Club Sale | It’s done!

[Roario]

You're not counting the growth of the asset in price as value, the club is worth 6 times what they paid for it. So, if the club where to sell for 5 Billion, - the 790mil it cost to buy the club (discounting the fact that over half of it was a bank loan they didn't personally repay at all), selling the club alone means they got 300million a year.

Sure if you buy with the intent of selling in 10 years time with the plan to increase the club value significantly.
Feels like a gamble though. With a new stadium possibly needed and who knows what else is in disrepair behind the scenes.
Who will buy it next If your price tag is 12 billion?
Seems like we will be bought by a state whatever happens next. If not this time around, then in 10 -15 years.
Unless the price growth of football skyrockets again.

 

[Powderfinger]

For sure, for most/many investors. If all our shares were of equal class and all floated on NYSE — I don’t think we would have a market cap of 7bn (as long as we saw no takeover plays).

But — with that said — many many companies pays zero percent dividend. Amazon don’t pay any dividend (growth company). Berkshire Hathaway never pays any dividend (investment company). At least 90% of the NYSE top 500 shares don’t pay 4% dividend.

How come everyone are interested in buying shares anyway? It’s of course because if you measure ROI you look at both direct yield (dividend) and the yield you get at exit, when you sell the share.

If you buy 100% of the shares of Man Utd today for 6bn and invest 3bn in the club, 1.5bn in the arena and Carrington and 150m per year over 10 years — how much will you get if you sell 100% of the shares 2033? At that point, with the 3bn investment, we would be far and away one of the top 1-3 clubs in the world.

If we are sold for 13.32 bn — the buyer got his 4% yearly yield. Right?

And remember, 13bn is a sick amount of money, but for a market cap, it’s a smaller amount.

I think on some level the basic issue is that nobody is really sure what a football club like United is worth because on the one hand you have one of the world's most iconic brands, on the other hand its not totally obvious how and to what degree brand loyalty/support actually translates into revenues if we are thinking about the next 10-20 years. How does being a supporter of a football club compare to being an active user of a social media site in terms of that company's ability to monetize your personal attachment? Should Manchester United be worth as much as Pinterest? I don't know. I'm not sure anybody really knows

What I do know is that you quickly reach a point above about 5b and certainly once into the 10-15b range where individual people simply aren't going to be buying clubs or companies unless you're talking about Elon Musk or a couple others. It's going to be some kind of private equity fund or its going to be a state's sovereign wealth fund.

 

[Ghostrider318]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

 

[croadyman]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

Yeah that's a possibility

 

[arthurka]

Is there a risk that the Glazers will sell the assets separately, such as the land around the stadium?
Also, on Apple, given they're a listed company, doesn't that make a takeover process more lengthy? Would they need some sort of approval from their shareholders?

They have so much cash it's costing their investors a fortune. It just needs something to spend money on. Dead cash isn't working for anyone.
https://www.investors.com/etfs-and-...ery-american-apple-has-more-cash-than-anyone/

 

[Tigersam]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

The budgets for the Jan and Summer '23 trfansfer windows have already been spent - after the panic of Brighton and Brentford. I suppose something could be done with the Ronaldo salary saving, a loan perhaps?

 

[MTF]

They have so much cash it's costing their investors a fortune. It just needs something to spend money on. Dead cash isn't working for anyone.
https://www.investors.com/etfs-and-...ery-american-apple-has-more-cash-than-anyone/

Investors want them to pay dividends and buy back shares of their own stock, not to invest in anything that comes to mind. The usual line of thinking in this as a shareholder is that you don't need the publicly listed company you invest in, to invest in other publicly listed companies. You're able to do that yourself as an investor, if they have excess cash you just want it returned to you via dividends and/or buyback.

 

[TheReligion]

The budgets for the Jan and Summer '23 trfansfer windows have already been spent - after the panic of Brighton and Brentford. I suppose something could be done with the Ronaldo salary saving, a loan perhaps?

No they haven’t

 

[RedDevilRoshi]

The budgets for the Jan and Summer '23 trfansfer windows have already been spent - after the panic of Brighton and Brentford. I suppose something could be done with the Ronaldo salary saving, a loan perhaps?

