The mess Thaksin left behind at Manchester City
Thaksin obviously dumped City like a hot potato when his political mistakes at home finally caught up with him.
Manchester City’s fortunes wane and wax in tale of two billionaires
Manchester City’s accounts reveal the cost of Thaksin’s ownership but the club’s strategy under Sheikh Mansour seems secure
Standing outside a teeming Eastlands before last week’s Uefa Cup quarter-final second leg against Manchester City, Oliver Scheel, a director elected by Hamburg’s supporters, extolled the virtues for the club of being wholly owned by its 60,000 fans.
“A membership club is democratic and it strengthens supporters’ identity with it,” he said, surrounded by fans of the Manchester club owned by an Abu Dhabi sheikh. “Hamburg cannot fall back to zero rapidly because we do not depend on one man’s money.”
Thaksin Shinawatra’s tumultuous year owning City came perilously close – as the club’s recently published accounts reveal – to proving the dangers for Premier League clubs of being up for sale to random rich men. It was his and City’s great fortune to be picked up last August by Sheikh Mansour, who, having spent more than £300m already, is intent on demonstrating the art of being a good billionaire.
The rhetoric of Sulaiman Al Fahim, the takeover’s original front man, who talked of “very deep pockets” to buy Cristiano Ronaldo and a sticker-book of other galácticos, alarmed Mansour by setting exactly the wrong, wad-waving tone and Al Fahim was quickly removed. Club insiders accept ruefully that January’s Kaka bid, and its unseemly collapse, seemed to confirm that loadsamoney impression. Yet they insist that Mansour and his chairman, Khaldoon Al Mubarak, chairman of the Abu Dhabi government’s Executive Affairs Authority and one of the emirate’s highest-flying executives, are setting out a 10-year plan for City based on solid foundations, without hollowing out the soul of the club.
Attention has focused obsessively recently on Mark Hughes’s security as City’s manager, and his position will be reviewed in the summer, but the owners point to wider investment in the club designed to support him. After Mansour bought City from Thaksin for a reported £210m including debts, Khaldoon, on his first visit, found the gym at the Carrington training ground seriously inadequate. The medical centre was described by one insider as “like the treatment room in M*A*S*H”.
Robinho was signed for £32.5m as part of the takeover deal, and the source reflected: “We had Robinho but no decent gym.” Khaldoon, on that visit, ordered a world-class gym and medical centre to be built.
Thaksin, hailed by the majority of City fans when he took over in June 2007, was supposed to be the billionaire to convert blue moon to gold. He was welcomed despite long-standing human rights allegations against him when he was prime minister of Thailand, corruption charges and £800m of assets frozen under the military government which overthrew him.
City were sold to him because the former major shareholders, John Wardle and David Makin, could not fund them any further, but the accounts, covering the year to 31 May 2008, show City lost £33m up to then under Thaksin, and their bank borrowings increased from £49m to £64m. The amount owed to all creditors ballooned from £134m to £209m. Yet still a further £49.5m was spent last summer, including £19m on Jo, bought from CSKA Moscow.
Few at City doubt that Thaksin used the club to boost his own standing in Thailand. Thai dignitaries were entertained at matches and the City team taken on a tour of the country – for which, the accounts show, £47,912 was paid for PR services to a company owned by Thaksin’s son, Panthongtae Shinawatra. Thaksin’s own total contribution has been itemised: £17.5m to pay off Wardle and Makin’s £20m loans, and he also lent the club £21m, at annual interest rates of up to 11.83%.
In August last year, Thaksin’s wife, Pojaman, was sentenced to three years in prison for evading millions of pounds of tax in connection with a 1997 shares transfer deal. The couple skipped bail, fleeing to Britain after attending the Olympics opening ceremony in Beijing. City, by then, had borrowed a further £25m from Standard Bank, and it emerged that Wardle had on three occasions lent the club £2m to tide it over cash-flow difficulties.
In October 2008 in his absence, Thaksin was sentenced to two years in prison by Thailand’s supreme court for having in 2003 abused his authority as prime minister to facilitate Pojaman’s purchase of land in Bangkok. A month later, the government here barred him from entering the UK as “not a desirable person”. In February City removed him from the position of honorary president which had been agreed when he sold up.
