Manchester United: owners sense a seller’s market approaching

No one doubts the enmity of Manchester United fans towards US owners the Glazer family. But after almost two decades in control, this opprobrium is unlikely to have encouraged the owners to seek “strategic alternatives for the club”. What did so was this May’s sale of Premiership rivals Chelsea for £2.5bn ($3.1bn). That set a valuation marker. Liverpool owners Fenway Sports Group have hoisted a sale sign this month, too.

Like buses, football’s trophy assets may never become available or, instead, arrive all at once. That would explain the persistent interest from Ineos billionaire Jim Ratcliffe first for Chelsea and more recently the Red Devils. MUFC last changed hands in 2005 for £790mn. Liverpool went for £300mn in 2010.

Sales can happen from desperation, or greed. In Italy, an indigent AC Milan found itself in the hands of hard-nosed US investor Elliott Management four years ago. This year, it sold Milan off to US private equity group Red Bird for €1.2bn ($1.24bn), tripling its money. The Glazers have not done badly. Net, more money has gone to MUFC’s owners — £154mn (mostly dividends) — than at any other Premiership club over the past decade, according to work by pseudonymous analyst Swiss Ramble.

True, in recent seasons the club’s form has slipped. Lower league rankings, and fewer games in all competitions, mean less broadcast revenues — down 15 per cent last year. Together with sponsorships, these make up 80 per cent of the club’s top line.

More pressing is upgrading an ageing Old Trafford stadium. That could cost $1.5bn, thinks Rob Wilson at Sheffield Hallam University. That would come on top of a mooted valuation of at least $6bn for MUFC, about 9 times revenues, more if multiple bidders appear. Chelsea went cheaply at about half that.

Buyers of MUFC do get a reasonably clean proposition. It has avoided relegation from the top league for many years, protecting its revenue streams. Unlike Chelsea, MUFC fully owns its stadium and the plentiful acreage around it. Financial accounts are clear given the club’s US-listed entity, which has non-voting shares. Those have jumped 32 per cent this week.

MUFC talks up its 1.1bn fans and social media followers. It could perhaps lever much more cash from this group than it does. Fans hate the debt employed by the current owners. Given the valuations suggested, new investors or owners would surely need even more leverage to earn big returns.