The legendary Red Devils coach: The road to success

Volume VI European Cup Winners' Cup Champions (1990-1991 season)

"The Manchester United board decisively initiated the stock listing, started the commercialization strategy, and sounded the clarion call for business operations. Ferguson led the team to win the European Cup Winners' Cup this season, which also gave the Manchester United more imagination in valuation, and commercialization successfully advanced into a broad field."

——Foreword

Chapter 149 Red Devil Stock Listing

"The most critical step taken by the Red Devils in their commercial operations in the 90s was to list the club's shares on the London Stock Exchange to raise funds and expand their influence. This was undoubtedly a milestone in the team's history and laid an important foundation for Ferguson to lead the Red Devils to continue to rise and eventually become the overlord of the Premier League."

--Inscription

Ferguson had been fighting for his position as manager towards the end of last season, fighting for the chance to win the FA Cup, and he was focused and committed, and ultimately won.

While he had survived the coaching crisis with great excitement, he discovered some strange phenomena within the club. At the end of the season, when the team was in a state of ups and downs, even if he reported the progress and analysis of the game to the club management, they were always absent-minded and dealt with it hastily. When the team had a chance to compete for the FA Cup, the management seemed to become particularly expectant and anxious. When the team won the FA Cup, the management seemed particularly excited, far more excited than they should have been for winning the championship.

Ferguson realized it late, and had to wait until the Red Devils accomplished this big thing before he knew the secret.

The entire Red Devils management was busy with off-field issues, so they didn't even care about the poor performance in the league. Ferguson's coaching level? Such discussions have become irrelevant. The FA Cup championship is strong good news. For Edwards and others, it represents an extraordinary achievement, which means that the team's top color is still shining. The meaning of the championship is far more than a trophy.

The secret of everything lies in two magical words: "listing".

Edwards and the professional team in the team had been busy for a long time. Around 1990, the process of shareholding transformation and listing of the Red Devils company, which they had been operating for a long time, reached a critical step and would soon see the light of day.

The Red Devils are not the first English football club to become a listed company.

English football has a very long history, and so does the development of clubs. With the formulation and maintenance of sports rules and refereeing rules, the organization of competitions and the management of stadiums, government departments have gradually become the supervisors of football business, but club football teams still represent the community, independent forces and rights entities. For a long time, the English government has defined football matches as sports and competitions, as community activities, and does not agree with its commercialization. However, English football soon developed various business models, continuously seeking more commercial income and grabbing more profits. After the start of the English Football League in 1888, the English government strengthened the management of clubs, and the English Football Association formulated the famous Article 34: Investors can only get 5% of the club's profits and are not allowed to receive wages from the club. The English Football Association must insist on the attributes of football clubs as community public assets, and believes that football clubs should belong to all community owners and are a public product. Therefore, it hopes that the wealth created by football will not flow into personal pockets.

Throughout history, English football clubs have indeed always had strong community attributes. Most of the teams in England were born from the community. At the beginning, they were public assets belonging to the community and a community shared by community fans, not to a certain individual or company. As time went on, English clubs became professional clubs, operated by different numbers of investors, and were no longer the public communities they were before. It turned out that the regulations of the English Football Association conflicted with reality, greatly limiting investors' enthusiasm for the commercialization of football.

English football entered a new stage in the 80s. The government had not invested in the clubs, and the fans' investment was not enough. Relying on donations from the community was even more useless. In the end, the clubs could only rely on the investment of wealthy people to operate. At this time, football clubs as public assets had lost their legal basis, and club operations began to face new challenges.

Irwin Scholer was originally a real estate businessman. He became the new chairman of Tottenham Hotspur in 1982. In order to take over Tottenham Hotspur, he took on a huge debt of more than 100 million pounds. In view of the club's earning power at the time, Scholer believed that it was worth investing. However, due to the FA's Article 34, Irwin Scholer could not get more profits from the club to compensate.

Erwin Scholer devised a clever solution, setting up Tottenham Hotspur Public Limited Company and incorporating the Tottenham Hotspur Club into it. Under this model, Scholer could earn returns according to normal company operations, and Erwin Scholer had a legal basis and factual logic to change Tottenham Hotspur into a limited liability company. Although this method aroused strong opposition from the British government, after the two sides went to court, Tottenham Hotspur had the last laugh.

Scolari further acquired private shares of Tottenham Hotspur through stock splits and expanded investment. He then achieved a complete corporatization of the club through a series of proxy holdings. In this way, the club's investors circumvented the 5% profit distribution limit and the rigid regulations that investors could not receive wages from the club.

The commercialization of English football continues to develop. With the development of commerce and finance, the limited liability company has become the mainstream of social and economic activities and has gradually expanded to the football world. The first football limited liability company in England appeared in Birmingham Football Club, which is the earliest football company in the world.

On October 1983, 10, Irwin Scolari packaged Tottenham Hotspur Club as Tottenham Football Company Limited and applied for the company's shares to be publicly traded. He succeeded and Tottenham shares were successfully listed on the London Stock Exchange.

And just like that, the world's first listed football club came into being.

With such a series of operations, Irwin Scholer raised 380 million pounds through the listing, and Tottenham's market value suddenly reached the top of English football clubs. The money raised from the exchange greatly increased Tottenham's strength and also brought its business operations to a higher level. Not only that, Irwin Scholer's original shares also achieved huge appreciation. Later, he not only recovered his investment through the sale of shares and subsequent dividends, but also made a lot of money and smiled happily.

