Chapter 491: Chapter 491
On August 10, 1998, the Spice Girls were at the top of the music charts.
Not to mention Oasis. Their single "All Around the World" hit No. 1 on the UK Singles Chart.
Meanwhile, Radiohead released their critically acclaimed album OK Computer, which became one of the top-selling albums of the year, firmly placing them among the elite. According to a chart-watching publication, by late 1998, Radiohead’s significant album sales had put them high up in the year-end tallies.
Added to that, the newly formed Irish pop group Westlife made their first live television performance as a group on the Irish TV series The Late Late Show, where they performed "Flying Without Wings." Unlike other groups, they didn’t just "fly" metaphorically—they literally sang about flying, using wings this time.
These four lined up, making Harry Maddox one of the most influential figures in the British entertainment industry. So Richard wasn’t surprised at all by how he came up with the idea to put the FA into trouble.
What Harry gave Richard wasn’t old news. It was the Keith Wiseman scandal—the allegation that Wiseman structured a £3.2 million loan to the Welsh FA to win votes in support of his bid for a seat on the FIFA Executive Committee.
To be honest, the person who first exposed this to the public was Richard himself, when he faced the FA toe-to-toe in the Supreme Court early in his football management career. At that time, Graham Kelly became a victim of the fallout, but Keith Wiseman survived the issue.
When Harry handed this information to him, Richard knew exactly what he meant.
’Let’s cook it again!’
It came at a sensitive time: England was preparing its bid for the 2006 World Cup.
So, according to Harry, let’s make it like there had been a year-long plot by certain FA figures to oust Chief Executive Graham Kelly, and the loan scandal was leveraged by Wiseman’s opponents to force Kelly’s resignation.
It was all about timing—how to trigger a leadership scramble within the FA, with various high-profile figures positioning themselves to replace Wiseman.
Harry suggested exposing the issue in broader terms: from Wiseman’s loan scandal to the fact that some FA chairmen allegedly approached him about removing Kelly, highlighting the deep internal political conflict.
Harry said, the loan issue was just a catalyst in a year-long plot to unseat Kelly. All other controversies flowed from this central scandal—power struggles, questionable governance, political motivations, and reputational fallout.
To be honest, Richard was surprised at how smart Harry had become after becoming CEO. Still, he thanked Harry for his help.
Now, if Richard chose a certain media outlet, the news would naturally explode—but he decided to pause the release of this news for the time being.
The response was simple: he waited for Piers Morgan’s news.
To be honest, Richard didn’t care much about Piers Morgan’s controversies. He knew that, no matter what happened—even years into the future—Morgan would rise to become one of the most influential journalists in Britain.
In fact, Richard had even considered recruiting him as one of his journalists later, if he managed to acquire a media company.
Not talking about media companies at the moment, Richard drummed his fingers against the table before heading to Maddox Capital the next day.
Thanks to Adam Lewis’s efforts, TheGlobe.com stock had now been fully sold, which meant Maddox Capital had fresh cash to deploy.
Still, Richard couldn’t help but grumble about the U.S. state taxes that had taken a bite out of his proceeds when he sold the shares—he had been in a rush, after all.
Long-term capital gains (for assets held >1 year) were taxed at 28%.
Short-term gains (assets held ≤1 year) were taxed as ordinary income, up to 39.6%.
Now, including these taxes, Richard sighed.
The U.S. state taxes had taken a bigger bite than he had anticipated.
$120,960,000 was the total gain he received after selling TheGlobe.com, down from the original $168,000,000 he had received.
With that, he withdrew a total of £80 million first, as he needed to start repaying the loan he had taken from Barclays and Lloyds Banking Group (£700 million to be repaid in installments over 46 years) after buying Rover. Another £40 million was withdrawn, and Richard immediately went to 54 Lombard Street, London, where Barclays Bank PLC located.
Major banks like Barclays, they offered a range of investment products: stocks, bonds, mutual funds, and wealth management services for high-net-worth individuals (HNWI) or institutional clients.
Richard then deposited £80 million into Maddox Capital’s account. With Taylor Smith as his relationship manager, he completed the registration procedures and established the investment company’s account at Barclays Bank. Once that was done, he requested a prepayment option, allowing him to pay more than the annual installment and reduce the principal faster.
Loan amount in 1994: £700M
Annual payment: £15M per yearTime passed: 1994 → 1998 = 4 years
Calculate total paid in 4 years : 15M/year×4 years=60M
Subtract from original loan : 700M−60M=640M
Remaining loan by now: £640M
With this prepayment option, after 4 years of regular payments and the one-time prepayment of £40 million to each bank, the remaining loan would be £600 million in total.
Down with loan issue, Richard also set up private custody accounts for equities and bonds, depositing another the last £40 million there.
After all, no matter what, Barclays Bank, as one of the four largest private banks in the UK, was poised to become one of the largest banks in the world in the future. Richard still hoped to establish a cooperative relationship with them.
