Amid the backdrop of a potential sale of the club, and on the same day as fans protested against the ownership of the Glazer family outside of the megastore at Old Trafford, Manchester United announced some healthy financial results.
As a Plc, traded on the New York Stock Exchange, United provides quarterly earnings reports for its shareholders. And while the stock price has fluctuated significantly during the past six months or so, with markets reacting to developments surrounding the potential takeover, the financial performance of the club has remained steady, with the latest report that the club grew its revenue 11 per cent to £170m for the three-month period ending March 31. That was enough to see its stock jump and add another $250m to its market capitalisation, which now stands at around $3.9bn.
The resilience of the club financially despite the ongoing ire from fans towards the ownership seemingly dragging its heels over a sale, demonstrates another reason why the Glazer family are still considering their longer term position, with they, like many ownership groups, seeing more financial upside further down the line.
That is a view that is shared by the likes of Fenway Sports Group at Liverpool, who quickly pivoted from searching for a buyer to searching for an investor last year. That continues to be a fluid situation, although there are no firm timescales on when or if that comes to fruition, but the desire for FSG to stay at Anfield remains.
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FSG acquired the Reds for £300m back in 2010. Since then the ownership group have seen the value of the Reds as an asset soar above £4bn. That isn’t simply down to an improved infrastructure or on-field success, although both of those things have been positive factors in the valuation rise.
It is, largely, down to Liverpool’s global appeal, one that only a clutch of clubs have, and how the growth of the Premier League’s global brand through booming media deals and commercial partnerships has allowed for the valuations of the biggest clubs to rise significantly year on year.
In the earnings call to investors earlier this week, Manchester United CEO Richard Arnold hinted at why owners see the benefits of either keeping hold of their assets or being willing to hold out for the very best price. Premier League football has proved remarkably resilient in recent years in terms of continuing to be a cash cow. The pandemic caused heavy losses among many but any concerns over diminished interest through that period quickly dissipated when stadiums were back open to fans. And even now, in the midst of a cost of living crisis, where household budgets are squeezed, football still continues to find itself able to weather the macroeconomic situation.
Arnold said: “Despite global economic headwinds, we see strong tailwinds to the value of global TV rights of the Premier League and UEFA competition, and a competitive sponsorship market with many new market entrants looking to build and strengthen their brand through association with leading global sports brands such as ours.”
The willingness of broadcasters to continue to pay big money, and for commercial partners to continue to see the value proposition in the Premier League and its global appeal, has allowed for some optimism among owners, optimism that has also been aided by moves made by both UEFA and the Premier League, to bring about greater financial controls that would provide greater cost certainty to owners.
The continued inflation of wages and transfer fees can’t continue indefinitely and there will be a ceiling with what broadcasters, whose money underpins the Premier League’s strength, would be willing to/can afford to pay in time without cost control.
For the likes of FSG, Liverpool continues to be an asset in growth mode. Premier League teams still trail some of their North American counterparts when it comes to valuations despite the global popularity of the league outstripping almost every other competitive sporting league on the planet. Those valuations will climb still, but in order to see that continued ascent the need for competitive performance year in, year out to maintain a compelling product is more important than ever, more so than in North American sport. That requires continued investment into what happens on the field.
