Investors signed up for Man United bid

LONDON - The Red Knights, a group of investors trying to buy Manchester United, have recruited more than 40 wealthy individuals to help to provide a £1.25 billion ($2.7 billion) bid kitty.

The Knights, initially 10 people led by Jim O'Neill, chief economist of investment bank Goldman Sachs, are now hammering out a deal structure.

In weekly meetings at the London offices of financial adviser Nomura, the Knights are in the process of deciding whether 50 investors will contribute £10 million each, or a slightly lower number will provide more funds per head, but still bringing in £500 million.

A further £250 million will be found by issuing securities to United's estimated 3.8 million supporters in Britain.

The Knights also plan to retain the outstanding £500 million bond issued by the club this year in order to reach the £1.25 billion valuation.

Manchester United insists it is not for sale, but experts see it differently.

"It will be [for sale] - everything's always for sale," said Philip Long, a partner at PKF, an accountancy firm that has been involved in football deals.

"The model at the moment isn't profitable unless they sell players. The club can't continue making the losses it's made."

The latest accounts of United's parent company, Red Football Joint Venture, showed debts of £716 million and a profit of £6.4 million in 2009, compared with a loss of £47 million the previous year.

The club sold Portuguese star Cristiano Ronaldo to Real Madrid for £80 million last northern summer.

The Red Knights admit it will be difficult to come up with a deal structure that satisfies the "egos and testosterone" of all the individuals in its investor group.

O'Neill's idea is that they will get only a small dividend or return on investment as the bid is conceived as an act of altruism.

But some investors may be after more than a seat in the directors' box and a small dividend, especially those who have individually approached the owners, the Glazer family, with offers of about £1 billion.

The plan is for fans to eventually buy out the investors. The institution would be governed by a board that would elect its officials and chairman along the lines of the model used by Barcelona, the Spanish club ownedby its 100,000 socios, or members.

But some experts believe that such a deal will be hard to reach.

Jimmy Burns, author of football books including Barca: A People's Passion, said:

"It's going to be incredibly difficult to put together a capital structure which satisfies individual egos - the natural instinct of entrepreneurs is to see a return on their investment - and which in the medium and long term gives a sense of involvement and power to the fans."

Debt-laden English clubs have not had the funds to strengthen their squads this season, and for the first time in seven years England will not have a representative in the semi-finals of the Champions League, Europe's premier competition.

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