Raine Group to Commence a Third Round of Bids
Manchester United’s fans war of attrition with the Glazer family is set to continue for the foreseeable future. As Manchester United’s owners continue to hold the club hostage, impatience from supporters and bidders alike continues to fester. As if the waiting game wasn’t bad enough, the Glazers have decided to commence a third round of bidding for the club, in the wake of reports saying they now want to remain owners.
Several British and US media outlets are claiming that multiple promising bids had been submitted during the second round. However, none of those bids is believed to be considered satisfactory. At least to the Glazer family. Especially after a world record deal for $6 billion was agreed for the Washington Commanders.
Depending on which news source you get your daily dribble from there were anywhere between three and ten minority bids for the club and two to four full purchase bids. Every media outlet agrees that Sir Jim Ratcliffe and Sheikh Jassim bin Hamad Al-Thani are two of the full purchase bids and the front runners so far. It is the other bidders and the nature of their bids that still remains subject to speculation.
More Bidders Surface…
Sky Sports believes that there are no fewer than three interested investment firms from the United States. Each has submitted bids for either a minority stake or a financing option. Interested firms include the Carlyle Group, Elliot Investment Management, Ares Management Co., and Sixth Street Partners.
Where as other media sources including Sky Sports and the BBC have closely tracked the developments around Finnish entrepreneur Thomas Zilliacus’ interest in the Red Devils. Both, along with ESPN, have released a statement from Zilliacus revealing that he was one of the bidders during the second round. However, discontent with his experience dealing with Raine Group and the Glazers, he is now abstaining from entering a third round of bidding.
Rumors are that he feels slighted by the unprofessional nature in which the Glazers are managing this process. Surprise, surprise (sense my sarcasm). Here is his full statement, I’ll let you be the judge:
Thomas Zilliacus not to Participate in a Third Round of Bidding
”My original bid was for a specific sum plus a premium to be negotiated with the sellers.
“Raine Group, the bank that handles the bidding process on behalf of the Glazer family, wrote to me saying they would contact me to agree on the next steps. That contact has not materialised. I have not been given access to the data room and have not received the crucial information that has been provided to other bidders.
“I will therefore not participate in a possible third bidding round as it is impossible to put in a proper bid without the information that has been given to other bidders.
“Reports say that the Glazer family wants £6billion for the club. Based on the information I have that is above what the club is worth. While my consortium is able to pay that sum, we will not make a bid that makes no financial sense. Football clubs must be run long term as commercial ventures. The club will suffer if buyers pay sums that are above what the real value is, as it means less money is left to invest in the club.
Zilliacus Calls Out the Glazers as Greedy and Unprofessional
His statement continues…
“It seems that the Glazer family only is interested in maximizing the money they can take off the table for themselves without much concern for Manchester United.
“Considering the fact that they already have recovered their entire investment in dividends they have paid to themselves this is a stand I cannot accept. It is normal and acceptable that owners want to maximise their returns. The focus on money should however in the case of a football club be balanced by a respect for the fans and the club, which existed long before any of the current owners were born and will continue to exist long after they are gone.
“I wish the next owners, be it Sir Jim Ratcliffe or Sheik Jassim, who I believe both have a true passion for United, the best of luck with the club. The best football clubs should not only be the best clubs on the field but also off it, and operate on a foundation of respect, equality, dignity and racial harmony, with its global fan base included and involved in major decisions.”
Zilliacus Says What We are All Thinking
Zilliacus is clearly calling out the Glazers for being greedy, unprofessional and disrespectful to the club and fans. Everything he is saying about this process is completely true. And I for one am astonished that he is the only bidder to come out with such accusations. It does make one wonder, if Zilliacus is trying to play on this situation for his own marketing purposes, or if he was actually a serious bidder slighted by the Glazers.
He made it clear that his impression of the Glazers is that they are milking this process to walk away with as much money as possible. No surprise there. He also calls out their gluttony for the indignity that it is.
The main reason being that the Glazers have already recuperated what they paid for the club by reimbursing themselves in dividends. The second reason is the lingering billion dollars in debt and outstanding payables. The third being the billions of investment needed in the club.