No they haven’t. We dipped into them to fund the Antony transfer but that doesn’t mean they’ve already been spent.

 

[peridigm]

Yeah that's a possibility

I’m leaning more towards this not factoring into the decision to buy in January. It’s quite possible we won’t regardless but when the club is going to be valued 4b+, what’s another 30-50m to bring in another player that would help increase the valuation and possibly have an affect on the outcome of our season.

 

[arthurka]

Investors want them to pay dividends and buy back shares of their own stock, not to invest in anything that comes to mind. The usual line of thinking in this as a shareholder is that you don't need the publicly listed company you invest in, to invest in other publicly listed companies. You're able to do that yourself as an investor, if they have excess cash you just want it returned to you via dividends and/or buyback.

This problem has been a problem for Apple for years, to there aren't many things left they can spend their cash on.

 

[MTF]

This problem has been a problem for Apple for years, to there aren't many things left they can spend their cash on.

And yet they haven't bought any companies that are outside of their core businesses, United won't be it.

Also there's no limit on stock buybacks. The answer can always be 'more' on that front.

 

[AlexUTD]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

Easier to sell if we secure 4th so i think the leeches actually will spend.

 

[TheRedHearted]

What about debt if they sell it? Debt is on the club so new owner gets 500 mil debt?

Depends on the bank, the bank may require the debt be taken care of before the sale

 

[Dion]

Fair enough, respect your view.

At the end of the day, for the last 30 years the club has chosen to do business with the likes of Aeroflot (Russian State-owned), Saudi Telecom (Saudi State-owned), Myanmar's CB Bank, simply because they paid the most.

We even accepted £1million to play in a testimonial in Saudi back in 2008, mid-season.

If you haven't walked away from the club by now, then why not?

Because you're employing a fallacy that everything on the same sliding scale is as bad as everything else on that scale and it simply isn't true.

 

[Dion]

Forgetting the specifics, this is a dumb argument. You do realise most governments are basically run by people and interests connected to billionaires like Ratcliffe?

It's not dumb. You just haven't thought about it fully.

Governments are a collection of vested interests with the power to curtail all kinds of liberties, those powers are extremely easy to abuse and they wield them directly. Billionaires like Ratcliffe have undue influence on those institutions (and in the case of Apple, the line is entirely blurred in places like the Congo), but it's at least one degree removed.

Governments only reason to own a football club is to exercise those powers with a greater level of impunity, by default any government that wants to own a football club should be immediately excluded.

 

[RedDevilUnited369]

The budgets for the Jan and Summer '23 trfansfer windows have already been spent - after the panic of Brighton and Brentford. I suppose something could be done with the Ronaldo salary saving, a loan perhaps?

I expect the team to be bolstered. Makes it a more enticing asset.

Any money spent before the sale will just be added onto the final price during negotiations.

 

[Messier1994]

I think on some level the basic issue is that nobody is really sure what a football club like United is worth because on the one hand you have one of the world's most iconic brands, on the other hand its not totally obvious how and to what degree brand loyalty/support actually translates into revenues if we are thinking about the next 10-20 years. How does being a supporter of a football club compare to being an active user of a social media site in terms of that company's ability to monetize your personal attachment? Should Manchester United be worth as much as Pinterest? I don't know. I'm not sure anybody really knows

What I do know is that you quickly reach a point above about 5b and certainly once into the 10-15b range where individual people simply aren't going to be buying clubs or companies unless you're talking about Elon Musk or a couple others. It's going to be some kind of private equity fund or its going to be a state's sovereign wealth fund.

1. This is a good article on the value of football club that describes that exact same things you are mentioning.
https://www.buyoutsinsider.com/theyre-in-the-big-leagues-now/

There are so many aspects to the return of an investment in Man Utd that are unknown, at the same time, the underlying value — like the “brand”/followers are there, unique, consistent, extremely rare etc — so the risk is definitely limited.

