Since being put up for sale, the Glazers have maintained an asking price of £6 billion for Manchester United. However, the massive debt and minimal profits make the value nowhere near the asking price.
Qatar’s Sheikh Jassim Bin Hamad Al Thani and Ineos owner Sir Jim Ratcliffe are the two most prominent parties in the race to take over the club. The Glazers are seeking investment or a full sale, and both parties are willing to take full ownership of the team.
Manchester United financial situation makes takeover plans unfavourable
Football finance expert Kieran Maguire has revealed that the numbers simply don’t add up for Manchester United’s hefty price tag. The club has accumulated a debt of £741 million, while profits for their most recent quarter are only £6.3million.
‘When you look at cash generated by the business it is nowhere near £6bn,’ said Maguire.
‘Last August, the market valued Manchester United at around £2bn. Potentially it is now worth double, but any more and you really should be crossing your fingers. Coming up with a valuation is more art than science.
‘You look at how much cash the business is likely to make in the next 10 years and then you add a couple of magic numbers. I did that with United and, being generous with the predictions, came up with £2.8bn.
‘The only way it would be worth near £6bn would be if you could take control of broadcast rights and sell them yourself. As we saw with Project Big Picture that is not going to happen, so the numbers simply don’t stack up.’
Revenue is down 10% after the club failed to qualify for the Champions League. But, it could improve with their Carabao Cup win, and their impressive run in the Premier League, FA Cup and Europa League.
However, justifying an extra billion pounds from any of the interested parties could take a lot of effort. Or, it could simply result in a failed sale.