Another reason for choosing Barclays was that it not only provided dedicated securities accounts to directly purchase U.S. stocks, including those on NASDAQ, but also made it more convenient to buy British stocks and futures products.
Barclays Bank is also a key partner for accessing the American stock market from the UK.
Moreover, in the UK, there is no equivalent to a standalone securities firm. Commercial investment banks serve as the intermediaries for securities trading, and Barclays, as one of the four largest private banks, offered these services.
When the other party saw that Richard had blown more than a hundred million in not one, but a double whammy of transactions in a single day, they didn’t just blink—they immediately crowned him ’Saint Richie of the Spend-O-Lot’.
Following that, Richard instructed his RM manager, Taylor Smith, to begin purchasing BSkyB (Sky Sports) shares on the London Stock Exchange.
Richard clearly motivated by Murdoch’s failed attempt to buy Manchester United.
Well, if he were Murdoch, he would definitely have been interested in Manchester United as well. On a commercial footing, United were clearly becoming a beast after Alex Ferguson took the helm. From what he know, pre-tax earnings spiked from £4 million in 1993 to £27.6 million in 1997.
The BBC, assessing the takeover bid, noted that "fans were queuing up to buy anything from soap to replica shirts emblazoned with the club logo."
Because even by now, the club earned almost as much from merchandising as it did from gate receipts. The club also planned to open retail outlets in the Far East and had built a restaurant and museum at Old Trafford, transforming the stadium into a tourist attraction.
Added to that, in the same September now, Manchester United TV begins broadcasting, making Manchester United F.C. the world’s second football team to have its own television channel, MUTV in a joint initiative with BSkyB and ITV as a subscription platform. The first being Middlesbrough (Boro TV) in 1997.
Originally, Richard did not want to take any action, but suddenly, after the UK government blocked the takeover, Murdoch publicly expressed disappointment and noted his surprise, comparing the decision to how media-sports deals were handled in the U.S. New ɴᴏᴠᴇʟ ᴄhapters are published on NoveI-Fire.ɴet
At the same time, BSkyB’s chief executive, Mark Booth, called the ruling "a bad decision for British football clubs... who will have to compete in Europe against clubs backed by successful media companies."
This comment instantly raised the tension by two bars, and not only that, it arguably set a precedent.
First, the episode galvanized a fan-shareholder movement against media ownership of clubs, leading to the emergence of "fan power" as a political force in UK football. Second, many investors were wary, particularly given the ongoing tension between Murdoch and the UK Monopolies and Mergers Commission (MMC).
For investors, the uncertainty was compounded by BSkyB’s financial situation: operating profits fell 58.6% year-on-year, largely due to the costs of launching Sky Digital. On top of that, BSkyB suspended dividend payments to fund this heavy digital investment.
The very aggressive digital rollout was hurting short-term profits. Not to mention, rumors also suggested that the company was investing heavily in customer service: the annual report notes that they trained thousands of new customer-service representatives (~3,000) to handle demand from digital customers.
BSkyB was planning to give away set-top boxes as part of a free-box strategy, willing to absorb short-term losses in order to build a large digital subscriber base. As a result, shareholders were likely facing a gamble. The high cost of sports rights added to the pressure—for example, in that year, sports rights accounted for 42% of their programming budget, with the EPL contract alone costing an extra £92 million.
While some shareholders wanted BSkyB to reconsider its plans, the company instead announced that BSB Holdings Ltd, which held a significant stake, had reduced its holdings: the document states they "disposed of 1% ... retaining an 11.8% stake" by December.
This indicates that, despite careful planning, BSkyB was doubling down on heavy investments, while some large shareholders reduced their exposure—possibly reflecting the risk profile of its aggressive strategy. The company’s capital strain, especially combined with its digital rollout, caused many investors to step back from the gamble—but Richard saw this as an opportunity.
For him, even though BSkyB had strong EPL rights, the emergence of other platforms and broadcasters in the future could threaten this dominance. Management likely understood this, hence their digital push. Richard shared the same vision, seeing the long-term potential and growth opportunity in the company’s strategy.
So, £20 million was set aside specifically to acquire a portion of BSkyB shares privately.
Maddox Capital, to be honest, also had a tiny toe in the pool with BSkyB, but it was only 1%. But when Richard swooped in, come Murdoch’s attempted takeover, and the shares practically went to the moon. So, sold, the remaining 3% shot up like fireworks.
All the while, Richard wasn’t just playing the stock market; he was also managing two mega hotels, the St. Pancras Renaissance and the Britannia Inter Continental London. So yes, the money went there—not to mention he was also preparing to acquire Take-Two Interactive.
For the £20 million, these funds will be invested in the U.S. stock and futures markets in the form of margin, through a financing agreement signed with Barclays Bank. As someone who had been absent for who knows how long, Richard did not know the details, but he understood the outline.
1995 – Dot-com Bubble Begins
"Hmmm," Richard rubbed his chin in a daze.
Now, talking about the crash—wasn’t that the Asian crisis that happened last year?
He was so focused on Manchester City that he even forgot about this.
What he means is the 1997 Asian financial crisis.