Is Manchester United Really For Sale?
Is Manchester United still for sale? Round three of bidding for Manchester United concluded weeks ago. Contrary to logic and public desire, the Glazer’s seem no closer to selling the club than five months ago. Reports vary regarding the details involved with the different bids submitted. Though some consistency does exist.
The prevailing opinion is that Sir Jim Ratcliffe and Sheikh Jassim bin Hamad Al-Thani remain the front runners. There is little to no information circulating in relation to the the various hedge funds and investment groups that had shown interest in previous rounds. Though that does not mean they are technically out of the running.
Both Ratcliffe and Jassim’s bids are believed to have their advantages, but neither has been accepted yet. The Glazer’s continue to string everyone along in a process that has been universally agreed upon by media outlets and fans alike to have gone on for far too long.
Despite claims that this is a normal M&A process, fans are impatient, the media is taking advantage of the situation, and the longer this goes on the more power of speculation the media have.
While waiting not so impatiently, we United fans are left interpreting the vast ocean of false reports, speculation, aggrandization, misinformation and propaganda.
Sheikh Jassim’s Bid
The most straight forward bid is Sheikh Jassim’s. The outstanding detail for fans is, he wants 100% ownership of the club. Meaning, under no circumstances will the Glazers remain at United in any capacity. He will wipe all of United’s debts clean. And essentially hit the reset button on Manchester United’s financial structure.
Sheikh Jassm’s bid also includes initial immediate funds to invest into the club that are rumored to be north of $2.5 billion. Though, specific numbers remain ambiguous.
Backed by the Qatar sovereign wealth fund, there would presumably be no cap on the amount of money to be indefinitely invested into United. This bid would almost certainly be the quickest road to success for the Red Devils.
An astute bonus would be that Jassim would insist on immediate control over transfers for this summer if and when the moment his bid is accepted. He and Ratcliffe have no interest in allowing transfer strategy to go by the wayside while the club is going through ownership transition.
Lastly, the Sheikh’s bid would be a record amount, greater than the $6.05 billion that the Washington Commanders recently sold for. Which is reportedly the threshold the Glazer’s were hoping to break. However, as astronomical bid as it is it is still short of the £6 billion the Glazers are initially thought to have valued United at.
Sir Jim Ratcliffe’s Bid
The second, and perhaps most publicized bid from the third round is that of Sir Jim Ratcliffe. Media reporting around his offer includes more details then that of the one from Qatar.
First, should his bid be accepted, like the Sheikh’s bid, he would insist on immediate control over transfers, even prior to the sale officially concluding.
Another important aspect of the Ratcliffe bid is that he is bidding for a majority ownership not total ownership. Rumors are, he wants to purchase anywhere between 51-69% of the club, allow the Glazer’s (most likely Avram and Joel) to retain 20%, while continuing to float the final shares on the NYSE, or convert them into a fan ownership scheme.
Ratcliffe Values United Higher than Jassim
This type of bid allows Ratcliffe to value Manchester United higher than Sheikh Jassim.
Colloquially speaking, because he is paying less up front to take over the club, and both the fans and the Glazer’s will be allowed to remain investors, Ratcliffe has more flexibility when establishing a value for the club. Where as a total take over, like Jassim’s bid, finitely values the club at the proposed purchase price.
His valuation of United, while not exactly being reported, is estimated to be greater then that of Sheikh Jassim. Begging the question, do the glazers want the highest up front, clash out bid for Untied? Or do they want to the bid that potentially makes them the most amount of money long term?
In my opinion, the overall valuation of United appears to matter more to the Glazers than the purchase price. If only because it nets them the most amount of money, regardless of how long it takes for their return to come to fruition. And to that point, Ratcliffe appears to have the advantage over Jassim.
The Glazers could find this offer very enticing. They sell their majority ownership for a large chunk of change. But they get to remain financial investors in United until the club’s valuation reaches an amount that allows them to cash out their shares for an even more mouthwatering sum.
The final reported stipulation with regards to Sir Jim’s bid is that he has the option to buy out the Glazers in the next three to five years and become 100% owner. Some consolation for fans that feel that the Glazer’s shouldn’t be anywhere near this club.
The Fine Print of Ratcliffe’s Bid
Full disclosure, it has been confirmed in the press that Sir Jim’s bid would include some structured debt. If this bid had not already produced a divide amongst fan opinions, adding the word debt to the situation automatically causes people to cringe.
However, there is nothing unusual about this. Anyone who has ever invested in property, the stock market, done a 1031 exchange, or have any kind of investment portfolio will understand that the word debt is not as stigmatizing as we commonly think.
Regardless, the most important fact to focus on is whom will be responsible for said debt. When the Glazer’s took over they placed the debt involved in their bid directly on the club. Essentially they leveraged the club to pay off the amount they paid for the club. Or at least that is my basic understanding.
However, in Ratcliffe’s bid, any and all debt, would only be a small fraction of his bid. And all of that debt is being placed on him and INEOS not the Manchester Untied. This is typical in these types of acquisitions, if only because it provides a better financial structure for his bid. But fans can rest assure that he is not leveraging the club in any way.
Not to mention the combined worth of Ratcliffe and INEOS is close to $90 billion. Meaning despite the word debt being thrown around in regards to Ratcliffe’s bid, that debt is leveraged against a company that nets more in a month than United net in a year. Making it a very low risk loan, while not leveraging United at all.
The Huge Divide in Fan Opinion
As far as the media is reporting, that is where the viable bids conclude. I find it hard to believe that all the other interested parties suddenly dropped out of the running. However, it is likely these are the two preferred bids and as such the most publicized.
That being said, these bids create a huge divide amongst United fans. There is a large majority of fans that want the Glazer’s out at all costs. Most don’t want any remnant of the them left at the club at all. Including Richard Arnold and John Murtaugh.
