Greenwashing accusations will subside if Manchester United are successful, says Bayes M&A expert
It has been a year since the Manchester United board announced that the club was for sale.
With several potential suitors mentioned, including Sheikh Jassim bin Hamad bin Khalifa Al Thani, it looks increasingly likely that Sir Jim Ratcliffe, Chairman and CEO of the INEOS chemicals group, will succeed in his attempts to acquire a 25 per cent, $1.6 billion minority stake in the club.
However, with billionaire hedge fund manager Leon Cooperman recently purchasing 900,000 shares to give him a minor shareholding, questions remain over how any deal with Ratcliffe will impact operations.
Dr Naaguesh Appadu, Research Fellow at Bayes Business School (formerly Cass) believes that with a minority stake of 25% which carry greater voting rights, Ratcliffe will be able to wield significant power.
“A 25% purchase is not normally a significant amount of control in a company, and the Glazers retaining their majority stake will always give them final say on any decisions,” Dr Appadu said.
“However, the announcement last week that Manchester United CEO Richard Arnold is to leave the club in anticipation of Sir Jim Ratcliffe’s investment is an indication of the sort of power he will be granted to bring in new faces. He may also have an undisclosed personal agreement with the Glazers that allows him to acquire further shares in the football club.
“Ratcliffe’s experience of ownership in football, cycling and sailing teams among others proves he has the business mindset to improve the club and turn around an ailing team.”
The bidding process for the club has seen the motives of both Ratcliffe and Sheikh Jassim questioned, with accusations of greenwashing and sportswashing respectively. Dr Appadu believes this will only truly become an issue if the team’s performances continue to disappoint.
“Although the deal does not – initially, at least – give Ratcliffe a controlling stake, Manchester United fans will take a lot of comfort in the fact that he is a football fan with experience of successfully running another club (OGC Nice in France), in contrast with the Glazers.
“Manchester United is a huge football club compared to Ratcliffe’s other sports businesses so it remains to be seen if he can bring success.
“Previously, fans and activists have believed Ratcliffe’s motivation for buying sports clubs may have been driven towards greenwashing INEOS. Greenwashing refers to the practice of making a company or its products seem environmentally friendly or responsible when, in reality, they may not be.
“Ultimately, football fans will always hold owners accountable if the team is not performing. It all depends on how Ratcliffe and the club move forward following the investment.
“If the football team is not performing in the short run, this will lead to unhappy fans and the question of greenwashing from INEOS will definitely come up which will end up impacting the management.”
All quotes can be attributed to Dr Naaguesh Appadu, Research Fellow at Bayes Business School (formerly Cass).