During this period, Martin Edwards of the Red Devils took over his father's position as club chairman, and also absorbed Scolari's experience and began to promote the corporatization of the Red Devils. In 1983, the Red Devils were restructured into a joint-stock company after splitting stocks and expanding investments. The company's equity was concentrated in several shareholders headed by the Edwards family, and Martin Edwards served as chairman of the board of directors.

Martin Edwards hoped to get more salary and dividends, but the Red Devils' business operations had been unsuccessful for a long time, the board of directors had low salaries, there was almost no profit dividend each year, and the company's operations had been at a low level. Edwards once thought this was a low-return investment.

Edwards has always claimed that he loves the Red Devils, but what he loves more is money and wealth. In order to gain more profits, he joined forces with several other big teams in the English League One twice in 1981 and 1985 to form a temporary organization of the "Five Big Teams" (Arsenal, Red Devils, Liverpool, Everton and Tottenham), planning to start a new business and establish a more commercial "Super League". Edwards was the most active at the time, but both plans failed. The English Football Association united more clubs to resist the proposals of the Five Big Teams.

Martin Edwards thought it was difficult to get excess returns through normal operations, so he began to plan to sell his shares in the Red Devils. In 1989, he almost sold his shares to the wealthy Robert Maxwell, who offered only 1000 million pounds, with the condition that he would assume the debts of the Red Devils and repair the stadium. Edwards took the opponent's deposit, but soon Maxwell broke out in a business scandal, and the acquisition naturally stopped. Edwards was secretly glad.

After Maxwell, Edwards wanted to sell his shares to another "upstart" Michael Knighton. Knighton joined the Red Devils board at the time and boasted a lot to the outside world, making people think he was a billionaire, but he didn't have that much money at all, and even the first 1000 million needed a bank loan. This clown staged a farce at the Theatre of Dreams, which not only humiliated Edwards, but also embarrassed the Red Devils fans who welcomed him at the Theatre of Dreams.

Edwards suffered two setbacks and had to consider new methods. At this time, he learned that Tottenham had successfully listed and finally realized that a new era had begun.

Edwards was even secretly glad that he did not sell the Red Devils shares at a low price. He began to focus on listing the Red Devils and then making money from the stock market.

After some introduction and encouragement, Edwards and other shareholders finally decided to operate the Red Devils Club for listing.

Edwards hoped that the Red Devils would replicate Tottenham's success and actively promoted various tasks. The management quickly formed a team and the Red Devils' listing work began in 1989. The board of directors began to publicize the listing plan, visited investors in London, and conducted extensive road shows. The Red Devils strengthened public relations, and Ferguson was often pulled to attend reports to explain the team's development goals.

The Red Devils prepared a wonderful story for investors. With the success of Tottenham, the Red Devils also made a series of arrangements for structural reorganization and launched a new Red Devils.

In May 1990, the Red Devils won the FA Cup, which added a dazzling golden edge to the Red Devils' listing plan. The Red Devils' listing became highly anticipated and hot. In this way, the Red Devils were favored by institutional investors, sought after by ordinary fans, and received a lot of praise from celebrities, becoming a golden doll loved by everyone in the capital market. After a whole season of preparation and planning, the Red Devils finally successfully listed and issued shares on the London Stock Exchange on May 5, 1991, becoming a listed company.

In order to circumvent regulation, the Red Devils completely copied Tottenham's experience, and the club was eventually listed under the name of "Manchester United Limited". Under this operation, the words "Football Club" disappeared from the company name, but it is still an internal asset of the listed company, and it is the most critical asset. The Red Devils successfully circumvented the regulations that football clubs cannot be commercialized, and the listed company even directly used the football team as a selling point to attract investment.

After the Red Devils went public, their share prices continued to rise, and their market value soon reached 4700 million pounds, becoming the company with the highest market value among football clubs. Football companies are particularly favored in the stock market, and the Red Devils are even more special. With the FA Cup in front and the European Cup Winners' Cup in the back, investors rushed to buy shares, making the Red Devils quickly become the darling of the City of London.

The Red Devils were successfully listed, and Martin Edwards, who sold his shares one after another, finally received a huge income of 6400 million pounds, making his family wealthy again. In the past, his father was good at business and had successfully operated a listed company, but that business company was obviously not comparable to the Red Devils.

In addition to creating a myth of wealth, this listing also unearthed the Red Devils' unusual valuation and raised sufficient funds.

The listing of the Red Devils is a radical and crucial step in the commercialization of football. In the increasingly fierce competition in English football, the club cannot move forward without sufficient funds. Without money, there is nothing. This is the iron rule of football clubs. Without money, you can't buy the players you want, and you can't keep the players you want to keep. Without money, you can't play good football, update facilities, and attract more fans. This will be fatal to expanding commercial influence, and difficulty in sustainable development means bad news.

Funds can almost determine everything, which is the ultimate goal of listed companies. The successful listing of the Red Devils is not only a wonderful return for the wallets of the team's shareholders, but also brings great benefits to Ferguson's coaching. After the listing of the Red Devils' stock, not only did they further expand their influence, but their listing financing and football competition soon had a positive connection. The Red Devils won more funds through the listing, and Ferguson naturally had more transfer funds. The club's historical achievements and influence can be turned into higher-quality financial assets, and the club's market value has greatly increased, which will greatly help Ferguson to build a strong Red Devils.

In this way, the Red Devils Club successfully landed on the London Stock Exchange in 1991 as a sports company, achieved stock listing, and opened a new chapter in history.