When it comes to racing and breeding horses, millionaire John Magnier is a safe bet, so his decision to risk such a high stake on a football club is surprising, writes Barry O'Halloran
A number of John Magnier's horses are likely to line out in one of the feature races at the Curragh tomorrow. It's there - and at the annual sales of one-year-old (yearling) thoroughbreds, where he and his bloodstock agent, Demi O'Byrne, normally outbid rivals to walk off with likely Derby winners - that the racing magnate likes to make headlines.
But this year has been different. His horses haven't been performing to their usual record-breaking standards, and he's been letting his main rivals, Dubai's oil-rich ruling family, the Maktoums, share the running at the annual yearling sales here and in the US and UK.
Instead, the publicity-shy millionaire is making headlines for his joint purchase with J.P. McManus, through offshore company Cubic Expression, of a near 12 per cent of Manchester United earlier this week. The deal brought their total stake to 23.15 per cent. At the end of stock market trading on Tuesday, this stake was valued at €211 million. It looked like a very big punt indeed, even for Magnier.
It's unlikely that the furore surrounding the deal has distracted Magnier from his main business, which is producing top-class thoroughbred stallions for his Coolmore Stud operation. This occupies more than 2,000 acres near Fethard, Co Tipperary, with branches in the US and Australia. It is regarded as the best racing stud operation in the world.
John Magnier has worked with horses all his life. He was born in 1948, the son of Thomas Magnier, a farmer and horse-breeder at Castle Hyde, near Fermoy in north Co Cork. Magnier junior went to the exclusive Glenstal Abbey boarding school in Co Limerick, and then returned home to work on the family farm. Early on, he switched his attention from its cows to its horses. This brought him into contact with legendary trainer Vincent O'Brien, whose daughter Sue he married.
He bought Coolmore and in the early 1970s joined forces with O'Brien. They began to revolutionise the Irish and, ultimately, the European thoroughbred bloodstock industry. Their approach was simple: buy high-class yearlings in the US, which dominated the business then, race them in Europe, and stand them at stud here. Early on, his partners included English pools millionaire Robert Sangster, Greek businessman Stavros Niarchos and Frank Sinatra's manager, Danny Schwarzt. These days, his main partner is English businessman Michael Tabor.
He has not always had the Midas touch. In 1988, he, O'Brien and Michael Smurfit floated Classic Thoroughbreds on the Stock Exchange. Four years later, the business folded, with £12 million (€15 million) in accumulated losses. It cost Magnier an estimated £1.4 million (€1.8 million). The reason? The horses it owned failed to perform and thus had little value at stud.
Getting just one thoroughbred to the point where it can command five-figure sums each time it services, or "covers", a breeder's mare at stud is an involved and risky process. It begins with the purchase of a yearling with the right pedigree. The horse is then put into training, in Magnier's case with Aidan O'Brien (no relation to Vincent) at Ballydoyle, next door to Coolmore.
Magnier's horses are aimed directly at Group 1 races, which feature the best fields and the best prize money. His horses run as two-year-olds, but the crunch comes when they are aged three. At this stage, they run in Classic races such as the 2,000 Guineas and the Irish and English Derbies. Victory at this level opens the door to a lucrative stud career, as the general rule in thoroughbred breeding is that winners beget winners.
And Magnier has some of the best. Coolmore's leading stallion, Sadler's Wells, has topped the league for the sire (stallion) that has produced the most winners in a flat season a record eight times. Along with him, the list of Coolmore's occupants is likely to set the average racing fan slavering. They are all multiple group-one and classic winners, and breeders are prepared to pay anything from €10,000 to a sum in the low six figures to have them cover their mares.
This has made Magnier a lot of money. Just how much is a question that leaves a lot of people guessing. One estimate, based on his interests here and abroad, values his wealth at more than €300 million. Coolmore itself is not a limited or listed company, and does not file accounts. Magnier once described himself simply as its "managing partner".
Sources close to Magnier say the Irish operation turned over in the region of €60 million last year. But that was turnover, not profit. It employs 600 people, while Magnier has been known to spend up to €50 million in one year, though not as a regular annual figure, on bloodstock. It costs at least €2 million a year to keep all the horses in training.
Magnier is associated with a number of limited companies registered in this country, including Leading Sires (Ireland) and Leading Sires (Overseas), which hold shares in Coolmore stallions. Coolmore is the only visible connection, as Magnier is not named as a director or shareholder. However, an online search of company records under his name throws up these businesses.
Their directors include former Kerry Group boss Denis Brosnan, who is currently chairman of Horse Racing Ireland. Leading Sires (Ireland) had a profit of €1.8 million in the 12 months to the end of September 2002. Most of this was paid over as a dividend to its owner, Leisure Holdings (Ireland). Its documents show that the company has around 120 shareholders, either companies or individuals, who hold varying stakes in the business - €1.8 million would not go very far between them.
Magnier also has offshore interests, and some of the companies registered here that are connected with Coolmore are unlimited, and do not have to disclose any information about their earnings or assets. The reason is simple: the business does not pay any tax on its core source of revenues, stud fees.
There is also a question-mark over Magnier's own status. He is often referred to as a "tax exile", but one source close to Coolmore insists that Magnier does pay tax in this country.
Many people are opposed to the stud-fees tax break. For this reason, the publicity that Magnier has been attracting over the last 18 months is beginning to annoy others in his business. One bloodstock source says many smaller operators fear that the media attention will serve to revive pressure to remove the incentive. He argues that this will not damage Magnier, as he has the option of moving his stallions out of the country, but it will hit smaller players with just three or four syndicate-owned stallions, who could find themselves going out of business without the tax break. This, he adds, would have implications for the bloodstock industry as a whole, which employs close to 30,000 people.
"He's just giving ammunition to people who don't understand our business, or its importance to large numbers of people in this country," the source says.
And he certainly has been attracting a lot of attention for a man who shuns the media. Last year, there was a row with a company that wanted - inappropriately, as it turned out - to build an incinerator near Ballydoyle, and the high profile generated by his daughter Katie's marriage to horse trainer David Wachman in a celebration said to have cost €3 million. This year, there was the unseemly row with Manchester United manager Alex Ferguson over Rock of Gibraltar's stud fees, and then his investment in the club, which had some speculating that the dispute over the horse was at the back of the purchase
His old mate, Charles Haughey, was responsible for putting Magnier in the limelight in the past. First, he appointed him to the Seanad in 1987, where Magnier spoke just once, on the bloodstock industry. Then he appeared before the Moriarty tribunal after it emerged that a £10,000 (€12,700) payment from him to vet and former Aer Lingus chairman Michael Dargan had ended up being used to fund Ciaran Haughey's Celtic Helicopters. He was also questioned about donations to a fund for the late Brian Lenihan.
While it was not the right kind of publicity, it was nothing like the scale of attention that he is receiving now. You get the feeling he would prefer it if one of those horses running tomorrow would do the talking for him.