At first glance, Leicester City’s latest takeover looks like the standard modern football ownership deal. A heady mix of over-ambition, multi-million pound transfer budget promises and “the Premiership within five years” (its been the Premier League for over three years now and still some of them get it wrong). On closer inspection, though, differences emerge. The very presence of Serbo-American former Portsmouth owner Milan Mandaric guarantees regular breaks from the norm. And, more importantly, the real motivation for this takeover has been made clear by the potential new owners. But with so many uncertainties and contradictions focusing the minds of so many observers, this real motivation has been overlooked, almost lost.
Mandaric, owner of Leicester since February 2007, has been making regular-as-clockwork pleas almost ever since to investors to help “ease” his Leicester City “burden” whilst all the time claiming that he was “not actively trying to sell the club.” The latest of these denials arrived, on time, last month. “I’m not about to sell Leicester City, vows Milan Mandaric,” ran the headline in Leicester’s Mercury newspaper. But, on this occasion, Mandaric spoke of “on-going negotiations” with “several interested parties.” A club statement added that “(he) has always maintained that he welcome the right partner to help him move the club forward.” And he rounded things off with a solemn pledge. Whatever transpired, “The Leicester City fans would be the first ones to be told the truth.”
Three weeks later, Mandaric announced a takeover deal with Thailand’s 27th-richest man, 52-year-old Vichai Raksriaksorn and a “consortium led by Thai businessman Aiyawatt Raksriaksorn”, Vichai’s 25-year-old son. And he added that he would “stay on as chairman and hold a minority stake in the club for the next two years. This is not an arrangement with a hugely successful track record, as Portsmouth fans are bitterly aware. Although there is no remote suggestion that Vichai and Aiyawatt share any of the ‘colourful’ history of the Gaydamaks, who were Mandaric’s Pompey legacy. Indeed, Vichai is President of the Ham Polo Club in South-West London suburbia. So he must be fit and proper – as well as “fit and proper.”
But the club’s 600-word announcement contrived to overlook some important details. Amid considerable guff from Mandaric and his chief executive, the never-knowingly-popular Lee Hoos, there was no reference to trivialities such as how much of the club had been sold, for how much, and specifically to whom. These were vital questions, not only because they were…well…the vital, issues of any such deal, but also because conflicting stories about these and every other conceivably linked matter were appearing in media, old and new, from the East Midlands to South-East Asia.
Mandaric had accused the media of “creating their own information” when stories first emerged that the Thai consortium were buying 49% of the club for £26m. “It is all false information. We are not even close to talking about anything close to those kind of details,” he insisted. “I have no idea where it comes from.” The figures did though make some sense, in the light of what Mandaric had said about easing burdens without ceding control. 49% would specifically not cede control, while £26m specifically would clear the club’s over all reported debt.
But in newspaper reports of the takeover announcement – if not the announcement itself – different figures emerged, about which Mandaric appeared to have no quarrels or queries about source. Raksriaksorn senior would take a 60% stake in the club, while “Mandaric and a third, as yet un-named Asian business person would own the remainder.” So far, so vague. As per. But it soon seemed as if Mandaric had himself been “creating” his “own information. A week after the takeover announcement, the Raksriaksorns held a press briefing in Bangkok’s Pullman Hotel (prop: Vichai Raksriaksorn). And the Mercury’s second-hand account said: “Vichai Raksriaksorn is the mastermind behind the Asian Football Investments Corporation that took over City last week after buying a 100% stake in the club.” And the “mastermind” added that “he would reduce his 100% share in the club to 51% in the future by allowing co-investors”, plans he seemed rather more able to carry out than his “60%” stake suggested.
