Man U’s Red Knights grow to 40 - but can they agree?

The Red Knights - the group of investors angling to buy Manchester United FC from the American Glazer family - have grown from 10 to 40 in recent weeks and, under the leadership of Jim O'Neill, chief economist of Goldman Sachs, are trying to hammer out a deal structure.

Reports suggest they are as determined as ever to wrest the club from Malcolm Glazer, despite this month's double whammy of disappointments: the club was knocked out of the Champions League by Bayern Munich last week and then on Sunday managed only a 0-0 draw against Blackburn, making it virtually certain that Chelsea will top the Premier League at the end of the season.

"It was a bad result," said club manager Sir Alex Ferguson after yesterday's Blackburn game. "We had to win every game going into today and we didn't do it. That is the disappointment. It has slipped away from us today."

According to the Observer, the Red Knights are trying to decide whether 50 investors will contribute £10m each, or a slightly lower number will provide more funds per head. Either way, the plan is to raise £500m from these individuals.

A further £250m will be raised by issuing securities to Manchester United's estimated 3.8 million fans in Britain and - in order to reach the total £1.25bn valuation - the Knights will retain the outstanding £500m bond issued by the club this year.

Manchester United's owners - Red Football Joint Venture Ltd - insist the club is not for sale, despite its debts and despite what looks like a disappointing end to the season. But Philip Long, a partner at accountancy firm PKF, long involved in football deals, says: "It will be [for sale] ­ everything's always for sale. The model at the moment isn't profitable unless they sell players. The club can't continue making the losses it's made."

Getting a strong kitty together from wealthy investors is not a problem for the Red Knights. What's proving difficult is coming up with a structure that satisfies the "egos and testosterone" of all the individuals involved.

O'Neill sees the bid as, ultimately, an act of altruism, with the fans eventually buying out the investors. He foresees the Knights getting only a small dividend or return on investment. But not everyone sees it that way.

As the Observer reports, "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 £1bn."

Jimmy Burns, the 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." ·