Manchester United are effectively up for sale; Man Utd share price up 17 per cent straight after the news, adding almost £336.4m ($400m) to the club's market capitalisation, according to finance expert Kieran Maguire
Wednesday 23 November 2022 09:27, UK
The Glazer family are open to selling Manchester United.
The American owners of Man Utd are willing to listen to offers for the club after a 17-year reign dominated by fan protests and declining on-pitch performance.
If the club - valued at around £5bn - is sold, it is expected to be purchased by US investors.
A Manchester United statement confirmed plans to identify "strategic alternatives" and said the process will consider a number of options "including new investment into the club, a sale, or other transactions involving the company".
Sky News had earlier exclusively revealed the Glazer family were preparing to announce their intention to examine potential sources of outside investment that could include a full-blown auction of arguably the world's most famous football club.
Manchester United's share price immediately rose by 17 per cent as a result, adding almost $400m (£336.4m) to the club's market capitalisation, according to football finance expert Kieran Maguire.
Executive co-chairmen and directors Avram Glazer and Joel Glazer said: "The strength of Manchester United rests on the passion and loyalty of our global community of 1.1 billion fans and followers. As we seek to continue building on the club's history of success, the Board has authorised a thorough evaluation of strategic alternatives.
"We will evaluate all options to ensure that we best serve our fans and that Manchester United maximises the significant growth opportunities available to the club today and in the future. Throughout this process we will remain fully focused on serving the best interests of our fans, shareholders, and various stakeholders."
The Raine Group, which facilitated the sale of Chelsea over the summer, is acting as United's exclusive financial adviser, with Rothschild and Co performing the same role to the Glazer family shareholders.
The announcement of a review of financial options that could include a sale process would signal an end to years of speculation over whether the Glazers might be persuaded to offload a club which for the past decade have experienced an almost-unmitigated footballing decline.
United have not won the Premier League title since 2013, and have sacked a succession of managers in the aftermath of the retirement of Sir Alex Ferguson.
More recently, the club have become embroiled in a legal fight with Cristiano Ronaldo over an interview in which he questioned United's ambition and lambasted the Glazers' approach to owning it.
On Tuesday, United announced that Ronaldo had left "with immediate effect".
It remains possible the Glazer family, which took control of United in 2005 in a £790m deal largely funded by debt, opt not to sell.
A partial sale to new investors, with capital being raised to fund an overdue redevelopment of Old Trafford, is one potential outcome from the process.
The Glazers have acknowledged the need for new infrastructure investment to transform the stadium into a genuinely world-class venue, while substantial funds are also required to enable the men's team to compete once more at the top of the European game.
United's valuation in a sale would inevitably exceed the roughly $2.15bn market capitalisation implied by their share price during Tuesday's trading session on the New York Stock Exchange.
Reports in recent months have speculated any transaction would need to value the club at anywhere between £5bn and £9bn to persuade the owners to sell.
The Glazers listed a minority stake in the company in 2012 but retained overwhelming control through a dual-class share structure which means they hold almost all voting rights.
For more than 18 months, the club have been promising to introduce a modestly sized supporter ownership scheme that would give fans shares with the same structure of voting rights as the Glazers.
The initiative has, however, yet to be launched despite a pledge to have it operational by the start of the 2021-22 season.
It was one of a number of commitments made by Joel Glazer, United's co-chairman, in the wake of the European Super League (ESL) debacle, in which the club played a pivotal role.
Manchester United were one of six Premier League teams to agree to join the project, which collapsed within hours of its official launch amid public and political acrimony.
In May 2021, United fans forced the postponement of a home match against rivals Liverpool after protesting against the ESL and the Glazer family.
'Love United, hate Glazer' has become a familiar refrain during their tenure, with supporters critical of a perceived lack of investment in the club's infrastructure while the owners have extracted hundreds of millions of pounds-worth of dividends as a result of their continued commercial success.
If a formal sale process is initiated, attention will turn to the identities of potential buyers.
Sir Jim Ratcliffe, the Ineos billionaire who has supported United since childhood, said in August he was keen to buy the club but has since suggested English football's elite names are overvalued.
