Everything has a price, but for now at least, it seems as if that price has not yet been reached for Manchester United and the Glazer family.
United have been on the market since the days after Liverpool owners Fenway Sports Group publicly revealed back in November that they were considering their own position at Anfield with regards to investment or a full sale.
As it turned out, FSG’s intention was always to seek a partial sale of their equity in Liverpool to recapitalise the business ahead of what is expected to be an expensive rebuilding process.
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There was much chatter around Liverpool and just who may come in, with erroneous links to Qatari talks and issues over the sale price suggested online. Well-placed sources in the US have always maintained to the ECHO that the plan has been a partial sale all along, unless someone came in with an offer that was simply too good to turn down.
Liverpool are valued by their owners in excess of £4bn, but with considerable upside still remaining in terms of the potential value that the club could reach in the future; a view held among some US investors that the ECHO has spoken to. The desire to retain ownership and bring on board a ‘strategic partner’ to deliver the capital sought means that FSG are likely custodians at Anfield for some time to come.
FSG principal John Henry, speaking exclusively to the ECHO last month, said the commitment of the ownership group to the club “remained stronger than ever.”
The investment search has, it is understood, advanced in recent weeks, and there is a more buoyant mood around the hopes of it being completed in the coming months, potentially during the summer. Timescales, however, have not been discussed, and a summer spend is likely not predicated on the deal being inked ahead of time.
For Manchester United the search has been different. The Glazer family, deeply unpopular owners ever since their leveraged buyout of the club back in 2005, looked to be on their way out of Old Trafford when they engaged the services of the Raine Group, the US merchant bank that conducted the expedited sale process of Chelsea last year.
Bids for the club have been forthcoming at two ‘soft’ deadlines, from the chairman of the Qatar Islamic Bank (QIB), Sheikh Jassim bin Hamad Al Thani, and British billionaire and founder of chemical firm INEOS, Sir Jim Ratcliffe. There has also been interest in a minority stake from the likes of New York-based investment fund Elliott Management, the group who sold their controlling interest in AC Milan to FSG’s 11 per cent stakeholders RedBird Capital Partners last year.
Bids in excess of £5bn and, in the case of Sheikh Jassim, understood to be closer to £6bn, have been made for full control of United, but that has yet to move the needle sufficiently for the Glazers to part company with their asset and there is a growing sense that the American owners could remain in situ, something that has been reflected in the club’s performance on the New York Stock Exchange in recent weeks, where the share price dropped five per cent. On March 22 shares in the club on the NYSE stood at $25.62, but at the close of play on Thursday, April 6, those same shares were worth $21.69 as concerns grew at the lack of progression with regards to the sale process.
Valuations of football clubs are a hot topic. For some an offer of £5bn and above for United would surely be enough for the Glazer family to part company with the team they’ve owned for the last 18 years. For others, including, crucially, the Glazers themselves, they feel that club is a global asset that is on par with any of the major American teams in terms of its reach and potential. Those same American teams, such as the Dallas Cowboys NFL team and the New York Yankees MLB team, are valued at $8bn and $7bn respectively.
FSG look at Liverpool through a similar prism in terms of there being considerable road left to travel down, particularly with the increasing interest from the traditionally hard-to-break US market when it comes to European football. That, with a pivot in certain areas to a direct-to-consumer model that can reach fans and customers globally to enhance revenues and further the value of the clubs themselves, means that assets like Manchester United and Liverpool are extraordinarily rare.
Recent research from the CLV Group, a London-based company that works with global sports teams to unlock revenue opportunities from their fan bases, pointed to United currently gaining a figure of around $0.77 average revenue per fan against their active users globally. That was in contrast to the $136 that the Dallas Cowboys were able to achieve when it came to their own average revenue per fan against a far smaller pool of global fans.
Speaking at the VSI Executive Education Knowledge Exchange series event in Manchester last week, CLV co-founder Neil Joyce said: “Imagine if you could double the size of your known fan base, you are going to go a long way to increasing your average revenue per fan.
“Manchester United, we believe, if they do this right then they could add £250m to £300m per year in revenue if they looked at the US and the Middle East. If you add India, that could be £450m. Based upon enterprise valuation, you’d be looking at £2bn on to the value of Manchester United.
“If the Glazers know that, they aren’t going to want to sell. Likewise, anybody looking at buying the club knows that they are going to have to pay an inflated price for buying the club today but there is a lot of revenue opportunity to drive future value against all of that.”
Speaking at the same event, Dr Rob Wilson, a football finance expert and senior lecturer at Sheffield Hallam University, reaffirmed his stance that the club was worth more than the figures mooted so far.
Speaking at the VSI event, Wilson said: “I’ve been pretty consistent that I think that Manchester United is a £7bn business and I think the Glazers would be crazy to sell for less than that from a business perspective.
“Manchester United is as big as any sports team in the world and has one of the biggest fan bases globally.”
Liverpool’s own valuation will be linked to how much their rivals do eventually go for, or even sell a portion of the club for. Liverpool and United are sporting assets that are closely aligned through both success and global potential, with the former having made up significant ground on the latter over the past decade.
For FSG, they will know that the prospect of values slumping, in the longer term, provided the short-term dip in the on-pitch offering doesn’t become something that lingers, are smaller than the chances of valuations continuing to rise in the coming seasons, meaning that upside remains.
As FSG are likely seeking to do with regards to selling a slice of the club to a partner with whom they share a simpatico relationship, and who could accrete a minority shareholding into a full takeover further down the line, so too the plan for the Glazers and Manchester United could centre around something similar. That would, however, be an unpopular move among a fan base who have been vocal in their opposition for the best part of two decades.
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