Two of the biggest clubs in the world are on the market – and the race to be sold has begun.
Manchester United and Liverpool – a historic Premier League rivalry and English football royalty – are also willing to listen to offers from potential buyers.
Reds owners Fenway Sports Group said earlier this month they are “open to investment” although they remain “fully committed” to the club with banks Goldmann Sachs and Morgan Stanley instructed to gauge interest in a sale.
Now, just weeks later, the Glazer family are open to selling up as United plan to identify “strategic options” and said the process will consider a range of options “including new investment in 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 analyze the key points surrounding the sale of the clubs.
Why are both Liverpool and Man United on the market?
Sky Sports News senior reporter Melissa Reddy: “You can look at Chelsea’s sale earlier this year. Roman Abramovich was sanctioned and he had no choice but to sell the club.
“Despite being a forced sale, Chelsea still achieved a fee of £4.25 billion which stunned many. Manchester United and Liverpool will feel they are superior assets, they have a bigger global audience, bigger commercial deals and so will they feel they can get more than that.
“United also have things to consider like interest rate risk, and there are the big costs of competing on and off the pitch with state-owned clubs.”
Man Utd statement
Manchester United plc (NYSE:MANU), one of the most successful and historic sports clubs in the world, today announces that the Company’s Board of Directors (the “Board”) is commencing a process to explore strategic options for the Club.
The process is designed to strengthen the club’s future growth, with the ultimate goal of positioning the club to exploit opportunities both on the pitch and commercially.
As part of this process, the board will consider all strategic options, including new investment in the club, a sale or other transactions involving the company. This will include an assessment of several initiatives to strengthen the club, including the redevelopment of the stadium and infrastructure, and the 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, women and academy. teams, and provide benefits to fans and other stakeholders.
Football pundit Kieran Maguire: “The Glazers have seen what has happened at Chelsea. They have spoken to friends from the Fenway Sports Group in Liverpool and they want to know how much interest has been placed, as far as the Liverpool sale is concerned.
“Given the price Liverpool are likely to sell for, they will feel they can get a premium on top of that and now would be an ideal time to sell – given Manchester United now need a big spend, in terms of infrastructure and also, without doubt player recruitment.”
How much can they be sold for?
Kieran Maguire: “We have to be careful with the Chelsea award because the government only received £2.5 billion, the other element of the award is a commitment to spend money over the next 10 years.
“But if you compare the relative size of the profitability and revenue generated at Manchester United with Chelsea, I think a figure between £4bn and £4.5bn is appropriate and if there is a lot of interest that will drive the price up.
“Manchester United is a unique asset, it’s a global brand, so £5 billion is not impossible, but it would be very much over the top.”
Melissa Reddy: “When you look at the valuation of football clubs and sports teams in general, it’s reaching a peak period in the midst of a global financial outlook that is quite bleak and is only going to diverge over the next few years.”
Who could buy them?
Melissa Reddy: “United’s financial advisers are the Raine Group – they oversaw potential bidders for Chelsea. They have a lot of interest on the record of very rich people looking to invest in a football club.
“For Liverpool, they are being advised by Goldman Sachs, who helped Clearlake Capital who are part of the consortium that bought Chelsea. With both teams bringing in people who were so heavily involved in that process, that tells us a lot.
“The big thing is to make 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 it was a troubled company at the time.
“Chelsea is a big club, Manchester United is a bigger club – there’s no doubt about that. So I think we will see interest from the US first, a lot of private equity firms feel that football – and the Premier League, in particular – is 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 areas in the Middle East for potential investors to decide, on the back of Qatar and success for other Middle Eastern owners, that they might be interested in buying 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 gathering of minds.
“Sir Jim is a very successful person because he knows the value of a business. He has already invested in French football and other sports as well. He will not pay too much, but at the same time he will be interested in what the current owners are looking for, in terms of price, and if it’s appropriate, there’s no reason why he wouldn’t throw his hat in the ring.”