Billionaires from around the world will be linked to bids, as will sovereign investors seeking to emulate the kinds of takeovers seen at Newcastle United - now owned by Saudi state-backed investors - and Paris Saint-Germain, who are Qatari-owned.
There will also be speculation the Red Knights, a consortium led by former United director and leading economist Lord O'Neill, could revive an attempt initiated in 2010 to take control of the club.
Significantly, the prospective auction of Manchester United comes as Fenway Sports Group, the owner of Liverpool, also weigh up selling all or part of the club.
Simultaneous sale processes for two of English football's so-called 'big six' - the others being Arsenal, Chelsea, Manchester City and Tottenham Hotspur - would be unprecedented.
One analyst said the timing suggested some investors believed the value of top clubs could be approaching its peak, especially against a backdrop of tough global economic forecasts for the coming years.
United's announcement has also been made during a World Cup fuelled by Gulf petrodollars, underlining the shifting financing of the global football industry.
Sky Sports News senior reporter Melissa Reddy:
"Man Utd are exploring new investment, including an outright sale.
"Now that means the Glazer ownership, 17 years of their stewardship, which has been marked by declining on-pitch performances, could be coming to its end.
"Now what is quite instructive is the Raine Group. They are the exclusive financial advisors for this potential sale. They were also tasked with canvassing interest in Chelsea and I'm told that the fact Chelsea fetched £4.25bn in what was a forced sale. Remember the circumstances when Roman Abramovich was sanctioned and the club needed to be sold, yet Chelsea were still able to get that valuation.
"United feel they are a superior asset and would command a lot more money than Chelsea did.
"So, there is a feeling that the Raine Group have lots of investors on file, willing to buy an elite club and that the value of sports teams are currently entering its peak, especially football clubs, amid a depressed financial market globally that is only going to get worse in a few years.
"United also have a few things to consider like interest rate risk and there is also the ballooning costs of having to compete both on and off the pitch with state-owned clubs.
"Now, this is not only a story around Manchester United. What makes this so huge is the fact that Liverpool are also, at the same time, considering new investment and the potential of an outright sale.
"So, you have two of the biggest English institutions, football royalty, up for grabs, and the big thing is making sure, if they are on the market, that they end up in the right hands."
Sky Sports News reporter Ben Ransom:
"It is a huge development when you consider the fact that the Glazers, in their time since they took over in 2005, have always said when asked that they are completely committed to this Manchester United ownership model, and are committed to the future.
"When you consider that just up the M62 it is a similar situation at Liverpool - two American ownership models potentially looking to move the clubs on - it's a pretty remarkable moment.
"And it's a real insight, I guess, into how they perceive the future and potential future difficulties of challenging at the top of the Premier League".
Finance expert Kieran Maguire:
"I think, given the price Liverpool is probably being sold for, they'll feel they can get a premium on top of that, and it would now be an ideal time to sell - given Manchester United now needs a huge spend, in terms of infrastructure and also, arguably, player recruitment.
"We must be careful about the Chelsea price (£4.25bn) because the government only received £2.5bn. The other element of the price is a commitment to spend money over the course of the next 10 years.
"But, if you compare the relative size of the profitability and revenue generated at Manchester United to Chelsea, I think a figure between £4bn and £4.5bn is appropriate, and if there's a lot of interest that will drive up the price.
"We saw over 200 parties interested in Chelsea, and that was a distressed company at the time. Manchester United have appointed the Raine Group who were used by Roman Abramovich to oversee the interest and sale of Chelsea.
"Chelsea are a big club, Manchester United are a bigger club - there's no doubt about that. So, I think we will see interest from the USA first, lots of private equity companies feel that football - and the Premier League, in particular - are undervalued.
"Manchester United is a unique asset, it's a global brand, so £5bn is not impossible, but that would be very much at the top end.
"Secondly, if we have a successful World Cup in the Middle East, whilst we already have interest in football from Abu Dhabi, Qatar and Saudi Arabia, there are other Middle Eastern areas for potential investors, who might decide, on the back of Qatar and success of other Middle East owners, that they might be interested in acquiring Manchester United as well.
"I don't think Ronaldo's departure will affect things as much as people are claiming. If you look at the most recent Manchester United accounts, the value of merchandise sales dropped in 2021/2022, compared to the previous season - despite Ronaldo being there."
