Manchester United and Tottenham Hotspur targeted by bidders

So finally we have a bit of clarity. Last night the first bidders emerged in the battle for Manchester United; one from Qatar, one from closer to home.

Sheikh Jassim Bin Hamad Al Thani, the son of Qatar’s former prime minister, has made an offer to buy the club and clear its debts. Ineos founder Sir Jim Ratcliffe is seeking to rival that with a bid leaning heavily on its Britishness. But this isn’t a repeat of the Chelsea auction, the sellers here are the Glazers and money is going to be what matters. The Qataris surely start as favourites here.

Meanwhile the FT brought another football exclusive to you this week, about an incoming $3.75bn bid for Tottenham Hotspur, led by Iranian-American Jahm Najafi. We have more on that below.

Plus we’ve got update on the latest crisis in English rugby union. Do read on — Samuel Agini, sports business reporter

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Tottenham join the illustrious list of clubs drawing takeover interest

A couple years before Jahm Najafi began preparing his surprise $3.75bn takeover bid for Tottenham Hotspur, the Iranian-American billionaire was ruffling feathers in another professional sport.

It was November 2021, and ESPN had just published an explosive report detailing years of alleged abuses and a toxic workplace in the front office of basketball’s Phoenix Suns, specifically under the direction of majority owner Robert Sarver.

The National Basketball Association found itself in the midst of an ownership scandal — specifically one alleging that a team governor had uttered racist epithets and denigrated female employees — and launched its own investigation. That month, Suns minority owner and vice-chair Najafi made a bold public statement: arriving courtside at a Suns game with Colin Kaepernick, the former American football quarterback synonymous with taking a knee against racism.

For Najafi, a private equity titan whose eponymous firm has invested in consumer goods like Sure deodorant and other sports entities like the X Games, the outing with Kaepernick was both a sotto voce rebuke of Sarver’s leadership, as well as a marketing opportunity: the two had teamed up to launch a social-justice oriented special purpose acquisition company, or Spac, which had listed on the New York Stock Exchange earlier that year.

The episode reflects Najafi’s willingness to take risks, but also his mixed record on dealmaking. By December 2022, the Spac heyday had long since evaporated, and Mission Advancement Corp delisted without finding an acquisition target.

Najafi was born in Iran and emigrated to the US at age 12, learning English through watching NBA games as a teen. After working on Wall Street, he made his name in private equity following the dotcom bust of the early 2000s, buying out smaller firms and pocketing outsize returns.

A 2011 bid to buy the bookstore chain Borders out of bankruptcy fell apart after the company’s creditors preferred to sell assets to liquidators. More recently, Najafi has focused on sports and entertainment, including acquiring a minority stake in McClaren’s F1 racing team.

Through his position as a minority owner in the Suns, he is a governor on the board of the NBA and publicly called for the resignation of Sarver after the league administered a much-criticised one-year suspension and $10mn fine for his conduct. In December, Sarver agreed to sell the Suns — and WNBA sister franchise the Mercury — to mortgage lending billionaire Mat Ishbia for an NBA record $4bn.

Najafi is expected to formally approach Tottenham’s current owner Joe Lewis, 86, in a matter of weeks, sources told the FT. The Bahamas-based billionaire has been a constant at Spurs for over two decades.

The interest in Spurs comes despite growing evidence that keeping up with serial Premier League champions Manchester City gets tougher every season. “Manchester City have helped to break English football, even if they haven’t broken the rules,” argues FT data master John Burn-Murdoch, who warns that City’s success is starting to threaten the credibility of the Premier League.

But Najafi’s potential offer — 30 per cent of which is backed by Gulf investors mostly in Abu Dhabi — values the North London Premier League side’s equity at $3bn, with $750mn in existing debt. Tottenham have built a record of qualifying for the lucrative Champions League and completed construction on a new stadium, but haven’t won a major title since 2008.

So in a heady market for Premier League investment, is it time to cash in?

