Manchester United are up for sale. The Glazer family, United’s owners since 2005, has announced it is exploring “strategic alternatives to enhance the club’s growth,” but strip away the carefully layered lines of the statement and one word jumps straight out — sale.
Ever since angering United’s supporters by borrowing heavily against the club — who were then debt-free, but the latest financial statement revealed a net debt of £514.9 million — to fund its takeover 17 years ago, the American family, which also owns the Tampa Bay Buccaneers NFL franchise, has repeatedly stated that it is long-term owner with no intention to sell up.
But less than a month after Liverpool were made available by their American owners, Fenway Sports Group (FSG) for £4.4 billion, United are now also on the market and will likely be worth at least double. It means that the Premier League’s two biggest and most historically successful clubs now have uncertain futures.
The selling of the club is due to several factors. There isn’t one particularly central reason. The Glazers need at least £200m to upgrade Old Trafford, which is the Premier League’s biggest stadium but its facilities have fallen behind those at Manchester City, Tottenham Hotspur, Arsenal and Liverpool.
They also spent over £200m on new signings this summer, despite commercial revenues slowing down due to a lack of success — there’s been no trophy since winning the Europa League in 2017 — and the impact of the COVID-19 pandemic.
United announced a net loss of £115.5m for last season, so the walls were closing in on the Glazers. They simply can’t rebuild Old Trafford, sign the best players and reduce their debt on their own. And with interest rates climbing sharply across the world right now, borrowing has become a much more expensive option. So the need to either attract a wealthy investor to help with all of the above, or simply sell up, is clear.
The vocal and visible anti-Glazer campaign led by United’s supporters is also another factor why the club is being sold. While the Glazers have largely blanked out the protests throughout their time as owners, the fans’ groups believe their campaigns are making United a less attractive vehicle for potential sponsors — whose money the Glazers rely upon to drive the club’s revenue.
And another key element in the decision is the sale of Chelsea. All of a sudden, elite football clubs have a benchmark to measure their own value against and the Glazers know that United could be worth up to four times the eventual Chelsea sale price of £2.5bn.
Sources say the Glazers place a huge premium on the kudos that comes with owning this famous club, so the ideal scenario would be to attract an investor or partner who would solve their financial issues and leave them to continue to enjoy their ownership of the club. But those unicorns don’t exist.
Meanwhile, if somebody has the money to invest in United, they are going to want their say in how it is run and the Glazers can’t expect a bailout and the free rein to carry on regardless.
One key pointer towards the Glazers’ real motives is the enlisting of the American bank, Raine Group. Raine was hired by Roman Abramovich to find a buyer for Chelsea earlier this year and it dealt with over 200 incomings.
Several high-worth individuals and private equity funds made the final shortlist to buy Chelsea, but missed out to a consortium led by Los Angeles Dodgers co-owner Todd Boehly.
But from that process, Raine now has a list of hugely wealthy potential buyers for United on speed dial and the Glazers know this. They will have seen the interest in Chelsea and realised that they could sell United quickly and make a massive profit.
Although the final cost of their takeover in 2005 was £790m, the Glazers only invested £270m of their own money — the other £520m was leveraged against United’s financial might — so a multi-billion pound sale will see them walk away with a vast return on their initial outlay.
Since Sir Alex Ferguson retired as manager in 2013, the success on the pitch has dried up and the Glazers have displayed none of the smart, strategic decisions that have defined FSG’s ownership of Liverpool. In recent years, the Glazers have wasted colossal amounts of money on signings and wages in an effort to make United successful again and they have reached the point where they can no longer chase their losses.
The Glazers, meanwhile, have run out of options and any new owner of United would have to rebuild a crumbling empire.
Manchester United is one of the top three brands in world football, alongside Real Madrid and Barcelona. In terms of global fanbase, history and commercial power, those three teams stand apart from the rest.
Sources reveal that Liverpool are likely to attract a £4bn valuation, but United could go as high as £8bn. This is because of the ability of potential new owners to generate huge revenue streams on the back of United’s much greater global power.
Even though United have been a failing enterprise on the pitch for the last 10 years, they remain a Grade “A” sports brand and sponsors continue to want to pay fortunes to be associated with them. United are the biggest house on the most prestigious road in town and, when they come available, somebody will pay whatever it takes to buy them.
The self-styled world’s biggest football club, the opportunity to make massive money on the back of it, the prospect of the glory that comes with winning Premier Leagues and Champions Leagues — and a rebuilding job on and off the pitch that could cost half a billion pounds.
Meanwhile, it will cost at least £200m to upgrade the facilities and probably more if new owners have more ambitious plans than the Glazers, who simply need to do the repair jobs they have overlooked for so many years. A new training ground, or modernised one, will also set any new owners back to the tune of millions.
But there will also be a hefty bill when it comes to making manager Erik ten Hag’s squad deep enough and good enough to compete for the titles that United once won with unerring regularity.
So while owning United will bring undoubted prestige to any new owner, it won’t be without initial problems and the need to spend plenty more than the acquisition fee.
Who Could Buy Man United?
Russian oligarchs are out, due to the sanctions imposed by western governments as a result of Russia’s invasion of Ukraine, while the wave of Chinese investment into major European clubs has ground to a halt since the pandemic and limitations from its government.
Sovereign wealth funds, such as those behind Manchester City (Abu Dhabi), Paris Saint-Germain (Qatar) and Newcastle (Saudi Arabia) cannot own more than one club in the same competition (Premier League or Champions League), so that will impact on the list.
But as the sale process for Chelsea showed, there is no shortage of wealthy individuals and groups in the United States and that is the likeliest place from where the next United owners will emerge.
Britain’s richest man, Jim Ratcliffe, has already gone public with his interest in buying United, but said earlier this season that the Glazers had made it clear they didn’t want to sell.
With a personal fortune in excess of £5bn, the boyhood United fan, who failed in a bid to buy Chelsea earlier this year, is seen as the supporters’ choice due to his connections to the club. But Ratcliffe, who owns French team Nice, could be outbid by wealthier rivals.
Another major bidder for Chelsea was the Ricketts family, which owns the Chicago Cubs. It partnered with Ken Griffin, the majority shareholder in hedge fund group Citadel, whose personal wealth is reported to be in excess of £20bn.
Ares Managements, a Los Angeles-based investment company, has recently stated its ambition to add a European football club to its portfolio.
In 2021, 15 clubs in Europe’s big five leagues — England, Spain, Germany, France and Italy — were either taken over or invested in and two-thirds of those involved were American individuals or groups.
So while an incredibly wealthy individual or sovereign wealth fund could yet emerge as a buyer for United, potentially from India, Dubai or the oil-rich former Soviet republics of Kazakhstan and Azerbaijan, the smart money is on United’s American owners being bought out by another American group.