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Manchester United's American owners, the Glazer family, are set to finalise a $33 per share deal with Jim Ratcliffe that will see the British billionaire acquire a 25% stake in the English soccer club. The deal will bring to an end a year-long sale process. The Glazer family announced last November that they were exploring "strategic alternatives" for the club, including a possible sale and were open to fresh investment. Ratcliffe's offer represents a premium of 79.1% to the stock's Thursday closing price of $18.43, valuing the Old Trafford club at about $5.4bn excluding debt. While the deal will not see the back of the Glazers, who are deeply unpopular with the fans of the 20-times English soccer champions, it will result in major changes to the way the club is run. The deal values Manchester United above Premier League soccer rival Chelsea, which was sold by Russian businessman Roman Abramovich last May for $5.2bn - including debt and investments - to an investment group led by US billionaire Todd Boehly and private equity firm Clearlake Capital Group. #MergersAcquisitionsDivestitures #PrivateEquity #Football #Sports

Jim Ratcliffe is poised to acquire a 25% stake in #ManchesterUnited Plc (NYSE:MANU) in a much-anticipated £1.25 billion deal as early as next week, according to a Sky News report. The transaction, which will see Ratcliffe's Ineos Sports taking two boardroom seats at Old Trafford, includes a $33-a-share tender offer to acquire 25% of the club's listed A-shares and 25% of the B-shares from the club owners, the Glazer family. Ratcliffe intends to invest $300 million (£245 million) into United's ageing infrastructure, with a significant portion of this capital provided in the near term and financed personally by him, thus not adding to Manchester United’s borrowings. The Glazer family, who have controlled Manchester United since 2005, began exploring a sale of the club last year. More at #Proactive #ProactiveInvestors #NYSE #MANU http://ow.ly/Ytes1054BIi

This is a really curious case because the current "owner" (i.e., majority shareholder) of Chelsea FC, Todd Boehly, had nothing to do with the alleged offenses. "Why punish me?" he asks. Well, because a corporation is not the same as its shareholders. It is a nominal entity created to shield the shareholders from liability. Shareholders like this when the corporation suffers a financial loss because their own private wealth is insulated from claims against the corporation. They don't suddenly get to identify with the corporation when it suits them. The bigger question in the Everton, Chelsea, and Man City cases is whether a sporting penalty, applied years after the offences were committed, atones in any way for financial malfeasance. It probably doesn't. Leeds and other clubs relegated instead of Everton are going to sue them. Could Liverpool and Man United sue over the trophies Chelsea and Man City won? Then there is the meta-question of why football demands that its corporate members behave differently from every other industry. This all makes for a great teaching case for anyone interested in corporate accountability. https://lnkd.in/gM4QWBWJ

Manchester United Plc (NYSE:MANU) holds the ability to force Jim Ratcliffe to divest his ownership stake in the club within the first 18 months of finalising the deal, new filings revealed. The conditions required to trigger this provision were not specified. Additionally, for three years following closure of the Ratcliffe deal, any potential sale of the club initiated by the Glazer family, its American owners, must secure a minimum of US$33 per share for Ratcliffe. The above conditions were revealed after it was confirmed Ratcliffe's Ineos would be acquiring a 25% stake at $33 per Man Utd share, valuing the 20-time English champions at around US$6.3 billion, including debt. #NYSE #MANU More at #Proactive #ProactiveInvestors http://ow.ly/fGTV1056YnZ

The greatest humiliation for a football club is bankruptcy. Not the lack of trophies, not losing derbies, or even humiliating scores. The inability to generate revenue over expenses is a major defeat for clubs. Poor financial management has dramatic repercussions for the club. There are clubs that accumulate debts year after year. For example, Manchester United and FC Barcelona are clubs designed to win trophies based on debts. This is no longer the case with United. There are clubs that, despite lower performances, are profitable season after season. For example, Atalanta. Each season, the Italians make a profit, small though it is, but it's a profit. A 3rd or 5th place in Serie A is an achievement for them. When it comes to insolvency, it leads to a moral bankruptcy of the management. The very existence of the club is at risk. Usually, big-money transfers, low sports performance, and the inability to achieve commercial results are the visible causes of insolvency in football. For this reason, care for the club's finances must be a concern for all club employees. Whatever the arguments, supporters can live without trophies, but they cannot live without their club. #football #footballbusiness #footballculture #footballmanagement

Breaking news in the football world! Sir Jim Ratcliffe, a lifelong Manchester United fan, has completed the purchase of a significant stake, taking control of football operations from the Glazers. The deal, valued at $1.65 billion, includes a $200 million initial investment for Old Trafford's infrastructure. Exciting times ahead as Sir Jim looks to reshape the club's future. Stay tuned for updates on this game-changing move! #ManchesterUnited #SirJimRatcliffe #FootballTakeover #GameChanger #GlazersOut #FootballNews #NewsUpdate #OldTraffordRevamp #SportsBusiness #MUFC #NewEra #TheSocialTalks

The rise of US investment in European #football is a common topic of interest and debate in discussions of #footballbusiness. I take a look at some of the reasons behind this investment drive, as well as some of the pitfalls that investors experience, for theCONVERSATION. #finance #investment #sport University of Portsmouth, Business and Law https://lnkd.in/eYu6pxtk