But fans have to ask themselves, at what cost does their unequivocal removal come to the club? The answer could be, too high a cost.
Fans appear to be seriously divided on this point. Some fans will dismiss Ratcliffe’s bid on principle because it allows the Glazers to stay at the club. While others would dismiss Sheikh Jassim’s bid for moral and political issues. Not to mention arguments and accusations of sports washing are heavily linked to both bids.
Further accusations to both bidders include using United as an inroad to gain soft power in the United Kingdom. Essentially treating Manchester United as a geopolitical tool rather than a football club. Any way it is looked at, there is no ideal bid, no ideal owner.
The Glazer’s Still Stand in the Way
Lest us forget there are very valid arguments that this is all a rouse from the Glazers. An act to increase the club’s value for a future sale. That they used this moment of protest against them to garner a higher valuation of the club to allow them to take a higher dividend next season. All the while waiting out the market to sell the the club closer to the $10 billion future valuation they have placed on United.
As Manchester United fans we live in this fantasy world where we believe in United’s infallibility. We believe that our club’s heritage entitles us to the most perfect owner. That each owner should be as smart, invested in the club and as benevolent as the great John Henry Davies.
But that simply is not how the real world works in this era. Like in this instance, sometimes it is a matter of choosing the better of all evils. Based on media reports, which bid that is, is purely down to speculation and personal opinion.
The bottom line is the Glazers valuation of the club. They value the club at two levels. The current value and the projected valuation. Despite the club publicly trading at about $19 a share, the enterprise value being just north of $4 billion, and a market cap around $3 billion, the Glazers value the club currently at £6 billion, or close to $7.5 billion.
Does the Glazers’ Greed Know No Bounds?
What’s more is they are rumored to want, at a minimum, a world record bid. Which would have to be north of $6.05 billion, as that was the recent world record sale price of the Washington Commanders.
The second level the Glazers value the club at is its future value. The have read the market and estimated that Manchester Untied will be worth $10 billion in the next five years. They appear to believe that this future valuation gives them the leverage necessary to demand an above market rate for the club.
This is where Sir Jim’s bid is a bit clever. He recognizes the game the Glazers are trying to play. He acknowledges that the Glazer’s care the most about how much money they can make from this sale. At the moment that answer is accepting Ratcliffe as controlling owner and holding onto partial ownership in the interim to cash out at a higher price in the near future.
His response was a bid that gives him control of the club, while allowing the Glazer’s to stick around and make more money as investors rather than prevailing owners.
On the surface, everyone gets what they want. Yet, like with Jassim’s bid, we are no closer to the club’s sale then we were at the turn of the year.
Is There an Answer for United Fans?
Fans’ opinion’s are hugely divided. Some believe that the state backed bid from Jassim represents blood money. Or a tolerance for human rights violations and terrorist funding. At the very least it is an acceptance that professional football is a inroad for soft power for the Middle East and Asia in western nations.
Other opinions paint Sir Jim as a megalomaniac and an egomaniac. They point out the fact that his petro-chemicals company INEOS is one of the worst environmental polluters in the world. And that INEOS has been at the center of multiple lawsuits, scandals and cover ups regarding their environmental impact and labor issues. Not to mention, many unfounded claims that he may become no better then the Glazers.
Other simply argue that anything is better than our current owners, regardless of who replaces them.
Are the Bids Really That Different?
Truth be told, both bids remove the Glazers from power. Both bids include significant stipends for immediate investment into the club. And both bids include a fan ownership proposal. They both wipe the current dept structure clean. And both bids insist on immediate control over transfers the moment after the bid is accepted.
So, if there are so many similarities, then what really divides fans between the two bids?
From what I can tell, the issue is either a moral divide, a monetary divide or a Glazer divide. This is to say that United fans seem to fall into three categories. Fans that care more about their moral obligation to the club. Fans that care more about the tangible investment into the club under new ownership. And Fans that simply want the Glazers out at any cost.
Ratcliffe vs Jassim vs Glazers
The first kind of fan tends to want to Ratcliffe as new owner. This is mainly due to the countless historical examples of human rights violations and terrorist funding from Qatar and the Middle East in general. Not to mention the numerous attempts of Middle Eastern nations, including Qatar, attempting to use professional sports as an inroad to soft power in Europe and the Americas.
The second kind of fan tends to get excited over the prospect of Jassim owning the club simply because of the almost indefinable funds that would become available to Untied. This is surely the quickest way back to the top of the totem pole where Untied fans are concerned.
What’s more, these fans tend to argue the environmental atrocities Ratcliffe’s company INEOS has committed. These fans feel that Ratcliffe is a megalomaniac only interested in boosting his own reputation in the wake of public scrutiny towards his companies environmental crimes.
The final type of United fan is simply so fed up with the Glazer’s existence at the club they would sign a crossroads deal on the spot just to oust them. This fan has little to no bias regarding one specific owner, just that it is someone other than the Glazers.
Manchester United, For Sale, Supposedly
The only thing that is clear is that there is no clear solution. No clear conclusion to this sale that benefits everyone. The contrast in fan opinion is so vast that I fear fans turning on each other rather than focusing on what is important…Removing the Glazers from power.
It is that point that United fans need to come together on. Because regardless of who owns United next season, we the fans are the constant force driving the club to success. We are what matters, not the owners, the CEO, the DOF, the coach or even the players.
Our unity drives this team’s success. And the only thing we can all unite on at this particular moment is our insistence that the Glazer’s are removed from power.
I can only hope, no matter your personal preference, that as United fans we can all come together in our most primal desire, to no longer subject our servitude as United fans to the whims and greed of the Glazer family. Surely the grass is greener without them.
Glory, Glory Man United.