Taking a fresh look at Sir Jim Ratcliffe’s move to buy a stake in Manchester United, against the backdrop of the world record sale of the LA Lakers.
The deal to invest in Manchester United, for just less than 28 per cent of the business, made many observers question what exactly Ineos and their 72-year-old CEO were getting for their money.
The minority investment valued Man United at around £4.5bn, which was actually considerably higher than most reputable outlets had appraised them at the time.
Forbes, for example, had estimated the club’s enterprise value at closer to £3bn.
That’s a big leap and one which signified that Sir Jim Ratcliffe had more faith in the Red Devils as a business than the analysts, though those in football finance tell you that if the analysts had all the answers then they would be billionaires.
Tottenham Hotspur v Manchester United - UEFA Europa League Final 2025
Photo by Michael Regan – UEFA/UEFA via Getty Images
The Glazer family secured £1.25bn for a minority stake in the business on which they personally have spent next to nothing, and that’s on top of the dividends that they extracted from the club when it was making regular profits.
Now, the club is losing money and the losses are being underwritten by debt and the new minority shareholders.
As well as being a cushy deal for the owners in Florida, it also served the purpose of stress-testing their valuation of the club.
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In turn, that forced the analysts to reconsider how they value a football club. Now, most consultants and agencies score Man United closer to £5bn.
Rank Club Value Revenue (23-24)
1 Real Madrid $6.53 billion $1.13 billion
2 Manchester United $6.09 billion $834 million
3 FC Barcelona $5.71 billion $802 million
4 Liverpool $5.59 billion $773 million
5 Bayern Munich $5.21 billion $827 million
6 Manchester City $5.16 billion $901 million
7 Arsenal $4.49 billion $773 million
8 Paris Saint-Germain $4.26 billion $873 million
9 Tottenham Hotspur $3.68 billion $652 million
10 Chelsea $3.57 billion $590 million
Most valuable football clubs, per Sportico
But to be able to justify that figure, the club must at some point be able to make money not just for new signings, to pay its players and staff, and invest in its commercial infrastructure, but for its shareholders too.
And given that, from August, the Glazers have the right to compel Ratcliffe to sell his stake at a set price of $33 per share if he fails to match any third-party bid that might materialise, the club’s value isn’t just academic. It will have an existential impact on the club and its future ownership.
This week, developments in the United States might influence the price that the Glazers and Ratcliffe might one day receive too.
World-record LA Lakers takeover exposes problems with Man United’s valuation
There is a reason that the Glazers have always been more hands-on on the other side of the Atlantic.
Their NFL franchise, the Tampa Bay Buccaneers, is profitable. It’s a reliable cash cow which, last year generated an operating profit of around £100m.
That’s in contrast to Manchester United, whose losses have reached almost £350m in the last five financial years.
Graph showing Manchester United's pre-tax profit and loss account from 2013-14 to 2023-24
Manchester United profit and loss account over the last 10 years Credit: Adam Williams/United in Focus/GRV Media
The disparity isn’t unique to the Glazers’ portfolio, however. US sports franchises are invariably more lucrative for their owners than their counterparts in European football.
Why? Primarily, it’s down to the way that American sport is set up.
The NFL, NBA, MLB, NHL and MLS are all closed franchise leagues, so there’s no risk of relegation, nor is there a revenue panacea that comes with qualifying for a continental competition one year and falling out of it the next.
What’s more, there are clearly defined cost controls which franchises set in collaboration with each other – that keeps revenue in the sport, as opposed to leading to an inflationary arms race in the wage and transfer market as it has in European football.
Culturally, the two blocs couldn’t be further apart. Premier League shareholder meetings, for example, are highly adversarial. Clubs vote in self-interest, not as a collective. In the US, the Glazers and other team owners cooperate for the benefit of the league as a whole.
Manchester United owners Joel and Avram Glazer converse at a Tampa Bay Buccaneers NFL match
Photo by Julio Aguilar/Getty Images
The aim of the European Super League was to copy this model. That’s why United, Liverpool, Barcelona, Real Madrid and Juventus – who were the main architects of the project – said the Super League would ‘save European football’ financially, though it of course failed due to the righteous indignation of fans.
The lack of a coherent, cooperative governance structure means that, despite the global appeal of Man United, they aren’t anywhere near as valuable as American sports franchises.
New bar set for sports franchise valuation
Case in point – the LA Lakers, home of basketball superstars Luka Doncic and LeBron James, have this week been taken over by Chelsea shareholder Mark Walter for an astonishing £7.5bn.
That is despite having revenue last year of about £380m. High in isolation but, for context, United’s revenue this season – which, you won’t need reminding, has been one of the worst in the club’s history – is projected to be £660m-plus.
In a good season, United would earn double the Lakers’ turnover.
Yes, the upside for the Glazers and Ratcliffe is huge, but for any real value to be created, something structural has to change in English football and wider European game.
As well as their £1.25bn purchase price, Ineos have injected over £300m of their own money since, and they may have to increase their funding before the transfer window closes.
It will be a long, long time before Ratcliffe, who is 72, is able to generate any profit from United.
His only realistic chance is to sell his shares at a markup, but then the same problem of the lack of profitability will materialise to the next owner, and the next, and the next.
For the deal not to be a dud, United need to start making money. The Glazers meanwhile are simply extracting value, not creating it, and it’s hard to see how Ratcliffe hasn’t been played by them.
Expert view – who might be the next owner of Manchester United?
If Ratcliffe is to eventually get out at a profit, he will need a buyer.
Clearly, this is a passion project of his and he is in no hurry, as the plans to build a new 100,000-seater stadium next to Old Trafford illustrate. But one day, he or his successors will want a return on their investment.
“Ratcliffe offered $32 per share, whereas the current share price is $14,” says University of Liverpool football finance lecturer and Price of Football author Kieran Maguire, speaking exclusively to UIF about the profile of buyer that could eventually enter the fray.
Chart showing Manchester United's share price on the New York Stock Exchange, with United in Focus logo
Manchester United share price Credit: Adam Williams/United in Focus/GRV Media
“That hasn’t really moved since the club was listed on the New York Stock Exchange in 2012. We had the speculative peak during the bidding process, but the price has collapsed since.
“From the Glazers’ point of view, they have got to consider their options. They want to maximise the return. There is certainly a drag-along in that Ratcliffe has the right to match any bid – I believe for a period of 18 months.
“Manchester United is a very attractive proposition for anyone that wants to acquire a global brand. The price is a non-issue if we’re talking Middle Eastern money. £5bn and £6bn gets you nothing in the corporate world.
“In terms of that investment, it’s an option rather than a probability. It could be that Ratcliffe chooses to reprioritise. He has said that it he was getting the same degree of abuse that the Glazers get then he would walk away.
“I think people are starting to see through the Ineos approach to management. As a consequence, the enthusiasm from the fans has waned since the transfer of power took place. That’s something they have to deal with.”