Over the past few days, the future of Manchester United has once again been cast into doubt with new talks of a takeover.
Despite Ineos taking the helm of footballing operations at Manchester United and investing in fixing the struggling giant, it could end up being in vain.
This is because the Glazers have the option to sell the entirety of United, which Sir Jim Ratcliffe cannot do anything to prevent due to a clause he agreed to during the part-takeover in 2024.
Now, the past few days have seen United linked with a UAE consortium ‘takeover’ bid, something which could be incredibly lucrative. The story was broken by the Saudi chairman of the General Entertainment Authority, Turki Al-Sheikh, claiming that a takeover was on the cards.
Manchester United and UAE consortium takeover talk doesn’t quite make sense
While many would want to see big-money owners arrive at Old Trafford and spend freely, the idea that it will happen with this UAE-based consortium being widely discussed seems ill-judged.
Explaining why, Football Finance expert Adam Williams has exclusively explained to United in Focus that the fact that discussions have been leaked is one reason it won’t happen.
“Valuing a football club isn’t a scientific process. There are some formulas which academics and consultancies have dreamt up, but value is ultimately in the eye of the beholder.
“Benchmarking against comparable sales is your best bet, and in United’s case the sale to Ratcliffe valued the club at around £4bn. In the last negotiations, the Glazers valued the club at closer to £5bn, but the market manifestly didn’t think that was justifiable.
“Given that the club is a money pit that needs £1-2bn of investment in the stadium and perhaps not something too dissimilar to sort the sporting side out, it’s hard to make the case for £5bn-plus.
“However, there are lots of experts who will evangelise about the power of the Man United brand and the global scale that can bring – but there are a lot of things that need to fall into place before an owner is able to effectively monetise that.
“If you’re investing £5bn and another £1-2bn on top of that, when and how are you going to make a return on that investment?
“The unknowns with this story about the UAE consortium make it a bit of a non-starter for me. The language – i.e., ‘takeover’ – makes it sound like a bid for outright control of the club, but I think it’s much more likely we see a minority investment that helps fund the new stadium.
“Ultimately, clubs receive expressions of interest all the time. To me, this instinctively sounds like some very embryonic discussions have leaked. And when that happens at such an early stage, it’s not a good sign that anything will ever come of them. On the sell side, you generally want a quiet process until the point that it gets impossible to contain.”
Manchester United’s market value, with the Glazer debt, makes purchase difficult
The Glazer family have been open to selling for years; however, the sticking point has been their valuation, which has at times been ludicrous.
United have only been valued at £3.2bn in the latest valuations. This is vastly below the £6bn the Glazers wanted in 2023 and less than the £5bn they value the club at today.
The valuation cut is due to United’s struggles on the pitch, with the brand not able to sustain the club’s economic viability long term.
So the Glazer family would be asking the consortium to pay almost £2bn over market price, and then the buyers would also be taking on the debt.
On paper, it is a terrible decision; however, the potential for the club to become a money superpower is there. UAE investment in the stadium could be a route toward this consortium buying some of the Glazers’ shares.
But we won’t know until it happens.
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