Mansour has, it is understood, paid off Thaksin’s loans and the bank debts, although he has made his investment by loans of his own. More recently the club appointed a senior team to work with the chief executive, Garry Cook, including the former Arsenal winger Brian Marwood, lately head of Nike’s UK football operation, as a football administrator, a technical role and link between Hughes and Jim Cassell’s flourishing academy.
Kaka apart, the new regime maintains the players actually signed in January set the true tone of their approach, which is to develop a smaller squad with two top-class players in every position. Under Thaksin, they say, signings were made without long-term planning and it is not clear how much Hughes was even involved with some of them. City had one of the Premier League’s largest squads, yet with some of the least Premier League experience.
Wayne Bridge, Shay Given and Nigel de Jong are regarded as solid signings for the future, and Craig Bellamy a striker right for a team in transition. Some scoff, arguing that, at £53m for those four, City overpaid, but Mansour’s team are happy it was reasonable business, particularly for January. Although Cook was widely derided for his comments after the Kaka deal fell through, the club insists that the substance of what he said was true, that City were the party that pulled out. Hughes himself said inexperience in how football deals are done was a factor in City being burned so badly, and the club says lessons have been learned.
The list for this summer will undoubtedly include some top-rank players, including David Villa from financially stricken Valencia, and Mansour’s team believes that in a recession, and with other clubs’ debts beginning to bite, it will be a buyer’s market in which they will not overpay.
Hughes has said, too, that four or five transfer windows are necessary to assemble the squad City want, which makes £200m-£250m a working estimate for what Mansour will spend. Added to the cash spent buying the club and signing Robinho, that would take Mansour’s investment in City to about £500m within two to three years.
That, sources say, remains significantly less than it would have cost to buy a ready-made top club, and City, with its “till-I-die” support and new stadium already built – unlike Everton or Tottenham – was the major football opportunity Mansour had been waiting for when Thaksin’s representative, Pairoj Piempongsat, arrived, cap in hand, in Abu Dhabi last year.
Mansour’s people sympathise with the position Hughes was in when they took over and admire the application and attention to detail of the man they describe as “the brightest young manager in the Premier League”. Yet City’s 10-year plan demands success along the way and, for all the goodwill, Hughes requires a strong finish in City’s final five matches, which include the Old Trafford derby on 10 May, to head into the summer review demonstrating overall progress. He will also need to resolve the doubts about whether he can wrest the best from Robinho, Elano and other stellar names, not just on big European nights, but on winter fixtures away in the league.
“I am proud,” Scheel said last week, “that a club owned by its fans can beat one owned by a billionaire.” Sheikh Mansour is planning to establish that as billionaires go, Manchester City did get lucky – second time around.
’Embarrassed’ Thaksin offers to quit
Manchester City owner Thaksin Shinawatra has offered to resign from the board at Eastlands, executive chairman Garry Cook has revealed.
The former Thai prime minister flew to Britain last week instead of returning to his homeland to face court charges, calling into question his future at City.
The Premier League are looking into the situation amid claims Thaksin could fail the ‘fit and proper person test’ for involvement in a top-flight club.
Cook said: “Dr Thaksin is embarrassed about the indignity brought on all the entities – the club, the Premier League – he never intended this.
“Dr Thaksin has been really open about this. He has said to me, ‘if you need me to resign from the football club as a director, because it would serve the needs of the Premier League, then I’m fine with that as long as that doesn’t change any other thing.’
“I think there is a very loose term about what is ‘fit and proper.’ It is almost a tongue-in-cheek term that you would use for Premier League football over the last 10 years. There are plenty of unfit and improper individuals.”
Cook also admitted Thaksin does have financial constraints – his assets have been frozen in Thailand – but denied it will be a major problem for City.
“Dr Thaksin is in a political situation and a case that affects his assets, so that’s well documented. So that’s a hurdle,” Cook said.
“The truth of it is this club is not going to go out of business. This club is not bankrupt. We’re moving forward.”
Cook revealed Thaksin will not be present when City host West Ham tomorrow because of fears for his safety.
“He wants to be at this ground on Sunday but he is hearing advice about being in a public space,” Cook added