When it comes to the Manchester United takeover saga it is often easy to forget that business deals do not happen in isolation – there is a global market, with comparable entities bought and sold often affecting the true value of an asset.
And off the back of the news from Football Insider that a full sale is still the most likely outcome for the Glazer family, that market has already spoken. It has found the Tampa Bay family to be incredibly out of touch with their own situation.
Earlier in the week, The Peoples Person reported on the slump in Man United’s share price on Monday in response to suggestions that Joel and Avram Glazer could maintain control of the club via minority investors such as Carlyle and Elliot.
That episode will no doubt have served as a warning to the club’s current ownership, but right in their own backyard, there is another cause for their concern.
NFL franchise the Washington Commanders were put up for sale by owner Dan Snyder around the same time as the now-infamous ‘strategic alternatives’ statement from the Glazers. As with United, the Commanders’ sale process has been a bumpy ride, fraught with accusations that the seller had no interest in relinquishing control, among other hiccups.
But an agreement was reached between Snyder and Josh Harris last week that will see the Commanders sold for around $6.05bn, pending approval from the NFL.
Why is this important for Man United fans? Well, the Washington Commanders are significantly more valuable than Manchester United – they are more profitable, they carry far less risk, and they have no debt.
In fact, at Forbes’ most recent valuations, the Commanders were said to be worth around $5.56bn, compared to the $4.6bn of United. Harris is overpaying, based on that valuation, by around half a billion dollars – a markup of around 9%.
A similar markup on Manchester United’s valuation would lead to a ‘fair’ overpayment of around $400m, meaning roughly $5bn should be regarded as more than a fair price. Using English money, since that is what bidders Sir Jim Ratcliffe and Sheik Jassim are offering in, that would yield an (inflated) price tag of around £4.02bn.
Given that the enterprise value of Ratcliffe and Al Thani’s bids are reported to be £4.3bn and £4.6bn respectively, the pair are not just offering to overpay – they are offering to overpay on an overpayment.
Any notion that the Glazers could get anywhere near the £6bn price tag they are said to have expected will have died the moment Snyder and Harris shook hands over the Washington Commanders. Their grandstanding via never-ending rounds of bidding and press releases will do nothing to inflate Man United’s price any further.
All that the Glazers are doing at this stage is hampering Manchester United’s ability to plan for next season.
And they no longer have anything to gain by doing it.
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