Football Dynasty-Chapter 26: Lucky break in ownership

The Great Storm and Black Monday left deep scars across various sectors of society. The economic fallout from these crises triggered widespread job insecurity, with many businesses forced to cut staff, halt hiring, or even scale back operations due to the financial downturn.

The most affected groups were clear: first, homeowners and property owners; second, investors facing severe portfolio losses; third, business owners, as the storm disrupted operations and the crash made financing and credit harder to obtain; and fourth, the working class, farmers, rural communities, and pensioners, whose livelihoods were threatened by the economic instability.

Thankfully, local governments and emergency services were deployed to clear debris, rescue people, and restore public safety.

Social safety nets also provided basic support, though it came primarily through general welfare programs, rather than substantial direct financial relief.

Meanwhile, Manchester City's value plummeted to £8 million from £10 million after being relegated.

In the current era, football stands as the second-largest entertainment industry in the United Kingdom.

While that sounds impressive, the key challenge lies in the fact that, despite its size, the football industry remains fragmented and, like any other entertainment sector, is under significant financial strain.

This fragmentation results in a divided industry, lacking unity and cohesion. Various groups, organizations, and stakeholders operate independently, leading to disparities between leagues, clubs, management practices, and regional variations within the sport.

For football to thrive, it must be managed efficiently and profitably, both at the club level and nationally. To achieve this, the industry must unite, with a clear direction and a strong central influence.

Recent inconsistent decisions highlight the challenges faced by the football industry. A key example of this inconsistency is the use of generators and floodlights.

During the 1973 energy crisis, the government imposed electricity restrictions, including a ban on floodlighting for outdoor events. This disrupted football matches, leading to rescheduled games and reduced attendance. The FA raised concerns that football was being unfairly targeted.

Then, in the mid-1970s, the Safety of Sports Grounds Act 1975 was introduced, requiring clubs to install floodlights that met specific safety standards.

While the aim was to improve safety, the act placed a significant financial burden on clubs, leading to debates about the need for government support.

These two decisions essentially created a heavy burden for every football club. It was like being told, "You need to reduce electricity usage," only to follow that up with, "You must also upgrade your stadiums and install new floodlights."

This created a paradox: clubs were asked to cut costs and manage energy consumption, while simultaneously being required to make expensive upgrades to their facilities, putting them in a difficult financial position.

Ultimately, while it sounds straightforward, running a football club is far from easy, especially when you factor in the added pressure of meeting fan expectations.

So, what does all this mean?

It meant that football was never truly taken seriously. People didn't see it as a business; for them, it was all about enjoyment. Pure entertainment.

This also applied to the City board. What was once merely a source of entertainment had now become a platform for them to seek help. Talking about borrowing money, they could only manage a bitter smile.

No one had expected disaster to strike twice. Although the signs of a weakening economy hadn't yet appeared to the wider public, those with enough experience in business could already see them looming.

Take Eric Alexander, for example, the current Vice President of Manchester City. At just 19, he became the youngest member of the City 'A' team, a squad his father had established.

In 1955, after studying art at Manchester University, he joined the marketing department of the National Coal Board as a graphic artist. Growing up, he had encountered royalty, presidents, prime ministers, and tribal chiefs—his background was as prestigious as it was varied.

The Alexander family, particularly Eric and his father, had certainly earned every accolade that came their way, especially with regard to Manchester City.

It was while still working at the Coal Board that, at the age of 35, his father appointed him as a director at City. Eric took charge of the youth setup, the training facilities, and the Maine Road pitch. By November 1971, he had become chairman and had even completed an FA coaching course.

However, with only 87 shares (4.22%) in his possession, it was incredibly difficult for him to rally support, propose significant changes, or push forward any motions that would reshape the club.

Everything changed, though, after his father's passing. With his father's shares passed down to him, Eric's influence within the City board was suddenly far stronger. It was a shift that completely altered the landscape of the club, but it was a path that Eric had to navigate alone.

The Top:

Peter Swales, the Chairman, holds the largest portion with 619 shares (30.05%)

Simon Cussons, the Vice-Chairman, owns 566 shares (27.48%)

Joe Smith, Presidents, holds 366 shares (17.77%)

Among the Vice Presidents:

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Eric Alexander, now holding Albert Alexander's shares, owns 338 shares (16.43%)

John Humphreys holds 46 shares (2.23%)

Sidney Rose has 43 shares (2.09%)

Chris Muir owns 40 shares (1.94%).

Moving to the Directors:

Ian Niven possesses 21 shares (1.02%)

Robert Harris holds 20 shares (0.97%)

Richard Maddox holds 1 shares (0.05%)

People were growing dissatisfied with Peter Swales' leadership of the club—his approach was outdated, overly cautious, and lacked innovation. When they were relegated, the fans' frustration boiled over, and the board, particularly the chairman, became the target of their anger.

He was ousted, along with the vice-chairman.

Luckily, the FA Youth Cup allowed him to hold onto his position for a while. However, the situation shifted once again when Eric aligned himself with the old guard—those who had previously run the club alongside his father.

He also managed to bring Joe Smith into his fold, effectively raising his influence to nearly 40%, even if it wasn't officially reflected on paper. With this newfound power, Eric ensured that the appointment of a new chairman was inevitable.

Peter Swales and Simon Cussons were swiftly removed from their roles as chairman and vice-chairman.

Although Eric had no formal training in managing the coal business, he knew exactly where his strengths lay. The moment his father passed away, he made a decisive break from the Coal Board, instead opting to sign a contract with a Manchester advertising firm.

The coal business? He didn't know a thing about it. But running a football club? Now that was something he understood.