2. But if we look at like what have driven value for the Glazers, the aspect of ‘sports washing’ has definitely driven up the prices. If you don’t have the Taksin Shinawatras, the Abramovics, the City owners — we wouldn’t be discussing 5-6bn for United. Who foresaw that 17 years ago?

Another thing is the geographical growth of football.
*The PL rights in the US is worth 27m per PL team per year.
*The PL rights for Denmark, Norway, Sweden and Finland is worth 20m per PL team per year.
*The entire Asia and Pacific area is worth 15m per year.

There are 4.3bn people living in the APAC area, 160 times more than in the Nordics. The growth potential speak for itself.

3. It’s not easy to figure out what the metaverse is, there have been a lot of talk about NFTs and football, etc etc etc.

But like FIFA 2022 grossed 1.5bn — not in income from games sold, but from additional content sold in games. What was that sum 10 years ago? Zero?

4. There is constant legal developments, that’s my home field.

For example, one of the core principles of the EU is free movement of gods and services. Like Apple can’t sell iPhones for one price in Latvia and another in Germany. Geo blocking e-commerce sites is of course totally banned.

Recently the EU looked at the big movie producers. They found that their practice of like letting someone sell streamable movies only in a restricted geographical area to be totally in violation with these rules. The studio behind like Avatar 2 can for example not enter into an agreement with a streaming service in Croatia and let it stream Avatar 2, but only in Croatia, anymore.

Can the PL sell the TV rights to like Croatia, but forbid the Croatian TV channel streaming it from selling subscriptions to someone in like the Nordics paying a premium for it? It’s only a matter of time this carry over to football. Let’s say someone in Latvia acquires the PL rights for 6 years. How long before a natural born “disturber” buys those rights “for Latvia” and brings in a crew of UK experts and commentators and starts targeting the UK market? Sounds extreme right? Check page 4, 5 and 6 of Man Utd’s annual report containing “risk factors”. The Board of Manchester United plc is extremely careful to describe this very development in the EU law and how it can affect our club — to avoid getting sued by investors.

That might of course be negative in a sense. But — once you get to that stage, it’s only a matter of time before football starts doing away with middle hands (the “TV channels”). That is a positive. And nothing is more valuable for a football club like Man Utd if we could start selling the rights to our own home games. That was largely what the Super League was about. Brentford‘s TV rights are worth what, 75% of our TV rights? In reality, our TV rights are worth like 75x Brentford’s.

 

[Red Dreams]

Is it though? If the club was sold for, say 7 billion, I am not sure it would even be on the top 20 list of the biggest mergers and acquisitions so far in 2022.

We are talking of football clubs.

 

[Slysi17]

Is there a risk that the Glazers will sell the assets separately, such as the land around the stadium?
Also, on Apple, given they're a listed company, doesn't that make a takeover process more lengthy? Would they need some sort of approval from their shareholders?

Apple is not buying Manchester United. I am not sure why people keep mentioning Apple when it isn't going to happen.

 

[GoonerInPeace]

You know him personally, do you? Comparing side by side his life is a touch more successful than most, what with his famous successful wife, famous successful kids, multi top club country captaining playing career, multi million pound business interests, MLS team ownership and all. He can’t be all that dim - doesn’t say much for the rest of us. Maybe don’t believe everything you read on the news, eh?

If you think his kids are successful, I peg you as a big fan of the Kardashians

 

[Nytram Shakes]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

I think there is also a question of how much money is there anyway, we spent what we did this summer by borrowing money and increasing the debt. We can't do that every year. The spending will need to reigned in next summer what ever happens.

 

[Pickle85]

1. This is a good article on the value of football club that describes that exact same things you are mentioning.
https://www.buyoutsinsider.com/theyre-in-the-big-leagues-now/

There are so many aspects to the return of an investment in Man Utd that are unknown, at the same time, the underlying value — like the “brand”/followers are there, unique, consistent, extremely rare etc — so the risk is definitely limited.

2. But if we look at like what have driven value for the Glazers, the aspect of ‘sports washing’ has definitely driven up the prices. If you don’t have the Taksin Shinawatras, the Abramovics, the City owners — we wouldn’t be discussing 5-6bn for United. Who foresaw that 17 years ago?

