The process for the sale of Manchester United football club is set to take another significant step forward in the coming week, with the formal submission of bids from those interested in buying the club.
There have been expressions of interest from US investors, Asia and the Middle East, although the early frontrunner is the British businessman, Sir Jim Ratcliffe, a boyhood fan of the club.
The much disliked Glazer family, the current owners of the club, are unlikely to receive their desired price tag for United, but are still in line to make a considerable profit on their original investment.
The Glazers
The club are currently owned by the six children of the late Malcolm Glazer, who initially made his money in the US real estate market before branching out into banking, healthcare and media operations.
They first invested in the club in 2003, and became the majority shareholders two years later, paying a price of £790 million.
Although when Malcolm died in 2014 he left his 90% stake in the club to all his children equally, it is two of his sons, Avram and Joel, who have been most actively involved with United.
The Glazers, almost from the start, have been deeply unpopular with the United fan base, who have criticised them with the way that they used debt to fund the buying of the club, which sits on the United balance sheet, and which has to be serviced through interest payments.
At the same time, the family take millions out each year in terms of dividends, whilst there has been a perceived lack of investment in the team and the facilities at the club.
Some of these issues were highlighted in the explosive interview that the now departed Cristiano Ronaldo gave to the British TV journalist Piers Morgan last November.
Fan Protests
There have been widespread fan protests against the Glazer ownership, the most prominent of which led to the cancellation of a game against Liverpool in May 2021, when several hundred fans broke into Old Trafford before the match.
The Glazers, who rarely attend games, finally bowed to the pressure, when they announced at the end of last year, that they were ready to consider “all strategic alternatives.”
No doubt a motivating factor would have been the example set by the sale of Chelsea following the sanctioning of Roman Abramovich following the Russian invasion of Ukraine. That eventually went for £4.25 billion, and given that United has a richer history and tradition than Chelsea, and has much greater global brand recognition, the Glazers no doubt thought they could get much more than that.
Fundamentals may not justify inflated price tag
Although the Glazers are hoping to raise between £6 billion to £8 billion from the sale, they may need to temper their expectations, because the business fundamentals do not support such a valuation.
Whoever takes over is facing having to foot the bill for a substantial capital investment renovating Old Trafford, which is one of the oldest grounds in the Premier League and showing its age.
But, whilst they may not get all that they had hoped, they are still likely to earn a major profit given the size of their original stake.
And they will also rid themselves of the unpopularity which has attached to them as owners of the Premier League club.
The sale process
The sale has been handled by US investment bank, the Raine Group, who also handled the Chelsea sale, and has followed much the same process.
Interested parties have had to give certain undertakings before they have been made privy to proprietary financial information, and now they are required to submit formal bids.
Raine will then evaluate the bids and conduct due diligence on the parties and the individuals behind then, before deciding on a preferred bidder.
If all goes according to plan, then their identities should be known before the end of the season.
United fans’ hopes
United fans will be hoping whoever takes over will be prepared to lavish similar largesse on transfer spending as Todd Boehly has sanctioned at Chelsea.
Already over £0.5 billion has been spent on transfers since the takeover, £300 million plus of that in January alone.
However, enthusiasm should be tempered with a little realism. People are only interested in buying the club because they are looking to buy an investment, and at some stage they will want a return on that investment. The piper will need to be paid at some stage.
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