Who can afford Manchester United?

If you owned Manchester United, how much money would you think you’d need to invest to get the club back to the top? We all know that the stadium is crying out for investment. If you want to be really radical and build a whole new ground on or near the current site, you’re looking at a cool billion (Spurs’ stadium cost £1.2bn), even a more modest upgrade would probably cost half a billion. Carrington needs work, even if Ronaldo’s short second spell at United famously led to the pool being upgraded. Let’s say £50m. And then there’s the squad. Things on the pitch are on an upward trend, but any supporter can tell you where the gaps are; a top-class striker, a full back, a centre half with more to offer than Maquire or Lindelof, the list goes on. All in all, it’s not unreasonable to see United needing over £1bn to reverse the years of decline.

The need for future investment is a key consideration for any of the consortia, hedge funds, billionaires or sovereign wealth funds who may thinking of phoning up Raine Group, the bankers appointed to consider bids. Because buying Manchester United involves two big numbers; how much to offer to persuade the Glazers to sell and how much the new owners will need to invest to keep up or catch up with the deep pocketed clubs that now litter English and European football. Jurgen Klopp may often grate with United fans but he had a point when he observed that the clubs run on the traditional self-financing model of spending what you earn “can’t compete”. Any new owner knows that they’ll need more cash than just that needed to buy the club.

Given that both the cost of buying United and the required investment are so big, the pool of potential buyers is inevitably small. The sale of Chelsea (a process also run by Raine Group) gives us some clues as to what sort of people we are talking about. The runners-up to Todd Boehly’s successful consortium, which was backed by US private equity house Clearlake Capital, included a group led by Josh Harris and David Blitzer, two other US private equity tycoons, as well as US sports investors Stephen Pagliuca and Larry Tanenbaum. More familiar to United supporters, Mancunian Sir Jim Ratcliffe made a late tilt at Chelsea too. Back in 2010, the “Red Knights” consortium led by Gatley-born, former Goldman Sachs Chief Economist, Jim (now Lord) O’Neill tried to persuade the Glazers to sell. Jim O’Neill was interestingly ambiguous about whether he would be interested in another attempt when interviewed by the BBC after news of the Glazers’ potential sale came through.

Then we have the new wave of money in world football, state and quasi-state players. Only Manchester United could knock a World Cup off the back pages, but you may have noticed the small, understated bit of sports-washing currently taking place in Qatar. The Qataris of course own PSG, in the process destroying the competitive balance of French football. On the other side of Manchester, the Abu Dhabi state continue their “project” at City. Most Newcastle fans seem delighted to have human rights abusing, terrorism exporting, journalist murdering Saudi Arabia as their owners. We know the Saudis have approached the Glazers in the past too of course. With these three nations having already bought clubs, the list of other similar buyers shrinks. Politics makes Russian money toxic, and Chinese ownership highly implausible.

Why do people want to own football clubs? I’ve already mentioned sports-washing, but ever since the Glazer takeover in 2005, the main motivation for those wanting a piece of Premier League football has been far more straightforward. Money. Whether it’s Hicks and Gillett and then subsequently Fenway Group at Liverpool, Kroenke at Arsenal or the three Chinese who are the joint owners of Wolves, the motivation is not personal image or an Ambramovich style thirst for glory. These owners believe they can make money from the ever-rising value of English and other European clubs. In some ways this optimism looks misplaced given the rise of the state backed owners. Who would want to operate in an industry where your competitors have almost no limit to the funds they can deploy against you? It was these concerns that led the Glazers and Fenway to push for the European Super League after all. But so far, as Chelsea’s sale for £2.5bn shows the valuations just keep on growing.

Taking these factors together; the need to have very significant initial capital plus funds to invest in Old Trafford and the squad, the shrinking number of sovereign wealth funds who could or would want to buy United, and the wide spread belief that Premier League clubs can only get more valuable, everything points to financial, probably US investors heading the list to buy Manchester United. We can only hope it works out better this time around.