Another thing is the geographical growth of football.
*The PL rights in the US is worth 27m per PL team per year.
*The PL rights for Denmark, Norway, Sweden and Finland is worth 20m per PL team per year.
*The entire Asia and Pacific area is worth 15m per year.

There are 4.3bn people living in the APAC area, 160 times more than in the Nordics. The growth potential speak for itself.

3. It’s not easy to figure out what the metaverse is, there have been a lot of talk about NFTs and football, etc etc etc.

But like FIFA 2022 grossed 1.5bn — not in income from games sold, but from additional content sold in games. What was that sum 10 years ago? Zero?

4. There is constant legal developments, that’s my home field.

For example, one of the core principles of the EU is free movement of gods and services. Like Apple can’t sell iPhones for one price in Latvia and another in Germany. Geo blocking e-commerce sites is of course totally banned.

Recently the EU looked at the big movie producers. They found that their practice of like letting someone sell streamable movies only in a restricted geographical area to be totally in violation with these rules. The studio behind like Avatar 2 can for example not enter into an agreement with a streaming service in Croatia and let it stream Avatar 2, but only in Croatia, anymore.

Can the PL sell the TV rights to like Croatia, but forbid the Croatian TV channel streaming it from selling subscriptions to someone in like the Nordics paying a premium for it? It’s only a matter of time this carry over to football. Let’s say someone in Latvia acquires the PL rights for 6 years. How long before a natural born “disturber” buys those rights “for Latvia” and brings in a crew of UK experts and commentators and starts targeting the UK market? Sounds extreme right? Check page 4, 5 and 6 of Man Utd’s annual report containing “risk factors”. The Board of Manchester United plc is extremely careful to describe this very development in the EU law and how it can affect our club — to avoid getting sued by investors.

That might of course be negative in a sense. But — once you get to that stage, it’s only a matter of time before football starts doing away with middle hands (the “TV channels”). That is a positive. And nothing is more valuable for a football club like Man Utd if we could start selling the rights to our own home games. That was largely what the Super League was about. Brentford‘s TV rights are worth what, 75% of our TV rights? In reality, our TV rights are worth like 75x Brentford’s.

Interesting post this, thanks.

 

[AlPistacho]

If Glazers are willing to sell, would that mean no money for transfers for Jan / Summer ?

Sometimes yes. But I think with the glazers no. Because 1) United being in the CL next year increases our value 2) players are assets on the balance sheet. So if anything might mean they refuse to sell (hypothetical) Harry Maguire in Jan, even if a bid comes in and ETH says yeah let him go.

 

[Cantonagotmehere]

The stock continues to rise, seems like a good sign.

 

[Adam-Utd]

The stock continues to rise, seems like a good sign.

Can't see them backing out now. 1 thing they like more than money, is more money.

 

[Seven Seas Sardines]

Can't see them backing out now. 1 thing they like more than money, is more money.

Pretty sure they'll be charged for stock manipulation if they decide not to sell. Furthermore the fan backlash will be worse than the ESL..

 

[AlPistacho]

The stock continues to rise, seems like a good sign.

Could be retail investors buying.

 

[AlPistacho]

Pretty sure they'll be charged for stock manipulation if they decide not to sell. Furthermore the fan backlash will be worse than the ESL..

Their statement was very clear. They are looking at options, including the sale, and it might lead to nothing. So they have protected themselves also even if they said they were selling sales collapse all the time. My fear is that they are looking for, or we end up with, a Barca ‘levers’ type deal.

The stocks on the NYSE are not their own shares, they are shares owned by retail investors, financial institutions, hedge funds etc. So it’s not as if they are profiting directly from the stocks that are getting bought at 20-60% increase

 

[Infra-red]

Pretty sure they'll be charged for stock manipulation if they decide not to sell. Furthermore the fan backlash will be worse than the ESL..

They haven't said they will sell, only that they are looking for investment and that this might result in a partial (or perhaps full) sale - that statement was also heavily caveated to cover them even if nothing happens at all.

