If we do get sold I would hope we get Bellingham and Mbappe in the summer.
Club Sale | It’s done!
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I can’t believe people actually believe the Apple rumour. No chance.
I agree with you. My last post's intention was just to draw a final line under the Apple speculations.
If there's any interest in further in-depth analysis (from investors' point of view), I'll be happy to be at your disposal for sharing the results of my research on this topic
As for the rest, I'd like to maybe bring another possibly more realistic bidder's name into the discussion - namely Howard Marks-led Oaktree Capital Management which wikipedia describes as "an American global asset management firm specializing in alternative investment strategies." and even more importantly according to wikipedia "Since its formation in 1995, has become the largest distressed-debt investor in the world."
Src: Wikipedia Article - Oaktree Capital Management
1. Oaktree have already taken their first steps as an investor in European football by acquiring a minority stake of Inter Milan in 2021.
Further reading: https://www.reuters.com/lifestyle/s...-milan-336-million-financing-deal-2021-05-19/
2. Oaktree were among the bidders for the acquisition of Chelsea FC earlier this year which undoubtedly shows the firm's interest to scavenge a piece of the Premier League cake.
Further insights: https://www.ft.com/content/c031e021-9b76-45e6-be61-62ddec48c36a
Maybe this is not what Man Utd fans want but what Man Utd needs.
I think people need to brace themselves for this
Apple is not buying us FFS. There would be literally zero strategic fit and zero synergies to be captured in such a transaction.
Source: years of M&A experience advising private equity and corporate clients on dozens of multi-million / billion dollar transactions
Source: years of M&A experience advising private equity and corporate clients on dozens of multi-million / billion dollar transactions
I'd agree even though I'm merely a janitor of the capital markets!
Having said that would you say Elon buying Twitter made sense with respect to synergies etc?
Just 2 examples of making money out of United for Apple
- Man Utd tv with great content following the first team etc - subscription
- live streaming of United games - subscription
- develop a VR app where you can look around OT, trophies, history videos, watch live matches at OT on VR from your home - buy gear & subscribe to a digital season pass
- name on shirt, players using iPhone etc
- coaching staff all using iPads, macs etc
sorry that’s 5
Squashed by who? A bunch of android fanbois.
Someone’s already mentioned Musk and Twitter but how on Earth do you explain INEOS, a chemicals company getting into all kinds of sports ownership?
No way. Some faceless private equity fund? I will rather have Apples
MacRumors is are not reliable nor do they have any connections to Apple. Just because they have a blue checkmark doesn't make them important. Luckhurst is far more reliable than them and even though I do not believe in this rumor, seems a little too good to be true, he's far more reliable than MacRumors for their respective field reporting, that's for sure.
Yah no synergy, just like Amazon buying whole foods. Online Book store buying a supermarket.
Or AWS.
So dumb of bezos
VR in stadiums being potentially the future was my only thought but they could do that either way.
Pretty sure they can strike deals for most of those without buying the whole club.
How quickly, in the real world, could a deal like this be done?
Depends. The Glazers are not under pressure to sell. They will take their time, wait for bids, evaluate, and pick the most profitable one. Then you have the actual sale, which could take awhile.
I could see all of this taking between 8 to 12 months from start to finish. Long enough to disrupt the summer transfer window, which is what worries me.
It will be a long while. Of course it could also happen faster if the Glazers want to get rid as soon as possible and a large enough offer comes in from an ambitious side.
It vary from few months to a year. It depends on whether the Glazers has already someone lined up and are now pushing him to commit himself or if its truly an auction
I know right? Is the caf one day behind twitter and news outlets?
Not yet clear what (if anything) will happen. Quite possible that some/all of the Glazers remain, even if a significant portion of the club is sold.
Premier League TV rights are a package deal, Apple wouldn't be able to have a game streaming subscription without acquiring the whole leagues rights.
That wouldn't be a bad idea, then only show our games.
Those deals strike me as more along the lines of vanity projects for wealthy individuals (INEOS is a corporation but it's privately owned, with Ratcliffe as its majority owner). Apple by contrast is a publicly listed company. Shareholders would not take kindly to such an investment IMO.
That said, in some of the sports where INEOS participates, you can argue there does exist some overlap with their core business (e.g., polymer development for their F1 cars which can then be sold to their automotive customers).
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What a shit example. Plenty of synergies to be captured between retail and e-commerce.
