Slim profits and huge debt make a mockery of Glazers' £6bn price-tag
Manchester United’s £6bn asking price is FAR too high: Slim profits and huge debt of £741m show ‘the numbers simply do not stack up’, insists football finance expert as Glazers hold out for world record takeover bid
- The Glazers’ £6billion valuation of Manchester United doesn’t match the facts
- The Red Devils were valued at £2billion by a financial expert last summer
- Statistics show club revenue was down close to 10 per cent year on year
Manchester United’s latest financial figures illustrate that the Glazers’ reported asking price of £6billion is far too high.
According to football finance expert Kieran Maguire, Thursday’s second quarter results —which reported the club banked a profit of just £6.3million and carry debt of £741m — show ‘the numbers simply do not stack up’.
Revenue was down close to 10 per cent year on year, with the club not competing in the Champions League this season.
United are currently seeking investment or a full sale. As Sportsmail revealed, a Qatari-based group led by Sheik Jassim bin Hamad al-Thani are in the running, with their main rivals coming in the shape of Britain’s richest man, Sir Jim Ratcliffe.
Second bids were lodged last week with the Raine Group, the US bank managing the process, but there is concern that offers of around £5bn will fall short.
The Glazers are open to selling the club but have been hoping for offers in the region of £6bn, which is significantly higher than their actual value
Sir Jim Ratcliffe (L) is being rivalled by Qatari Sheikh Jassim Bin Hamad Al Thani (R) in his bid to takeover Manchester United
‘When you look at cash generated by the business it is nowhere near £6bn,’ said Maguire.
‘Last August, the market valued United at around £2bn. Potentially it is now worth double, but any more and you really should be crossing your fingers. Coming up with a valuation is more art than science.
‘You look at how much cash the business is likely to make in the next 10 years and then you add a couple of magic numbers. I did that with United and, being generous with the predictions, came up with £2.8bn.
‘The only way it would be worth near £6bn would be if you could take control of broadcast rights and sell them yourself. As we saw with Project Big Picture that is not going to happen, so the numbers simply don’t stack up.’
Within the figures, United boasted of a season ticket waiting list of 145,000. They also claim to have a relatively untapped global following of 1.1bn people.
‘If you could turn all those followers into cash then you might have a chance,’ added Maguire.
It was revealed in Thursday’s second quarter results that United’s debt, linked to the Glazers’ leveraged takeover of the club, rose from £477.1m to £535.7m
United’s debt, linked to the Glazers’ leveraged takeover of the club, rose from £477.1m to £535.7m thanks to the strength of the dollar against the pound. On top of that was a £300m credit facility, of which £200m had been used.
There was some good news, with commercial revenues up 22 per cent, driven by a growth in sponsorships.
Sources say the second quarter is expected to be the low point, with money from sponsorships and season ticket sales soon to swell the coffers.
The figures also showed the Glazers have not taken a dividend in the second quarter, having been criticised for pocketing the bulk of a £11m pay-out in June.
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