Read on Twitter
The pressure is building on the Glazers to sell United. Sponsors leaving, protests building, ESL dead in the water and a Government review into football governance is underway. I’ve seen a lot of people speculating as to whether now is the time that they’ll sell the club...
But for me, will the Glazers now sell the club is wrong question. The club has always been for sale under the Glazers. They have no emotional attachment, it is a business venture and they’ll sell when they believe they have achieved maximum value...
So the correct question has always been – how much will the Glazers sell for? The good news is that the figure is probably much lower than it was a month ago, and there is probably more we can do to drive it down to a point where a fan-friendly bid could become possible...
Taking a very basic view of business value, the 3 cornerstones are: 1) current performance 2) potential for upside/growth 3) risk of downside. Now let’s remember that the Glazers supposedly turned down a £3bn bid for the club pre-pandemic...
Existing performance does not support a £3bn valuation. EBITDA is £185m. £3bn would be 16x which is completely unrealistic for a football club – even Man Utd. You might think 4 – 7x, which would be £750m to £1.3bn...
The reason they turned down £3bn (if it got as far as a formal bid) would have been potential for future growth. Simple enough right? It’s why Uber is worth £15bn and has never made a penny in profit. Until a month ago, United had a lot of potential for growth...
Create a new competition and take more of the TV money, more blockbuster games to drive bigger audiences with the new fans in the expanding markets of China, US, India etc...
Remove the risk of poor performance on the pitch impacting income and probably - in time - leave the domestic leagues behind and grow the ESL into a worldwide endeavour...
By taking away the competitiveness to qualify for the competition, you can start to regulate wages with a cap and take that power away from the players. Remember 52% of United’s revenue is spent on wages and most of that is on players...
If all the top clubs are working together, the players can’t play them off against each other in the same way. It’ll be the only game in town. All that upside/potential growth has been taken away from them in less than a month. As that drops so does the value of the club...
And then there’s the risk of downside. Deliveroo recently floated and the shares dropped 30% on day one, mostly due to risk around governance and whether their gig-economy workers would get full employment rights...
The Glazers are now weaker with UEFA, weaker with the Premier League, weaker in the press and weaker with the fans. A bigger risk is the Government’s threat of regulation, and that will drag on for a while. Plus all the risks they hoped to eliminate from the ESL still exist...
Probably the biggest risk they have is becoming a toxic brand. Things are very different in 2021 than they were in 2005. Big corporations are obsessed with brand reputation and they won’t want to be associated with the press that United have suffered recently...
The Hut Group will hopefully only be the start of an exodus. Again, the more this happens the more risk it will happen again, and the more the risk grows, the more the value drops. The Glazers are weak right now. Weaker than they’ve ever been since they took over...
These things take on a momentum, and the momentum is downwards. Performance is suffering through COVID, all their planned growth is in the bin and the risk keeps growing...
More sponsors pull out, a slump in Season Ticket sales, continued mass protests on the streets. More risk, less value. We get closer to a point where an unemotional business decision is to cut losses and sell up at a price well beneath £3bn. It’s all profit anyway, right?...
This makes a fan-led/fan-friendly bid a lot more likely. Especially if the value has been tanked by fan action, who would take the club on without making sure they had the fans onside?
So let’s keep up the pressure!
So let’s keep up the pressure!