As a former football player, Eric had his own vision for the future of the club. Around this time, in addition to working with the advertising firm, he became more aggressive in his business ventures.

He also bought a sports shop in Rusholme from former player Roy Clarke, who had been managing City's popular social club. Unfortunately, the timing couldn't have been worse.

When the "Big Bang" hit, many supermarkets and chain stores began bulk-buying goods and selling them at prices lower than what smaller shops, including his new sports store, could even purchase them for.

This practice of bulk buying had a devastating impact on his business. As the storm and crash unfolded, the consequences became clear.

The middle-class exodus to the suburbs further impacted sales, and the Great Storm, followed by the market crash, sealed his fate.

The business, Alexander admitted, "was starting to suffer."

Now, the choice was clear—Manchester City or his business?

Even the most naive person would know when to be rational. Owning a football club was appealing, but at the end of the day, it was all uncertain.

Although City now had an annual turnover of nearly £1 million, that money was out of reach. FA rules prohibited club directors from being paid, and with dividends capped at 7.5% of the nominal share value, the most he could earn was just £42 a year.

The moment when Alexander—and the entire board—desperately needed help was as clear as day. However, they had no idea that this deal would haunt them for the rest of their lives.

"You?"

"Yes."

"Do... you have the money? Where did you get it from?"

Richard simply smiled.

Peter Swales, who knew him best, immediately understood—the gambling money. He sighed quietly in relief, thinking to himself, 'At least if he loses a bet, I might have a chance to buy them back.'

"Fifty percent above market value—I'll buy them for fifty percent more than the market price," Richard said confidently.

Who could resist such an offer?

The Great Storm and the crash hadn't only affected Eric; other board members were struggling as well.

Chris Muir, who owned a stationery business, was feeling the pressure. Meanwhile, Joe Smith, the Oldham-based double-glazing tycoon, was also hit as the demand for double-glazed windows plummeted.

Yet, the older Smith remained calm.

With countless homes and offices damaged by the storm, the need for repairs was inevitable. He knew that, sooner or later, people would need new windows and renovations, and his business would recover.

What he needed now was cash—to stock up on materials and ramp up production to be ready when demand surged. If he could secure enough funds, he wouldn't just survive the crisis—he'd come out even stronger, and everything would turn in his favor.

Vice President Chris Muir sold his 40 shares for £310,400.

Vice President and former chairman Eric Alexander sold 100 shares for £582,450.

Director Ian Niven sold 21 shares for £163,200.

Director Robert Harris holds 20 shares for £155,200.

Chris Muir was struggling to keep his stationery business afloat, just as Eric Alexander was working hard to sustain his newly acquired sports shop.

Ian Niven needed the cash to keep his Denton pub running—his salary as an engineering consultant simply wasn't enough.

As for Robert, the assistant managing director of Britain's largest retailer, Great Universal Stores, this was his chance to invest in something that aligned more with his career goals. Instead of holding onto City's shares, he saw a better opportunity in acquiring shares in Great Universal Stores.

Richard couldn't hide his grin as he stared at the shares now in his possession. Slowly but surely, he would begin to shape the club according to his vision. This was only the beginning.

Updated Share Ownership & ValuationTop Shareholders:

Peter Swales 619 shares (30.05%) → £2,404,000 (unchanged)

Simon Cussons 566 shares (27.48%) → £2,198,400 (unchanged)

Joe Smith 366 shares (17.77%) → £1,421,600 (unchanged)

Eric Alexander 238 shares *after selling 100 shares* (11.55%) → £924,500

John Humphreys 46 shares (2.23%) → £178,400 (unchanged)

Sidney Rose 43 shares (2.09%) → £167,200 (unchanged)

Richard Maddox 182 shares (8,77%) → £628,800

(after acquiring 100 from Eric Alexander, 40 from Chris Muir, 21 from Ian Niven, and 20 from Robert Harris)

Chris Muir, Ian Niven, and Robert Harris were out of the race.

Richard had spent a substantial £1,211,250 to acquire 8.77% of the club—a significant investment, but it wasn't enough.

His voting influence remained limited, and he was still far from having the power to sway decisions in the boardroom.

He could only sigh in regret, watching as Swales, Cussons, and Smith stood firm, unwilling to part with their shares.

'sigh... If only they were willing to sell...'

It wasn't quite what he had expected. All three were tempted by the offer—50% above market value was hard to ignore. But they weren't fools.

They understood that, while the offer was tempting, their shares still held considerable value. Letting go wasn't something they were ready to do just yet.

Unlike Smith, who believed his factory's cash flow was still healthy, Simon Cussons wasn't facing any financial struggles. As the owner of Cussons Group Limited, a giant cosmetics company, cash was never an issue for him.

In fact, his company was thriving. They had successfully expanded detergent production in Australia, strengthening their presence in the region. They also entered Southeast Asia with the acquisition of a factory in Indonesia, later expanding into Thailand, where they ramped up production of soap, toiletries, and baby products.

Peter Swales, too, had no intention of selling his shares. After selling 50% of his company—which had grown to 14 branches—to Thorn Electrical, he swapped his remaining 25% stake. Financially secure and freed from his main business commitments, he focused entirely on football.

In addition to Manchester City, he was the chairman of the Northern Premier League—a league he had created to establish a national competition with automatic promotion to the Football League.

He was confident that holding both the chairmanship of a club and a league would cement his place in football history.

And while Richard might have felt a twinge of regret, he was ultimately content with the outcome. Everyone was happy. But Richard? He was even happier.

Watford?

What was Watford?

How could Watford ever be compared to Manchester City?