Two of the biggest clubs in the world are on the market – and the race to be sold has begun.
Manchester United and Liverpool – an historic Premier League rivalry and English football royalty – are concurrently willing to listen to offers from potential buyers.
Reds owners Fenway Sports Group said earlier this month they are “open to investment” although remain “fully committed” to the club with banks Goldmann Sachs and Morgan Stanley instructed to gauge interest around a sale.
Now, just weeks later, the Glazer family are open to selling up as United 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”.
So what will happen next? Sky Sports News senior reporter Melissa Reddy and football finance expert Kieran Maguire analyse the key points around the sales of the clubs.
Why are both Liverpool and Man United on the market?
Sky Sports News senior reporter Melissa Reddy: “It is in large part sparked by the £4.25bn takeover of Chelsea.
“Sky Sports News has been told the Glazers and Fenway Sports Group have been advised for months it is a “peak period” for the valuation of top clubs, as told by the fact the west London side commanded such a staggering figure despite a forced sale due to the sanctions on Roman Abramovich.
“It cost £2.5bn to acquire the oligarch’s shares and a binding pledge of £1.75bn of future investment in the club’s stadium, academy, and women’s team, to reach the figure of £4.25bn.
“One US-based source, who has engaged with the Glazers and FSG over financial matters, said the Chelsea sale “moved the dial” for both owners. They had been heavily reluctant to consider a sale before “seeing the scope of legitimate interest out there.”
Man Utd statement
Manchester United plc (NYSE:MANU), one of the most successful and historic sports clubs in the world, announces today that the Company’s Board of Directors (the “Board”) is commencing a process to explore strategic alternatives for the club.
The process is designed to enhance the club’s future growth, with the ultimate goal of positioning the club to capitalize on opportunities both on the pitch and commercially.
As part of this process, the Board will consider all strategic alternatives, including new investment into the club, a 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 expansion of the club’s commercial operations on a global scale, each in the context of enhancing the long-term success of the club’s men’s, women’s and academy teams, and bringing benefits to fans and other stakeholders.
Football finance expert Kieran Maguire: “The Glazers have seen what’s happened at Chelsea. They have spoken to friends at Fenway Sports Group at Liverpool, and they will know the amount of interest which has been placed, in terms of the Liverpool sale, is concerned.
“Given the price Liverpool is probably being sold for, they will 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.”
What other factors are there?
Melissa Reddy: “Beyond financial circles believing this is prime time to be on the market, the increasing costs of having to compete with state-powered clubs on and off the pitch has also been significant.
“United and Liverpool were driving forces behind the failed 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 clubs boasting unlimited resources. The ESL was also a guarantee of ballooning income, while in its absence, a sale is viewed as the best way to maximise the return on investment.
“United have the added concern of interest rate risk to consider, as well as fan protests and overwhelming unhappiness at their ownership.
“The clubs are also factoring in the bleak global economic forecasts for the next few years.”
Kieran Maguire: “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 actually dropped in 2021/2022, compared to the previous season – despite Ronaldo being there.
“So, I expect the anticipated bump didn’t materialise, and therefore it’s probably best in interest of all parties that he does move on.”
How much could they be sold for?
Kieran Maguire: “We must be careful about the Chelsea price 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.
“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.”
Melissa Reddy: “As England’s two premier sporting institutions, United and Liverpool believe they will command more suitors and a higher starting price point than the Stamford Bridge side. Both clubs discussed courting new investment over the summer, with each pulling together a presentation deck to entice parties keen on a full sale.”
Who could buy them?
Melissa Reddy: “United’s financial advisors are the Raine Group – they were overseeing the potential bidders for Chelsea. They have a lot of interest on file of very rich people who want to invest in a football club.
“For Liverpool, they are being advised by Goldman Sachs, who helped Clearlake Capital that are part of the consortium which bought into Chelsea. With both teams bringing in people who were so heavily involved in that process it tells us a lot.
“The big thing is making 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 that was a distressed company at the time.
“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.
“Secondly, if we have a successful World Cup in the Middle East, while 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.”
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 when he was a kid. In terms of creating a legacy back in his hometown, this would be a very romantic coming together of minds.
“Sir Jim is a very successful person because he knows the value of a business. He’s already invested in French football and other sports as well. He won’t overpay, but, at the same time, he would be interested in what the current owners are looking for, in terms of price, and, if that’s appropriate, there’s no reason why he wouldn’t throw his hat into the ring.”