Two of the biggest clubs in the world are on the market – and the sales race has begun.
Manchester United and Liverpool – a historic Premier League rivalry and the royalty of English football – are simultaneously willing to listen to offers from potential buyers.
Reds owners Fenway Sports Group said earlier this month they were ‘open to investment’ although they remained ‘fully committed’ to the club with banks Goldmann Sachs and Morgan Stanley in charge of to gauge interest around a sale.
Now, weeks on, the Glazer family are ready to sell as United plan to identify “strategic alternatives” and said the process would consider a number of options “including new investment in the club, a sale or other transactions involving the business”.
So what will happen next? Sky Sports News Senior journalist Melissa Reddy and football finance expert Kieran Maguire analyze the key points around club sales.
Why are both Liverpool and Man United in the market?
Sky Sports News senior reporter Melissa Reddy: “It is largely triggered by the takeover of Chelsea for £4.25bn.
“Sky Sports News was informed that Glazers and Fenway Sports Group have been told for months that this is a “peak period” for the rating of top clubs, as indicated by the fact that the team at the West London ordered such a staggering figure despite a forced sale due to Roman Abramovich sanctions.
“It cost £2.5bn to acquire the Oligarch’s shares and a firm commitment of £1.75bn of future investment in the club’s stadium, academy and women’s team, to reach the figure of £4.25 billion.
“A US-based source, who spoke to the Glazers and FSG over financial matters, said the sale of Chelsea ‘changed the dial’ for both owners. They had been very reluctant to consider a sale before” to see the extent of the legitimate interest. the.”
Statement from Manchester United
Manchester United plc (NYSE: MANU), one of the world’s most successful and historic sports clubs, today announces that the company’s Board of Directors (the “Board”) is beginning a process of exploring strategic alternatives for the club.
The process is designed to enhance the future growth of the club, with the ultimate aim of positioning the club to take advantage of opportunities both on the pitch and commercially.
As part of this process, the board will consider all strategic alternatives, including new investment in the club, sale or other transactions involving the company. This will include an assessment of several initiatives to strengthen the club, including stadium and infrastructure redevelopment, and the expansion of the club’s commercial operations globally, each in the context of enhancing long-term success. term of the club’s men’s, women’s and academy teams. teams and bring benefits to fans and other stakeholders.
Football finance expert Kieran Maguire: “The Glazers have seen what happened at Chelsea. They have spoken to friends at Fenway Sports Group in Liverpool, and they will know that the amount of interest that has been placed, in terms of selling Liverpool, is concerned.
“Given the price at which Liverpool are likely to be sold, they will feel they can get a premium on top of that, and now would be the perfect time to sell – given that Manchester United now need a huge outlay, in terms of infrastructure and also, no doubt, the recruitment of players.”
What are the other factors?
Melissa Reddy:Beyond financial circles who think it’s prime time to be in the market, the rising costs of having to compete with state-powered clubs on and off the pitch have also been significant. .
“United and Liverpool were the driving forces behind the failure of the European Super League, which would have seen spending on transfer fees and wages capped at a certain percentage of revenue to ‘level the playing field’ with resourceful clubs The ESL was also a guarantee of inflated revenue, whereas in its absence, a sale is seen as the best way to maximize return on investment.
“United have the added concern of interest rate risk to consider, as well as fan protests and overwhelming dissatisfaction with their ownership.
“Clubs are also taking into account the gloomy global economic forecasts for the next few years.”
Kieran Maguire: “I don’t think Ronaldo’s departure will affect things as much as people claim. If you look at Manchester United’s most recent accounts, the value of merchandise sales has actually fallen in 2021/2022, compared to the previous season – although Ronaldo was there.
“So I expect the anticipated bump hasn’t materialized, and so it’s probably in all parties’ best interests that he move on.”
How much could they be sold for?
Kieran Maguire: “We have to be careful with the Chelsea award because the government have only been given £2.5billion, the other element of the award is a commitment to spend the money over the next 10 years.
“But if you compare the relative size of profitability and revenue generated at Manchester United to Chelsea, I think a figure between £4 billion and £4.5 billion is appropriate, and if there’s a lot of interest , this will drive up the price.
“Manchester United are a unique asset, they’re a global brand, so £5 billion isn’t impossible, but it would be very high end.”
Melissa Reddy: “As England’s two main sporting institutions, United and Liverpool believe they will have more suitors and a higher starting price than the Stamford Bridge side. The two clubs have discussed courting new investment over the course of summer, each putting together a presentation to entice eager parties in full sale.”
Who could buy them?
Melissa Reddy: “United’s financial advisers are the Raine Group – they were overseeing potential bidders for Chelsea. They have a lot of interest in the file of very wealthy people who want to invest in a football club.
“For Liverpool, they are being advised by Goldman Sachs, who helped Clearlake Capital who are part of the consortium that bought Chelsea. Both teams bringing in people so heavily involved in this process, that tells us a lot.
“The most important thing is to make sure, if they are on the market, that they end up in the right hands.”
Kieran Maguire: “We saw over 200 parties interested in Chelsea, and it was a struggling business at the time.
“Chelsea are a big club, Manchester United are a bigger club – there’s no doubt about that. So I think we’ll see interest from the United States first, a lot of private equity firms believe that football – and the Premier League, in particular – are undervalued.
“Secondly, if we have a successful World Cup in the Middle East, when we already have an interest in football from Abu Dhabi, Qatar and Saudi Arabia, there are other parts of the Middle East to potential investors who might decide, on the back of Qatar and the success of other Middle Eastern owners, that they might also be interested in acquiring Manchester United.”
Could Sir Jim Ratcliffe be interested?
Kieran Maguire: “Sir Jim is the richest man in the country. He’s from Manchester, he used to go to Old Trafford as a kid. In terms of creating a legacy in his home town, that would be a very romantic rapprochement of minds.
“Sir Jim is a very successful person because he knows the value of a business. He has already invested in French football and other sports as well. He won’t pay too much, but at the same time he would be interested in what the current one the owners are looking for, price-wise, and, if it’s appropriate, there’s no reason why he shouldn’t throw his hat in the ring.”