Now is the right time for the Glazer family to sell Manchester United, says M&A expert
Dr Naaguesh Appadu explains why the Glazers have outlined plans for new investment in the Premier League club.
The Glazer family, which owns a controlling stake in Manchester United Football Club have announced that they are to seek ‘strategic alternatives’ relating to new investment.
Since the controversial takeover in 2005 – mainly funded by loans secured against club assets – the Glazers’ ownership has been subjected to protests by fans and former players. The latest developments follow Fenway Sports Group (FSG) – another US-based owner – and its decision to sell Liverpool.
Dr Naaguesh Appadu, Senior Research Fellow in the Mergers and Acquisitions Research Centre (MARC) at Bayes Business School (formerly Cass), believes there are three main motives behind the Glazers’ decision to put their shares up for sale.
“Manchester United is a globally renowned football club and brand that needs little introduction to global investors, but the Glazer family has not shown an awful lot in 17 years to demonstrate that they’re interested in football,” Dr Appadu said.
“It is obvious that their purchase of the club was motivated by making a profit. However, because they funded the purchase of their shares through loans against the club, it has accumulated significant debts.
“Recent increases in interest rates have added to this, and may well be the final straw for them. This is a pattern I’ve seen in my research of global investment attractiveness.”
In 2021, six Premier League clubs including Manchester United and Liverpool attempted to form a European Super League alongside fellow major clubs, which ultimately fell through.
“The clubs’ failure to succeed with the Super League project will have cost them significant revenues through television rights and investment,” Dr Appadu continued.
“They may have decided at that point that their ability to further inflate profits was becoming limited – especially with Champions League qualification each season no longer an expectation with emergence of other billionaire-owned rivals.
“A third motive comes from recent observations and activity of their rivals. Chelsea was sold to another American, Todd Boehly, in the summer following the seizure of former owner Roman Abramovich’s assets amid the war in Ukraine. The sale of the club attracted a number of potential suiters, which created a bidding war and gave the Glazers a glimpse into the kind of money they could demand for their holding.”
In fact, the Glazer family has acquired the services of the Raine Group – brokers of the Chelsea sale – to oversee the purchase of their own club. Despite the reasons outlined for wanting an exit from football club ownership, Dr Appadu believes the statement of intent to sell is a highly attractive one to the right bidder – provided it is completed in a timely manner.
“The money being ploughed into investment in Premier League football clubs remains on an upward trajectory – as demonstrated by Newcastle United’s takeover by PIF, a Saudi Arabian investment fund, last year.
“A new owner at Manchester United will need to invest a lot of money in the team and facilities, but other clubs like Tottenham Hotspur have shown how matchday revenues can be multiplied with fit-for-purpose hospitality and experiences.
“The Glazers do not have the flair to restructure the club. Recruitment decisions have demonstrated a lack of interest or capability, and the club’s model is stagnant and in need of a refresh.
“However, Chelsea’s takeover in the summer showed how costly any deliberations in the process can be. Because assets were frozen under the ownership of Mr Abramovich, players could not be signed nor merchandise sold. This led to the departures of several key players and staff and loss of revenues.
“The best possible outcome here – for both Manchester United and Liverpool – is for clean, quick sales.”
Dr Appadu teaches a case study of Manchester United’s takeover by the Glazer family on the Bayes MSc Finance programme.