It simply isn’t fiscally responsible for any bidder to pay over the odds with the numbers currently on the table. $6 billion up front + $1 billion in debt + $2 billion investment into the club and infrastructure + $500 million in player aquisitions = $9.5 billion out the door to buy United. A team valued at $4.7 billion on the stock market.
Zilliacus isn’t shy about pointing out any of this. Whether he was a serious bidder or not, none of what he is saying is out of character for the Glazers. It is a refreshing approach and one that actually confirms Zilliacus’ philosophical credentials for owning United. If he was a sincere bidder then it is a genuine shame he is pulling out of the process.
Glazers to Stay at Manchester United?
Making matters more frustrating for the supporters is the most recent reports to come out in the last few days. Apparently ESPN and Sky Sports believe that the Glazers are now happy to stay at the club. They further claim that the Glazers are actually expecting to stay at United.
I just have one question, is any of it true? Or, is all of this nonsense coming out in the media everyone’s way of simply playing the game? There are so many reports coming out. What exactly are the public meant to believe?
First Sheikh Jassim purchasing United was all but a formality. Then the Glazers hinted they wanted to stay, only for rumors to surface of a disagreement between the Glazer siblings about selling the club. That was all quickly brushed aside when a second round of bidding was demanded by the family. Now a Finnish billionaire, whom no one knew had even bid, is pissed off at the Glazers and is withdrawing his bid.
Enter round three of bidding…
Then finally we come full circle, no more than a week after a third round was announced. The Glazers suddenly want to stay as owners again. Forgive my French but this is a fucking nightmare, a goddam chaotic shambles, with no true north. I now seriously doubt if even the Glazers fully know what is going on.
Where Does a Third Round of Bidding Take United?
It has been more than a month since the second round of bids were due to be submitted. Yet, only in the last few days has more information about where Manchester United are in the sale process surfaced. It appears that both the bidders and the fans are growing restless.
Even journalists are beginning to wonder what is going on. What are the Glazers angling for? And why is a third round of bidding necessary, especially if they are anticipating sticking around at Old Trafford? No one can seem to sus out what is going to happen to Manchester United. It appears to all be a game of Monopoly to the Glazers.
Demanding a third round of bidding almost takes United further from being sold. It is clearly disrespectful and as a result a third round becomes automatically inflammatory.
Any bidder, like Thomas Zilliacus, is going to look at this situation and wonder what’s the point? How much more money do they want to extort from this situation? And why should I invest my time and money if they aren’t actually going to sell? or if all they want to do is drive up the clubs value to get a better rate on a financing deal for partial stake in the club.
On the flip side this is also likely the last chance any bidder has to buy United before the Glazers decide to stick rather than twist. And it looks as if they Glazers will only sell for a number north of $6 billion.
The Glazers go from Sordid to Shameful
It doesn’t take genius to see what the Glazers are doing.
First, it is clear that they have yet to receive a bid within their negotiating range.
Second, they saw enough promise in the bids received, that they believe they can push for higher bids in a third round. And one may surface that entices them one way or another.
Third, they are willing to sit on the club for as long as it takes. They don’t care about how it might effect the new owners ability to prepare for the following season. They see what ten Hag is doing and know that as long as the team are on the up they can ask for as much money as they want. Eventually they will get it, and until then they can keep taking their dividends.
Fourth, they are arrogant enough to believe they are handing over a winning formula to whomever buys. They will sell bidders on the fact that United’s commercial revenue is unrivaled and ten Hag is building a successful team. They will also sell bidders on United’s future valuations of more then $10 billion inside of ten years.
But, I doubt that any bidder will look at the near billion dollars in combined debt and payables that the Glazers have levied on the club as a winning formula. Or the neglect shown to Carrington and Old Trafford as a winning formula.
And finally, fifth, they are still more interested in selling the club than keeping it. Otherwise why instigate a third round of bids? Why not take the highest minority bid, syphon their dividend, put the rest into the club and call it a day?