It is entirely possible that this whole process ends with some or all of the Glazers still remaining at the club.

 

[arthurka]

1. This is a good article on the value of football club that describes that exact same things you are mentioning.
https://www.buyoutsinsider.com/theyre-in-the-big-leagues-now/

There are so many aspects to the return of an investment in Man Utd that are unknown, at the same time, the underlying value — like the “brand”/followers are there, unique, consistent, extremely rare etc — so the risk is definitely limited.

2. But if we look at like what have driven value for the Glazers, the aspect of ‘sports washing’ has definitely driven up the prices. If you don’t have the Taksin Shinawatras, the Abramovics, the City owners — we wouldn’t be discussing 5-6bn for United. Who foresaw that 17 years ago?

Another thing is the geographical growth of football.
*The PL rights in the US is worth 27m per PL team per year.
*The PL rights for Denmark, Norway, Sweden and Finland is worth 20m per PL team per year.
*The entire Asia and Pacific area is worth 15m per year.

There are 4.3bn people living in the APAC area, 160 times more than in the Nordics. The growth potential speak for itself.

3. It’s not easy to figure out what the metaverse is, there have been a lot of talk about NFTs and football, etc etc etc.

But like FIFA 2022 grossed 1.5bn — not in income from games sold, but from additional content sold in games. What was that sum 10 years ago? Zero?

4. There is constant legal developments, that’s my home field.

For example, one of the core principles of the EU is free movement of gods and services. Like Apple can’t sell iPhones for one price in Latvia and another in Germany. Geo blocking e-commerce sites is of course totally banned.

Recently the EU looked at the big movie producers. They found that their practice of like letting someone sell streamable movies only in a restricted geographical area to be totally in violation with these rules. The studio behind like Avatar 2 can for example not enter into an agreement with a streaming service in Croatia and let it stream Avatar 2, but only in Croatia, anymore.

Can the PL sell the TV rights to like Croatia, but forbid the Croatian TV channel streaming it from selling subscriptions to someone in like the Nordics paying a premium for it? It’s only a matter of time this carry over to football. Let’s say someone in Latvia acquires the PL rights for 6 years. How long before a natural born “disturber” buys those rights “for Latvia” and brings in a crew of UK experts and commentators and starts targeting the UK market? Sounds extreme right? Check page 4, 5 and 6 of Man Utd’s annual report containing “risk factors”. The Board of Manchester United plc is extremely careful to describe this very development in the EU law and how it can affect our club — to avoid getting sued by investors.

That might of course be negative in a sense. But — once you get to that stage, it’s only a matter of time before football starts doing away with middle hands (the “TV channels”). That is a positive. And nothing is more valuable for a football club like Man Utd if we could start selling the rights to our own home games. That was largely what the Super League was about. Brentford‘s TV rights are worth what, 75% of our TV rights? In reality, our TV rights are worth like 75x Brentford’s.

Much appreciated, thanks.

 

[Seven Seas Sardines]

Their statement was very clear. They are looking at options, including the sale, and it might lead to nothing. So they have protected themselves also even if they said they were selling sales collapse all the time. My fear is that they are looking for, or we end up with, a Barca ‘levers’ type deal.

The stocks on the NYSE are not their own shares, they are shares owned by retail investors, financial institutions, hedge funds etc. So it’s not as if they are profiting directly from the stocks that are getting bought at 20-60% increase

They haven't said they will sell, only that they are looking for investment and that this might result in a partial (or perhaps full) sale - that statement was also heavily caveated to cover them even if nothing happens at all.

It is entirely possible that this whole process ends with some or all of the Glazers still remaining at the club.

That might be fine and dandy in legalese. Fans won't accept yet another smokescreen though, demonstrations will be out of this world if Joel keeps clinging on to power.

 

[Coops73]

We’re at that boring stage aren’t we. You know the one where we’ve all gone through the breaking news from reputable sources, excitement, speculation, hope, people talking like they have inside knowledge and then……feck all for ages.

It’s like the transfer forum in jan or summer but much, much more important.