In the same report there was further confusion about one of the nuts and bolts of the deal – the transfer budget available to new manager Paulo Sousa. “Sources close to the deal” had suggested a figure of “£4-5m.” Vichai told his press briefing: “We will provide financial support…to buy new players…The Budget may be more than £10m.” And there was more. Vichai also said that “Paulo Sousa would be allowed to look for all his recruits,” an award of transfer market authority and autonomy which didn’t fit exactly with Aiyawatt’s later reported suggestion “that he (Aiyawatt) would have a say in which players would be signed.” Because, where better to look for advice on building a Football League Championship side than the mind of a 25-year-old Thai businessman with no previous involvement in the game?
So Mandaric, it seemed, had found kindred spirits. Because he was simultaneously back home “creating” some more information, claiming a hyper-inflationary increase in his financial contribution to the club during his tenure. At announcement time, he “said he had put more than £9m into the club” and that he “would make a loss when he came to sell.” By the end of this week, he was suggesting he “would probably get part of it back” after claiming he had “put at least £21m into the club.”
This figure was neither challenged nor broken down and accounted for. And it prompted one Mercury reader to comment: “If that greedy Mandaric invested £21m into City then I’m dating Kim Kardashian,” which, at my age, I have to assume is cynicism. More pertinently, it has emerged that the Football League are as partly and confusingly informed as the rest of us, which has become particularly important since August 4th, when its member clubs – Leicester City very much among them – voted in new “owners and directors” regulations.
These stipulate that considerable detail of any takeover’s protagonists and the source of their funding be related to the League in advance of any announcement of such a deal, even an announcement such as Leicester’s afore-mentioned 600-word allergy to facts. This clearly hasn’t happened, as the protagonists themselves don’t seem entirely sure. And Mandaric stated that the un-named “third man” in the deal would only “be named in the next few months,” and “has yet to formally sign up to the deal.”
In such circumstances, ratification is some way off. Under the new chairmanship of, fate would have it, a former Leicester director in Greg Clarke, the League have made a big play of transparency in takeover deals and ownership and finances in general. Clarke is not involved in the ratification process due to the obvious potential conflict of interest. But he would have been unlikely to let Leicester off lightly anyway. He became a “former” Leicester director in January 2007, a month before Mandaric’s own takeover and because he disagreed with it.
It’s an attitude which ought to lengthen his Christmas card list this year. But a worrying number of Leicester fans seem very trusting of Mandaric and his ilk. When the Leicester Supporters Trust, the ‘Foxes Trust’ called last month for fans to be better informed about takeover proceedings, they were met with hostility and opposition. And not just from those who were clearly asleep when Munto Finance ‘got involved’ at Notts County and consider their own Trust to be self-important, interfering busybodies. Another Mercury reader wrote: “Mandaric walked out at Pompey and made a cool £42m. If he does the same at LCFC well good on the bloke.”
Such people have been swayed by Mandaric’s persistent trumpeting of his own efforts at Leicester, and are willing to overlook his mediocre record (better than Hicks and Gillett, who took over Liverpool a week before Mandaric arrived at Leicester). And they focus less on Leicester’s considerable annual financial losses (£6m in 2009, £14m in 2008) than his claim, last March, that what money there is “is always coming out of my pocket, out of my money in America, what I work very hard to earn… and pay all my taxes on” (yes, he really said that).
Most concerning for everyone, though, is what has really got the Thai consortium involved. Mandaric had insisted on his partners being in it for the game rather than the money. The Raksriaksorns are certainly that and are more honourably motivated than the last Thai in English football – Thaksin Shinawatra at Manchester City. It’s just that, as Vichai openly admitted last week: “Many investors have already approached me to be shareholders in my consortium and we all have a similar goal – to build Thailand as a football academy for Asia in the future.” As a method of “building” Thai football, it’s a few notches above making Peter Reid national team boss. But Leicester, its own academy and all that “Premier League as soon as possible” stuff, is, quite possibly, just a means to an end. So maybe Mandaric was up-front and honest when he said that “The Leicester City fans would be the first ones to be told the truth.” Because, until now, no-one else has been.