Manchester United are for sale ... or are they? Later this week, Raine Group, the New York-based investment bank, will assess offers made to buy, or invest in, the Premier League club after setting a Feb. 17 deadline for confirmed bids to be submitted.
But having announced last November that they were exploring "strategic alternatives" in order to find the best way to "continue building on the club's history of success," United's owners, the Glazer family, still have to clarify whether they are seeking a complete sale or a partner investor to boost the finances at Old Trafford.
Reports also linked wealthy investors from Qatar and Saudi Arabia with a move to buy United, while Jim Ratcliffe, Britain's richest man, has confirmed his intention to buy the club he grew up supporting as a boy. Sources have told ESPN that a number of US-based consortia and investment funds are also interested in United.
The future of the Glazers and Manchester United is a complex one, however, and it is not a simple story of keep or sell. Whether a new owner emerges from this process or the Glazers find a new partner, some big issues must be addressed.
Do the Glazers really want to sell?
This is the question being asked by some of the groups with a potential interest in getting involved in the process with Raine Group. Having bought the club to become sole owners in May 2005, the Glazer family now own 69% of United due to some of the siblings diluting their shareholding in recent years.
Edward, Kevin, Bryan and Avram Glazer and their sister, Darcie Glazer Kassewitz, have all sold various percentages of their stake in United. Joel remains executive co-chairman alongside Avram, while Edward, Kevin, Bryan and Darcie continue to hold positions as directors on the club board.
Sources have told ESPN that Joel is keen to retain his interest in United and take the club forward alongside a new partner, with Avram also prepared to the remain with his brother. The four other Glazer siblings want to pursue a full sale. Neither Joel nor Avram possess the finances to buy out the rest of their family members, so the options available are to either attract a partner investor or sell the club completely.
United's supporters, through a number of anti-Glazer campaigns, have made it clear that they want the American family to sell up and leave Old Trafford, allowing a new owner to take full control.
How much are Manchester United worth?
In real terms, at close of business on the New York Stock Exchange (NYSE) on Feb. 10, Manchester United were valued at $3.88 billion (£3.22 bn). Since going public with their search for either new investment or a sale last November, the Glazers saw United's share price climb from $13.03 to a high of $25.39 on Feb. 9. But what United are worth and what the Glazers can expect to sell the club for are two totally different figures.
As the biggest club in the world's most high-profile domestic league, United have a scarcity value that has led to some reports suggesting the club could be worth as much $10bn on the open market. That would seem an unrealistically high figure, but if you imagine that United is the biggest house in the most exclusive neighbourhood in town, albeit with some work needed to be done to restore it to former glories, then the appeal to potential buyers is obvious.
Premier League rivals Chelsea were sold for £2.5bn ($3.01bn) last May, with the new owners, led by L.A. Dodgers co-owner Todd Boehly, pledging another £1.75bn ($2.11bn) in new investment into the club. The Denver Broncos became the most expensive sports franchise last summer when the team was sold for $4.65bn (£3.86bn). United's global appeal, their huge fan base and commercial power ensure that they are likely to be valued at perhaps twice the figure that Chelsea were sold for, which would also outstrip the Broncos figure as the costliest sports team in the world.
In football terms, only Real Madrid and Barcelona can match the power of United as a global brand, and that is another factor in their ultimate valuation / sale price. This is potentially a once-in-a-lifetime opportunity to buy one of the most recognisable names in world sport, so an eventual sale price between £5-6bn ($6-7.2bn) should not be ruled out.
What are the financial issues at United?
This the big issue that will impact on United's valuation and what the Glazers can expect to walk away with if they end up agreeing a full sale. In short, any new owner will have to throw more than £800 million ($963 m) into a financial black hole before they even start investing in the club.
United's debt, as revealed in their most recently published accounts from November, now stands at £514.9m ($620 m). That debt is a legacy of the Glazers' leveraged takeover in 2005, when the family used what had been a debt-free club as security for their £520m ($6.26m) loan to buy United. In addition to the debt, United also owe £307m ($369m) in unpaid transfer fees. This is not unusual in football, with most transfer instalments paid over the length of a player's contract, but United owe the money nonetheless.