Gary Neville Calls Out the Glazers
For now, the only reports making the tabloid rounds are that Sir Jim Ratcliffe and Sheikh Jassim are going to submit third improved offers. And the Carlyle Group have submitted a partial stake bid. One that would essentially allow the Glazers to refinance the club like you would a house. This would allow the Glazers to levy more debt against the club. Everything else is pure speculation.
Gary Neville said it best in a recent tweet:
“They’re making it up as they go along! Shoddy way to run a sale process. They need to get out by end of May to allow the new owner a fighting chance to impact the next transfer window and get moving!’
‘Taking it to a 3rd round (of bidding) is just classless. The market has obviously not given them the answer they want! It’s like they’ve made a pact to each other that they won’t go for less than £1bn each family member. If they stay in after all this it will be toxic!”
The Glazers can show up to as many cup finals and placate the fans with hollow words as much as they want. They have shown their true colors long before this process began.
Manchester United is Not Just Another Business Deal
Alex and John called this, play by play, on the pod. The Glazers were always going to hold the club hostage. This process was always going to be dragged out. To expect the Glazers to, for once, do the right thing is naïve. And finally, just because they half mentioned the possibility of a sale, and are entertaining the idea of selling, does not mean they will sell.
However, I do have a hard time swallowing one fact laid out by Alex and John. That this is a normal way for this process to play out. That, when buying and selling commercial entities, sometime more than half a dozen rounds of bidding is completely normal. And that the Glazers are simply being ruthless businessmen making decisions that ruthless businessmen make. Nothing out of the ordinary.
While that might be true in normal M&A (mergers and acquisitions) processes this is far from a normal business acquisition. Based on my limited understanding, I agree with Zilliacus on this point. That is to say that, normally multibillion dollar companies do not take their consumer base and company heritage into significant account when establishing the value of the business.
But a sporting enterprise, by nature, is defined by their supporters. And respect for those supporters should be reflected in the negotiation process. A romanticism rarely afforded to retail consumers.
Fans Get No Respect from Defunct United Owners.
When valuing any sports team, that teams history, and fan base are a huge factor in determining its value. The sheer reach of the fan base of a sports team is what determines large chunks of the clubs revenue. Less fans means less merchandise and tickets sold. And less attractiveness to sponsors. While it is the teams history that establishes it’s fan base.
My point is, the Glazers are all to happy to insult the supporters repeatedly, yet we are the foundation of their commercial success as owners. Without the support of us as fans, the Glazers have nothing. And as such, as Zilliacus points out, our opinions, and respect for our support should matter. It should provide the sentiment necessary for our owners to be, at the very least, more flexible, informative, reasonable and respectful in this process.
But, sentiment in business is a risky concept, one that rarely pays off. The lesson here appears to be, that believing that sentiment has a place in business negotiations is naïve. And to believe that it would actually convince an owner to lower their asking price is plain stupid. Sorry Zilliacus.
Third Round of Bids Means this is Far From Over
Regardless, a third round of bids is salt in the wounds to the fans and the bidders. But, if it gets us a step closer to a sale, then…why the fuck not.
God help us all if the third round fails to elicit a satisfactory bid. The prospect of any more time spent under the Glazer tenure is tantamount to a footballing equivalent of the reign of Henry VIII
This process is clearly far from over. Fans can only hope and wait. Hope that someone has enough money, enough love for United (or stupidity depending on how you look at it) and enough ability to play the game that the Glazers are running.
If John, Alex, and Zilliacus are right, which they are, in that $6 billion is the minimum asking price, then it will take someone with a true love for the Red Devils to willingly fall into the Glazers web of greed. At the moment, that appears to be Sir Jim and Sheikh Jassim.
Hopefully I am wrong about the questionable moral and human rights issues involved with both of them. Hopefully, one of them is triumphant and whichever of them does take over, they will channel their passion for United into a winning formula for the club. And hopefully, this process is over by the end of the season to give ten Hag a fighting chance in the summer transfer window.
But it is the hope that kills us, and Glazers are the biggest hope killers of them all.
Glory, Glory Man United.
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