Funds needed as Premiership Rugby’s crisis darkens

While England’s biggest football clubs entertain record-breaking takeover interest, the same cannot be said for their counterparts in rugby union.

As a reminder, Covid unleashed untold financial stress on English rugby union clubs, which have endured many ups and downs since the sport turned professional in 1995. While Premier League football clubs have cashed in on swelling media rights, rugby hasn’t attracted anywhere near the same sort of TV money.

The issues include the recent travails of Worcester Warriors and Wasps — the two clubs that fell into administration last year and were ejected from the Premiership. And there are more structural problems, such as clubs playing second fiddle to international teams.

Clubs are still fighting for survival. Just weeks after a parliamentary report in the UK warned that the finances of Premiership Rugby clubs are “clearly unsustainable”, champions Leicester Tigers set out plans to raise up to £13mn from non-executive director Tom Scott and longstanding chair Peter Tom.

The directors believe that without shareholder approval for the fundraising, “they may have no choice but to appoint administrators”, which could result in the club being expelled from all competitions, according the fundraising document sent to Leicester Tigers shareholders.

Title winners aren’t meant to be on the brink of financial ruin.

Despite winning the Premiership in 2021/22, increasing annual revenues by 75 per cent to £22mn, and shrinking operating losses to £1.9mn from £5.9mn, Leicester are feeling the effects of the wider crisis in rugby.

Without Worcester and Wasps in the Premiership, Leicester have two fewer home fixtures this season, a drag on revenues.

On top of that, former coach Steve Borthwick and assistant Kevin Sinfield quit to lead the English national team. Leicester expect to spend much of the financial settlement received from governing body Rugby Football Union for releasing the duo on hiring replacements.

As a result, the club said it “is facing a deteriorating financial position which is expected to lead to a cash squeeze” later in the first quarter of this year, forcing it to “urgently” seek further funding.

As Premiership clubs plan a more sustainable future, the perils of top flight rugby reinforce the need to find a commercial model that can grow the game and attract investment. Here’s how it might look.

Highlights

• The head of China’s football association is under investigation by the ruling Communist party’s feared anti-corruption agency, in the latest setback for President Xi Jinping’s ambitions of turning the nation into a soccer powerhouse.

• Liverpool Football Club urged Uefa to ensure the chaotic scenes at last year’s Champions League final never happen again after an independent report found that it was “remarkable” that nobody died.

• Sunday’s Super Bowl, in which the Kansas City Chiefs defeated the Philadelphia Eagles for their second National Football League championship trophy in four years, notched over 112mn viewers for Fox, the third-highest rated Super Bowl on record. Viewership of Rihanna’s performance (and pregnancy reveal) bettered those of the game itself, with 118mn people tuning in for the second-highest rated halftime show ever.

• Judges in the US Court of Appeals system heard oral arguments this week on what could be a landmark case to determine if university athletes can be designated as employees. The case, Johnson vs NCAA, could further disrupt the multibillion-dollar US college sports industry just a couple years after the NCAA moved to allow athletes to receive sponsorships. A ruling is expected in weeks or months.

Transfer Market

• Karen Carney, the pundit and ex-England football player, has recruited former international footballer Hope Powell and ex-Arsenal men’s striker Ian Wright to help with the government-backed review into the women’s game she is leading. Jane Purdon, director of the Women in Football group, former World Rugby chief Brett Gosper, secretary-general of the International Working Group on Women and Sport Lisa O’Keefe, and ex-Deloitte partner Dan Jones are also on the panel.

At the buzzer

For the week of Valentine’s Day, it’s no surprise that pro sports organisations were doing their utmost to celebrate love. Some NBA teams offer cheeky templates of Valentine cards, but the Dallas Mavericks took demonstrations of commitment to the limit: performing an actual wedding between two fans at halftime on Tuesday. If you thought Jumbotron proposals were the ultimate expression of romantic (and team) devotion, just check out the ceremony at the American Airlines Center, complete with sound effects.