Manchester United’s price tag may set ‘landmark’ for football

It’s been roughly a decade since Manchester United FC were the kings of English football, much to the consternation of its fans and schadenfreude of rivals. Yet the lack of recent success may be of little matter to a buyer.

The American Glazer family that owns what’s arguably still England’s biggest club is looking for an investor and might be prepared to sell up. They are in the market for a deal that values Manchester United at about £5 billion ($9 billion), Bloomberg reported in August.

While the owners of fellow English Premier League giant Liverpool FC are also weighing a sale, and rival Chelsea FC only just sold in a £4.25 billion deal, neither brand can compare to Manchester United, according to people involved in football investment.

The club from the north-west of England forged its reputation over decades of triumphs in domestic and European competitions – including glory years under legendary coaches Sir Matt Busby and Sir Alex Ferguson – ensuring its status as a premier brand for buyers.

“This deal has to be at a landmark valuation,” said Adam Sommerfeld, sports investment specialist at London-based Certus Capital Partners. “Clearly this is the leading light of football, probably sport overall in terms of M&A at the moment. Everyone who is anyone is going to be looking at this very seriously.”

Among the names coming up as potential suitors for Manchester United is UK billionaire Jim Ratcliffe, a fan of the club who earlier this year offered to buy Chelsea. Meanwhile, Saudi Arabia’s sports minister, Prince Abdulaziz bin Turki Al-Faisal, told the BBC there was a lot of “interest and appetite” in Manchester United and Liverpool in the kingdom and his government would support a private sector bid. A group led by Saudi Arabia’s wealth fund bought Premier League club Newcastle United FC last year.

‘Clearly this is the leading light of football, probably sport overall in terms of M&A at the moment.’

Adam Sommerfeld, Certus Capital Partners

Competition for Manchester United could be intense, if recent deals involving European football clubs are any guide. Chelsea was eventually sold to a consortium led by US billionaire Todd Boehly after a fierce bidding process run by the US investment bank Raine Group that initially drew more than 250 interested parties.

Manchester United’s fundamentals “justify a premium to clubs sold earlier this year”, analysts at US investment bank Jefferies Financial Group wrote in a research note. Compared with Chelsea, Manchester United has a bigger stadium, wider global reach and generates more revenue.