they were barely on speaking terms by the time Edwards left.

So how does Ferguson handle the commercial side of the business – wouldn't he rather get on with playing football? 'There are two things here – winning games and being commercially successful,' he says. 'Do they pull against each other? Of course they do. Last summer Wayne Rooney became available and I had to go to [chief executive] David Gill and say: "We've got to sign this boy, come on, it's only £20 million, it's nothing!" But David knew himself we had to do it. Can you imagine if Rooney had gone to Chelsea or Arsenal? Oh God, the fans would have burned the place down.'

He admits that the demands of shareholders can be frustrating. 'There have been times when I couldn't get to grips with the fact that the club was responsible for paying shareholders a dividend. Sometimes, it was like: why give them the money? Give it to me so I can spend it on players. But you have to understand that there is a financial balance to be struck.'

He also has strong ideas about who might succeed him, although at 63 he shows no signs of quitting. 'I can see Roy Keane as manager here. He's intelligent and decisive. What's the most important thing you need as a manager? To be willing to make a decision.'

Taking hard decisions is something with which Gill has become highly familiar this season. Having taken over in 2003 as CEO from Peter Kenyon, who defected to arch-rival Chelsea, the toweringly tall former accountant has had Malcolm Glazer's tanks parked on the Old Trafford lawn for most of this season. Last year Glazer, having made himself the club's second-biggest shareholder, launched a controversial takeover bid. With the overwhelming support of United's legions of fans, Gill rejected it, describing the assumptions made as aggressive and the plan damaging. But the serially acquisitive dollar billionaire Glazer did not retreat. Described by one US judge as a snake in sheep's clothing, he has made a hobby out of pursuing trophy assets, from Harley Davidson to the Los Angeles Dodgers. He came back with a less highly geared bid, but his plans still hinged on introducing substantial debt into a balance sheet resolutely in the black. Fans responded by hanging effigies of Glazer from nooses on the terraces.

As if having one cash-rich rival isn't enough, Gill also has to contend with the bottomless pockets of Roman Abramovich, Chelsea FC's proprietor and Britain's wealthiest resident. So, is a limitless supply of money a sure-fire route to success? 'It's stupid to say there's no correlation between investment and success,' says Gill. 'There's a strong coefficient. But it isn't that simple. Chelsea last year won nothing; this year they are doing well. But without money in the sport today, as sure as eggs is eggs, you're not going to be up there challenging.'

Unlike the vast majority of football clubs, Man Utd makes good sense as a business, which is what makes it so attractive to predators. It's accepted that it is the most financially successful and most adeptly run football club in the world. It tops the Deloitte's football club rich list with a turnover of £171 million. Real Madrid and Chelsea are not far behind in second and third place respectively, but Chelsea made a pre-tax loss of £88 million compared with Man Utd's profit of £58.3 million. That figure is likely to drop substantially this year with costs up and revenue down. Wages have risen from 40% to 46% of turnover this season and will soon top 50%.

There's no doubt that United does better than any of its rivals at exploiting the value of its brand – from shirt sales in Hong Kong to downloading matchday chants to your mobile courtesy of Vodafone. You can even get a Man U branded mortgage or credit card. The club has a sophisticated approach to sponsorship, signing long-term deals worth tens of millions with companies such as Nike with which it can develop real commercial relationships.

But how might the Old Trafford goose be made to lay even more golden eggs? Critics – and Glazer would be among them – claim that a lot more could be done to sell replica strips in fast-growing China and the Far East.

One problem is that the entire phenomenon is built around a squad of 20 or so men with the frailties of all highly strung, top-class athletes. If Manchester United is to become a global property, its fans from Shanghai to Stretford want to see the whites of their idol's eyes in action. And those sponsors want their share of face time, too. Add all these demands to what is already one of the most hectic playing schedules in world football and something has to give. Normally hamstrings – and tempers.

Gill acknowledges the tensions. 'Players do say: "Why have I got to do that? I'm here to play football." You just explain why they have to do something that is beneficial.' This isn't like any 'normal business', as Gill has come to realise since he left the world of management consultancy and the travel game to join United in 1997. 'In a strict corporate environment, you are all channelled towards the same goal.'

So what is it like being The Boss's boss? Gill and Ferguson talk on the phone most days and meet formally once a week. How does Gill manage the club's key relationship? 'As manager, he will want more and more. And at some point you have to say no, but in a way that has some rationale. He will respect that and he doesn't sulk. I've learned that from him. My wife said I used to sulk for days but now I don't.'

How does he cope with being one of the only CEOs in the country who not only earns less than his staff sergeant – Sir Alex – but also many of his front-line soldiers in the playing squad? (Both Keane and Ruud van Nistelrooy are said to be on £110,000 a week.) 'You come into this with your eyes open. You accept it. The fans pay to see the players, but if I wasn't here the club would probably find a more able CEO from somewhere else. So long as I'm getting paid what I think I should get paid, I am relaxed about it. There are many David Gills around, but not many Rooneys or Ronaldos.'

Let's hope this self-deprecation does not foretell his own demise. As MT goes to press, the futures of both Gill and Man Utd itself hang in the balance. The enormous weight of sporting tradition and fanatical fan loyalty on one side of the scales, and a wealthy, determined 76-year-old Floridian on the other.

Sir Alex Ferguson

1941 Born Govan, Glasgow

1967 Signs for Glasgow Rangers for £65,000, a Scottish record at the time

1974 Manager, St Mirren FC. Fired in 1978

1986 Becomes manager of Man Utd after leading Aberdeen to European Cup Winners' Cup

1990 First FA Cup win with Man Utd

1999 United wins treble – UEFA Champions League, FA Premier League and FA Cup

2002 Row over his retirement terms; he stays

2004 FA Cup winners – Ferguson's fifth

2005 Team crashes out of Europe and drifts behind Chelsea in the Premiership.

David Gill

1957 Born Reading, Berkshire. Educated Henley Grammar School and Birmingham University

1981 Chartered accountant, Price Waterhouse. Two years in San Francisco before joining BOC

1990 At Avis Europe, oversees $1bn sale of firm's European leasing business to GE Capital

1997 FD at Manchester United after spells with First Choice Holidays and Proudfoot Consulting

2000 Group MD, Manchester United plc

2003 CEO Peter Kenyon defects to Chelsea and Gill succeeds him on 8 September

2005 Negotiates ownership of the club with US bidder Malcolm Glazer

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