After almost two-and-a-half years at Old Trafford, research suggests that Sir Jim Ratcliffe would make a profit if he were to sell his stake in Manchester United tomorrow.
Ratcliffe owns a little under 30 per cent, making him the club’s single largest shareholder, with significantly more equity than any of the six Glazer siblings or any retail or institutional investors who bought shares through the New York Stock Exchange.
To date, Ratcliffe has spent about £1.25bn in his bid to get Manchester United back on their perch, split between money paid to the Glazer family, public shareholders and just £240m of capital injections to support the club on a day-to-day basis.
On the pitch, it has been a bumpy ride, albeit one which has clunked into a smoother gear under the interim head coach Michael Carrick. His side need just two points to mathematically secure Champions League football with four games remaining.
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That would be a blessed relief for Ratcliffe and the rest of the Ineos top brass, who were forced to recalibrate the club’s finances this season to cope with no European football and fewer matchdays at Old Trafford, extending credit lines, cutting operating costs and betting on future success by funding new signings through bloated instalment plans.
The Champions League, where United will expect at least £150m in prize money and matchday income as a baseline, soothes some financial anxieties, but it is not a miracle cure.
Ratcliffe knows that sustained success is the only way to shore up the club’s bottom line and, by extension, the return on investment he might one day bag.
And on that front, there is good news for the 73-year-old petrochemicals billionaire turned football club owner.
Sir Jim Ratcliffe’s Man United stake now worth more than £1.25bn
In their annual ranking of the world’s most valuable football clubs, the respected industry title Sportico has valued United at $6.47bn, or about £4.8bn at today’s exchange rate.
Only Real Madrid ($7.7bn) and Barcelona ($6.65bn) were valued higher, while United were priced around £500-700m higher than closest Premier League challengers Liverpool, Manchester City and Arsenal.
That would imply that the 27.7 per cent stake Ratcliffe committed to buy in February 2024 for £1.25bn has appreciated in value by almost £100m.
Speaking exclusively to United in Focus, football finance academic and Price of Football podcast host Kieran Maguire gives his verdict on whether the club could justify that price.
“If Ratcliffe left today,” Maguire said, “he would just about get his money back, but that’s more to do with the United brand than it is to do with the decisions made by Ineos.
“If you look at the market capitalisation of United, it’s about $3bn. When you add on football net debt, that probably takes you to $4bn.
“There would likely be a control premium if a new buyer was to buy out Ratcliffe and the Glazers, you might get to $6bn, but I think that’s on the generous side because anybody who comes in is inheriting an iceberg on the horizon in terms of the new stadium and how it is going to be funded.”
The stadium is likely to cost in the region of £2bn in its wildly ambitious 100,000-seat current form, which will almost certainly require the club or the owners to double or even triple the club’s existing debt.
The question thereafter would be whether Old Trafford 2.0 could generate the revenue to sufficiently offset the interest payments, without bedrock fans being priced out.
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But even factoring in that risk, United would still be immensely attractive to a number of investors, should the opportunity to acquire more of the Glazers’ and Ratcliffe’s powerful Class B shares ever arise, says Maguire.
“United are, however, one of the biggest trophy assets in the world. There are, therefore, a considerable number of individuals who are not just asset-rich but cash-rich enough as well that they could afford that deal. So in terms of buyers pool, it’s restricted, but there will still be bidders out there.
“You only need two bidders to ramp up the price.”
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