It seems Tony O'Neil has heard something regarding Kuwait. Or otherwise I don't believe he'd just throw their name out there randomly.
And like I've said before, this type of owner would bring a balance to the EPL and have us competing on a level playing field with Man City.
As somebody else mentioned, Apple does not need to purchase the club to be able to do those things. The two parties can agree sponsorships, partnerships, and exclusivity deals without requiring Apple to assume the club's assets and liabilities.
I asked this yesterday but why is this? I don’t think for a second that apple would be interested but why would shareholders be pissed about acquiring a business that is as guaranteed as it comes to generate (debt free) profits of 100m + /year?
Ignoring even the possibility of a firm like Apple maximising the profitability of the VR/content side of the most popular football club on the planet?
It’s as low risk an acquisition as one could imagine, let’s not forget Chevrolet paid 559 million dollars just to be a sponsor on our shirts for 7 years.
Considering what it cost Chevrolet for just 7 years of shirt sponsorship, you, more than anybody should know it’d actually make much more sense just to spend the 5bn when you’re as rich as apple and have it all, 100m+ annual profits, content, marketing, advertising, shirt sponsorship, ground sponsorship etc etc forever.
They won’t mind, but I think you’re coming at this one from a funny angle.
$100M represents about 0.5% of Apple's annual net profit. It's practically a rounding error. It's also a very poor return on a $5B+ investment, unless said investment was mostly debt-financed. Even then, with current interest rates I can't imagine it being very attractive. In other words, there are significantly better ways for them to invest their free cash flows.
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I don’t know what someone with insight from the financial advisor side like @Big Ben Foster would say, but from a legal point of view — you can buy the Glazer’s shares with a simple transaction note. It’s shares of a listed company, you don’t need to do a due diligence. No procedures that must be met. I have done a bigger transaction value wise during an afternoon when someone learned they would get sanctioned 08.00 the next day.
But if the buyer want full control of United and want to get rid of the minority owners, it’s a process on the Cayman Islands. Probably a merger between a BidCo and Manchester United plc in which the existing shareholders get 100% cash as merger consideration (as I’ve understood it, that can be done on the Caymans, if supported by a share holder vote). I have no experience with making transactions on the Caymans, but would guess that a merger there from start to finish max would take a couple of months. But — before the formal merger procedure even begins — an agreement would be reached between the Glazers and a buyer. I.e., we would know who the buyer would be. There is a risk that we have a period of perhaps a few months where new owners cannot provide funds for the club without disturbing the merger.
How long does it take to find a buyer? Sincd the Raine Group also did the Chelsea sale, I thought it could be interesting to look at the rough time schedule for that transaction:
1. Abramovich was of course aware that he was likely to be sanctioned by the UK since late February 2021.
2. Abramovich put up the club for sale on 2 March 2022. At this point, Raine Group was engaged.
3. Raine Group invited interested buyers to make indicative offers for the club, including of course presenting themselves. The deadline for indicative offers to be submitted was set to 18 March 2022.
4. Around six- to seven bids were believed to be made for Chelsea, including:
* Stephen Pagliuca -- Founder (I think) of Bain Capital, and co-owner of the Boston Celtics
* Todd Boehly
* Saudi Media Group
* Centricus -- "An entirely British backed bid led by London-based asset management firm Centricus "
* Nick Candy -- U.K. property developer. Interested in building a new London stadium?
* Martin Broughton -- Former LFC chairman, backed by consortium
* Ricketts family -- Cubs owner
And perhaps also one or more of:
* Oaktree Capital
* Woody Johnson -- Johnson, 74, is an heir to the Johnson & Johnson consumer products fortune.
5. By 25 March 2022, a short list was created with 3-4 bidders.
The Saudi Media Group's offer did not make the short list.
6. The shortlisted bidders was given until April 11 to make improved offers for Chelsea
7. A preferred buyer could not be selected by mid April, as intended.
8. On the 28 April, Boehly was named the preferred buyer.
9. On the 29 April, Jimmy Radcliff made a bid.
10. On 28 May, the sale to Boehly was approved.
Some thoughts:
- The Saudi offer did not make the short list with reference to how it had desire to do due diligence on the club which didn't play well with Chelsea's eagerness for a quick sale. From my POV, this is 99.9% a made-up excuse to not get Saudi owners of Chelsea. Like I can of course not be 100% certain, but a DD of a soccer team must be very light. Compare it to a company with 10 factories and 100,000 employees. My bet is definitely that they didn't want to sell the club from an Oligarch to a dictatorship.