The transaction was finally announced on Christmas Eve, after more than a year of confusion, posturing and indecision on the part of the Glazer family.  Sir Ratcliffe (INEOS) will pay £1.25billion to acquire 25 per cent of Class A shares and 25 per cent of Class B shares, and will be responsible for all sporting operations/decisions whilst the commercial part will remain with the Glazers. The Class B shares, all of which have been owned by the Glazers, have voting rights that are ten times that of that of the Class A shares. Sir Ratcliffe has also committed an additional £237m to fund the improvement of Old Trafford which is far from being a world class stadium for a team of MUFC’s stature. This amount appears to be wholly insufficient and the club will probably require significantly more to get OT up to standard. Contrast this offer with Sheik Jassim’s bid which was  around £5bn for 100% of the club and a development fund of up to £1.7bn (the number the Sheik and his team estimated would make OT a state of the art stadium, including the training facilities etc). These details raise more questions and answers: ·   What is Sir Ratcliffe’s end game? If he wants to take control of the club at some point, the behaviour of the Glazers over the past year should surely be a red flag going forward. Getting them out of the club is to be a long and arduous task; ·   Apart from the emotional attachment of being a lifelong supporter of MUFC, does it make sense to invest in an asset that will be underfunded from the get go? What’s the business motivation here? The £237m will be a band-aid in the greater scheme of things, if Sheik Jassim’s assessment was anywhere close to being accurate. Who/how/when will the shortfall be funded? Just a thought here – true supporters would have wanted the maximum investment for the club. It appears that Sir Ratcliffe’s offer gave the Glazers an alternative to the Sheik’s 100% offer when majority sentiment was to get the Glazers out; ·   Can you truly separate the sporting and commercial aspects in an entity who main business is sport? There will surely be a constant overlap and this will get very messy; The two large shareholders have obvious disparate motives : the controlling Glazers have always been focussed on maximising cash extraction with sporting success barely featuring whilst the Sir Ratcliffe wants MUFC to be restored to its former glory.   Thoughts?

How much would you value Tottenham Hotspur Football Club? Daniel Levy confirmed last week that the Spurs' owners ENIC Group were working with Rothschild & Co to lead "discussions with prospective investors" in a bid over a stake in the EPL club to "capitalise on our long-term potential". He also stated that the club “required a significant increase in its equity base” in order to continue to invest in its teams and “undertake future capital projects". Quick historical reminder: ➡️ ENIC acquired a controlling stake in the Club in 2001 - “ENIC Sports Inc” is owned by ENIC International Limited, which itself is owned by Joe Lewis at 70.6% and Levy at 29.4%. ➡️ Daniel Levy was appointed to the Board in December 2000 and is currently the longest serving Chairman of any Premier League football club. ➡️ In May 2022, the club agreed a capital increase of up to £150m from majority shareholder, ENIC Sports Inc - which was the owners’ first cash injection since 2004. 3 main considerations regarding Tottenham's standalone valuation: ➡️ Tottenham generated revenue of £549.6m in 2022/23 (c.€632m, a +21% increase vs. €523m in 2021/22 and €521m in 2018/19 pre-pandemic). ➡️ They showed a rather impressive 46% wage-to-revenue ratio with operating profit (i.e., EBITDA) increasing to £138.7m (c.€160m) - however, loss after tax increased to £(86.8)m (c.€(100)m). ➡️ Significant CAPEX investments have been made in the Training Centre and new multi-use Tottenham Hotspur Stadium which was completed in 2019 with a 63,000 capacity and massively increased non-football revenue generation - in recent months the stadium has hosted National Football League (NFL), boxing, English Premiership Rugby Union as well as multiple international concerts. How would the EV/revenue multiple compare to recent European football transactions?   ➡️ European football teams traded at an EV/revenue multiple of 2.5x during the 2019-2022 period - 3.8x for transactions which happened in the top 30 teams. ➡️ The most comparable transactions would include: 🔵⚪ Clearlake Capital Group/Todd Boehly acquiring Chelsea Football Club at a 5.7x multiple (£2.5bn) in May 2022. 🔴⚫ RedBird Capital Partners acquiring AC Milan at 4.6x (€1.2bn) in August 2022 and more recently. 🔴⚪ INEOS buying a 25% stake in Manchester United at a reported £4.4bn valuation, which would give a 6.8x multiple based on £648.6m 2022/23 revenue. 🔵🔴 Arctos acquiring a 12.5% stake in Paris Saint-Germain at a €4.25bn reported EV (i.e., 5.6x). ➡️ Investors all believe that there is further room for EV/revenue multiples to grow as European football is now seeing its best teams being sold and acquired at an average multiple close to the level at which US sports franchises were traded in the 2007-2010 period (3.4x on average). Based on comparable multiples, the expected valuation for Tottenham Hotspur Football Club could land somewhere between €3bn and €4.2bn.

I was asked for my thoughts on some of the intricacies of what will no doubt be a complex set of issues. #chelsea #football #footballfinance #sportsbusiness