Man United Opens Champions League as Stock Slumps on Sale Skepticism
While Manchester United ($MANU) is back in the UEFA Champions League after missing out last season, the club is struggling both on and off the pitch. The Red Devils have had a shaky start to the Premier League season with just two wins and three losses, lost their Wednesday group stage Champions League match to Bayern Munich, 4-3, and their stock is plummeting because of rumors that the Glazer family has tabled discussions of selling the team.
Two weeks ago, the Red Devils’ stock shed over $600 million (£500 million) in market cap following the Daily Mail’s report that the Glazers has taken the club off the market. Since then, the club’s shares, which trade on the NYSE, have traded as low as $18.50—they peaked at $27.34 in February—during the process. The club’s shares were down 12% over the past month.
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Last November, the Glazer family hired Raine Group to seek “strategic alternatives,” including accepting minority investment into the club or selling the club. After months of negotiations and bidding rounds, the Glazers still do not have a unified decision on what they will do with the club, according to people who are familiar with the matter.
Two bidders, INEOS founder Jim Ratcliffe and Qatari Sheikh Jassim bin Hamad Al Thani, who made their intentions public, have not met the Glazers’ rumored $7.4 billion (£6 billion) asking price. Sheikh Jassim reportedly offered to pay $6.31 billion (£5 billion) for 100% of the club; if Jassim buys the club, the Glazers and all minority shareholders will be bought out. Ratcliffe, on the other hand, offered to buy a controlling share of the team, rather than 100%, according to people familiar with the matter.
If the Glazers decide not to sell or take a strategic partner, they must attend to a few key issues, including the renovation of the team’s landmark stadium, the 74,000-seat Old Trafford. A handful of rivals in the Premier League—including Tottenham, Liverpool and Everton—renovated or upgraded their stadiums in the last few years to increase stadium revenues, as did LaLiga’s Real Madrid and Barcelona. Both Sheikh Jassim and Ratcliffe included Old Trafford’s renovation into their bids for the club.
In terms of match day revenue, the Red Devils generated over $130 million in 2022, tops among Premier League teams, but Tottenham Hot Spurs, the team that has arguably one of the best stadiums in the world across all sports, is likely to surpass Man United next season as it is adding new opportunities to maximize stadium revenues.
Manchester United announced last year they had sat down with architects Populous and management firm Legends as consultants for the stadium project. While the plans have yet to be made public, it was presented to United’s fan advisory board in July 2022.
Manchester United did not respond to Sportico’s request for comment.
Twenty years ago, the late Malcolm Glazer bought a 2% minority stake in Manchester United for about $5.6 million. Two years later, he executed a leveraged buyout of the club at $1.5 billion, spending $470 million (£270 million) of his money, taking $1 billion (£600 million) in debt to fund the rest. When Glazer purchased the team, it had no debt; today, the club carries $1.261 billion (£725 million) in debt, which presents a huge obstacle if the team needs to borrow money.
Man United has not won the Premier League since their legendary manager, Alex Ferguson, retired in 2013 after winning 38 titles in his 26-year reign at the club. But the club is still one of the most successful teams in global soccer and the most valuable team in EPL, worth $5.95 billion according to Sportico’s valuations.
Over the 18 years, the family reportedly spent $1.5 billion, mostly in player transfers, while growing revenues from $366 million in 2009 to nearly $800 million in 2022. The team spent $219 million (£177 million) this summer, significantly less than a few of its peers. Todd Boehly’s Chelsea spent $505 million (£408 million), Sheikh Mansour’s Manchester City shed $260 million (£210 million) and Arsenal spent $252 million (£204 million), according to Swiss Ramble.
(This article has been updated in the first paragraph with news of Man United’s loss to Bayern Munich.)
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