 

[AlPistacho]

That might be fine and dandy in legalese. Fans won't accept yet another smokescreen though, demonstrations will be out of this world if Joel keeps clinging on to power.

100% the protests will be wild. But nothing like an Mbappe type signing after they’ve pimped out 80% of United’s rights for the next 50 years to quieten 60% of fans for a bit.

 

[stw2022]

The protests have always been shit and ineffective. Aside from the Liverpool match postponement that was only after actually impressive protests elsewhere by other fans protesting against the proposed super league what the feck has the anti-Glazer protests ever done, besides some songs and the time a few hundred people turned up fifteen minutes late for a match.

Sorry it's possible to think the Glazer's have run this club into the ground AND think the constant backslapping of those who have run an almost entirely innocuous 'protest' for the last fifteen years is strange.

"The protests are going to be huge" translates to 'we're thinking of changing a lyric'. People need to be disabused of this idea the protests have been anything but ineffective meek and mild pap. Even the present situation is everything to do with the current financial realities than Joel noticing 759 empty seats at the start of a match be probably wasn't even at.

The protests achieved very little besides a resolve to convince everyone they've been witnessing something akin to a civil rights rebellion. In truth the most impact has been on the bedsheets of Britain, festooned with slogans by three people in balaclavas somewhere near an airport

It feels like an Emperor's new clothes affair. Everyone talking about this highly effective campaign that seems to have still peaked at that time Beckham picked up the scarf

 

[Tarrou]

The protests have always been shit and ineffective. Aside from the Liverpool match postponement that was only after actually impressive protests elsewhere by other fans protesting against the proposed super league what the feck has the anti-Glazer protests ever done, besides some songs and the time a few hundred people turned up fifteen minutes late for a match.

Sorry it's possible to think the Glazer's have run this club into the ground AND think the constant backslapping of those who have run an almost entirely innocuous 'protest' for the last fifteen years is strange.

"The protests are going to be huge" translates to 'we're thinking of changing a lyric'. People need to be disabused of this idea the protests have been anything but ineffective meek and mild pap. Even the present situation is everything to do with the current financial realities than Joel noticing 759 empty seats at the start of a match be probably wasn't even at.

The protests achieved very little besides a resolve to convince everyone they've been witnessing something akin to a civil rights rebellion. In truth the most impact has been on the bedsheets of Britain, festooned with slogans by three people in balaclavas somewhere near an airport

protests do weaken their position though

with new investors, with advertisers etc.. it will 100% be coming up in talks

so it isn't impossible that it's been a factor in their decision to sell, albeit a rather minor one compared to the others

 

[ROFLUTION]

Jim O'Neill who led the failed Red Knights takeover is saying that no sensible/rational person will buy the club due to the price being out of reach for normal human beings or even normal wealthy human beings.

He’s basically predicting an oligarch/state owned future that neither Liverpool or Manchester United can compete with.

He’s not wrong - the UK political leaders should really grow some balls here and do something so the two arguably biggest cultural institutions doesnt become either sportswashing tools or oligarch play toys.

 

[Lastwolf]

Sure if you buy with the intent of selling in 10 years time with the plan to increase the club value significantly.
Feels like a gamble though. With a new stadium possibly needed and who knows what else is in disrepair behind the scenes.
Who will buy it next If your price tag is 12 billion?
Seems like we will be bought by a state whatever happens next. If not this time around, then in 10 -15 years.
Unless the price growth of football skyrockets again.

Doesn't really matter who will buy it until you sell, value is value.

While it's unlikely we'll see a 6xtimes multiplier again in the next twenty years, as the price tag then would be 30billion, which would be nuts, but with inflation etc might not be that unreasonable to see 10+ Billion in twenty years time (some are arguing that the total package to buy, pay debts and commit to facility revamps, now, would be around that). Entire repayment of the investment is unlikely without a resale of the asset, if they repaid themselves at a rate similar-ish to the current debt repayments, it would take over 100years but it's not that kind of investment, it's not a mortgage to buy your own home.

 

[strandty]

 

[cyberman]

It’s like I’m living a dream