The Saudi bid was rumored to be of 2.1bn, and the sale ended up being 2.5bn. But ultimately, what you do is that create this short list, and then give the bidders on it to bid over each other. So that doesn't mean much.
- The time table above, just under 4 months, is tight and Chelsea wanted to get something done quickly. But its at the same time nothing extreme. I would say that 3-4 months is possible, 6-8 months is giving the process good time, and if it goes beyond that -- there is either some hick-up or the Glazers are shopping for a higher bidder to come out of the woodwork.
But not significantly better ways to acquire the levels of content etc you were speaking of. As I said, it cost chevvy 560m just to be shirt sponsors, 5bn is such a small amount to apple that I want to know why shareholders would be so pissed? They’d get that sponsorship and the content, and profits, forever. Over just 20 years that’d be what? 250m a year? With 100m /year of that minimum coming back in profits.
It’s profitable, it can cost 560m just to sponsor them for 7 years, it’s as rock solid an investment as you could hope for.
Fascinating stuff. Thanks for such a thoughtful and detailed reply!
Go post sir
It's not like the idea of Apple acquiring Man Utd wouldn't appeal to me as well.
For the aforementioned reasons I just don't think that there is any chance this might actually happen.
And it should be noted that Oaktree isn't faceless. You just don't know who Howard Marks is.
But they are specialized in reporting on Apple activities and have decades of experience covering the tech industry and Apple, specifically.
How can Mr Luckhurst be better informed about internal considerations at Apple than the journalists who are literally married with Apple?
Why would you assume his source was apple?
sod it, my inner transfer muppet says yes to Apple
I'm not sure the new owners will be very popular if they skim off 100m of the club's profits every year! The Glazers are (rightly) crucified for taking £25m pa in dividends.
Actually we’d be fine with the Glazers doing that, just as we were with the plc, if we weren’t at the same time servicing massive debt placed on us by the same people taking those dividends.
I don’t think apple will have any interest, I’m just miffed as to why shareholders would be so annoyed at such an acquisition. United is like buying gold, as much a thing as you can get for a relatively cheap price (in their terms) and massive possibilities
Re. the question if we are destined to be bought by a US consortium:
1. I think it’s the most likely option. This buyer would 100% be a placeholder for another buyer, over a period of like 5-15 years.
There is zero percent risk that someone buys us to live on the cash flow generated by the club, like the Glazers. We are way to expensive for that. The dividend would be completely irrelevant at a 6bn price, and if investments aren’t made they get less for the club when they sell it than when they bought it. They would be buying Manchester United and be selling (an asset worth as much as) West Ham United.
If you buy this club as a hedge fund, you do it to acquire an asset on decline due to lack of available funds for necessary investments, to invest it in, and then in the future make a profit when you sell the club. Simple as that.
You can get this club and turnt it into one of the top 4-5 clubs in the World in 10 years with brand new top facilities for a cost of app. 9bn. 6bn to buy the club, 1.5bn for New Old Trafford and Carrington and 150m per year extra for transfer funds over 10 years.
2. The fact that there is little strategic value in owning Manchester United today, does not mean that this will be the case forever. We have not reached the end of the road as to how the media landscape will look until the end of time. There have been tremendous changes the last 30-40 years in this industry. There will be more changes in the future. Sport rights have built tremendously powerful media corporations. As it is now, the broadcasting rights are more valuable than ever — but the individual clubs have little power over how they are distributed. This is not written in stone and have been challenged — constantly — before. With the super league dead, who knows, someone might want to dent the PL's joint selling arrangement.
Ultimately, we are heading toward universal broadcasting models. How would that impact the strategic value of a club?
So are Apple, Tencent, Amazon, Xiamoi, Alibaba, Rakuten, Netflix, Samsung, Google or Disney buying us? Would of course be tremendously surprising. But at the same time, we are worth 6bn with another 3bn needed in investments to maintain the club's value. That is not a lot of money. You cannot buy any of the top 600 listed companies in the us for 6bn.
3. One of the points I have is that 1. and 2. are connected. If you buy us now, make the necessary investments, you should get your money back and a decent return in 10 years. The value of assets like our club just goes up. In addition, owning Manchester United brings status. Open doors. That is always important. But the big value lies in that for such a tremendously big brand this club has -- its not valued at all. A big computer game title like Fortnite is worth like 5x as much as our club.
I don't for a second believe that someone -- today -- can come in and turn this club into an immensely profitable operation. But a hedge fund buyer is definitely looking 10 / 15 / 20 years and coming to the conclusion that our brand should at least not be worth "less" when they are looking to sell the club, and there is potential to add a lot more value.
4. The process will not be designed to find a buyer in the form of a US consortium. There have been talks about how the Glazer's would prefer a US buyer and so forth, I don't for a second believe that. The Saudi's bid for Chelsea. Why wouldn't they bid for us? You have the Chinese. I wouldn't at all rule out that a rich person in India or Spain buys us, that a Saudi investment fund buys us, that a Chinese individual or company buys us. The Chinese owns 13 percent of City. It is not hard for a state fund to buy us -- just because we are a public company.
This does not mean that we won't be buy by a US investor, which seem most likely.
1. I think it’s the most likely option. This buyer would 100% be a placeholder for another buyer, over a period of like 5-15 years.
There is zero percent risk that someone buys us to live on the cash flow generated by the club, like the Glazers. We are way to expensive for that. The dividend would be completely irrelevant at a 6bn price, and if investments aren’t made they get less for the club when they sell it than when they bought it. They would be buying Manchester United and be selling (an asset worth as much as) West Ham United.
If you buy this club as a hedge fund, you do it to acquire an asset on decline due to lack of available funds for necessary investments, to invest it in, and then in the future make a profit when you sell the club. Simple as that.
You can get this club and turnt it into one of the top 4-5 clubs in the World in 10 years with brand new top facilities for a cost of app. 9bn. 6bn to buy the club, 1.5bn for New Old Trafford and Carrington and 150m per year extra for transfer funds over 10 years.
2. The fact that there is little strategic value in owning Manchester United today, does not mean that this will be the case forever. We have not reached the end of the road as to how the media landscape will look until the end of time. There have been tremendous changes the last 30-40 years in this industry. There will be more changes in the future. Sport rights have built tremendously powerful media corporations. As it is now, the broadcasting rights are more valuable than ever — but the individual clubs have little power over how they are distributed. This is not written in stone and have been challenged — constantly — before. With the super league dead, who knows, someone might want to dent the PL's joint selling arrangement.
Ultimately, we are heading toward universal broadcasting models. How would that impact the strategic value of a club?
So are Apple, Tencent, Amazon, Xiamoi, Alibaba, Rakuten, Netflix, Samsung, Google or Disney buying us? Would of course be tremendously surprising. But at the same time, we are worth 6bn with another 3bn needed in investments to maintain the club's value. That is not a lot of money. You cannot buy any of the top 600 listed companies in the us for 6bn.
3. One of the points I have is that 1. and 2. are connected. If you buy us now, make the necessary investments, you should get your money back and a decent return in 10 years. The value of assets like our club just goes up. In addition, owning Manchester United brings status. Open doors. That is always important. But the big value lies in that for such a tremendously big brand this club has -- its not valued at all. A big computer game title like Fortnite is worth like 5x as much as our club.
I don't for a second believe that someone -- today -- can come in and turn this club into an immensely profitable operation. But a hedge fund buyer is definitely looking 10 / 15 / 20 years and coming to the conclusion that our brand should at least not be worth "less" when they are looking to sell the club, and there is potential to add a lot more value.
4. The process will not be designed to find a buyer in the form of a US consortium. There have been talks about how the Glazer's would prefer a US buyer and so forth, I don't for a second believe that. The Saudi's bid for Chelsea. Why wouldn't they bid for us? You have the Chinese. I wouldn't at all rule out that a rich person in India or Spain buys us, that a Saudi investment fund buys us, that a Chinese individual or company buys us. The Chinese owns 13 percent of City. It is not hard for a state fund to buy us -- just because we are a public company.
This does not mean that we won't be buy by a US investor, which seem most likely.
Dividends + debt servicing only amounts to c. £45m pa under the Glazers. If Apple (or whoever else) were taking £100m out of the club each year, they'd rightly face mass protests (debt or no debt).
United may well be a lucrative investment, but that's not because of its cash profits (which will be largely off-limits to any prospective owner (I hope!))
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