In X years when they DO sell the club, in that scenario, they will get a much smaller % from the sale. So now they’d get 69% of £5bn. If they only have 50% or so in X years, they’ll need to sell the club for considerably more when all the facilities need considerably more work and the squad is considerably worse.If we start with the premise that none of the Glazers like football or care about being owners of a football club and they are only in this for the money (a pretty fair assumption), then the only reason they would want to stick around would be because they think the club will be worth more in the years to come, than it is now and therefore they hang on for a bigger payday further down the road (while taking a chunk of money for the stadium/themselves from a minority investor in the interim).
50% of £8bn > 69% £5bnIn X years when they DO sell the club, in that scenario, they will get a much smaller % from the sale. So now they’d get 69% of £5bn. If they only have 50% or so in X years, they’ll need to sell the club for considerably more when all the facilities need considerably more work and the squad is considerably worse.
I can’t see how they get more money from the club there
Hedge funds see Glazers defaulting and taking the asset on the cheap... Making easy money, but not from growth.The involvement of hedge funds would suggest that some pretty keen business minds see potential for growth.
Either way, it would make minority investment a possibility.Hedge funds see Glazers defaulting and taking the asset on the cheap... Making easy money, but not from growth.
The club needs added investment/capex to grow. Even after a minority sale, that money has to come from somewhere.Either way, it would make minority investment a possibility.
It could also be a lot less too as they could be forced to sell more of their shares in the future to prevent the club from defaulting on its interest payments where by the VC might own as much as 51% of the voting shares forcing a hostile takeover!50% of £8bn > 69% £5bn
I've assumed that all bids up until now have been for the EV (market cap + net debt). Otherwise they are valuing the club at something like £8bn already, which is mad.It could also be a lot less too as they could be forced to sell more of their shares in the future to prevent the club from defaulting on its interest payments where by the VC might own as much as 51% of the voting shares forcing a hostile takeover!
People say 69% of £5bn but it’s clear they want £6bn minus the £600m debt for their 69% voting shares and the new owner if SJ would then have to buy the remaining shares for $23 so another £1.2 probably?
SJR has only bid for 69% so it’s fair to assume that SJ is for the same initially
I doubt they can take on any additional debt. They'd surely have already borrowed to fund the stadium refurb, if that was an option open to them.If the Glazers put more onerous debt/debt conditions on the club the price they will be able to sell it eventually will be even less. If you can't pay the debt now how will you be able to pay an even bigger debt later when you have zero revenue generation? Most organisations can just move money around to discharge short term obligations. Glazers have no such assets.
Nominally, yes.50% of £8bn > 69% £5bn
If the club are issuing new shares, then money for OT/Carrington would come from the minority investment. If the Glazers sell their own shares, then the club gets nothing. In that scenario, there probably won't be any infra investment - the Glazers will just leave OT and Carrington as they are. Either way, the club will continue to fund player purchases as it has been doing up until now and the investor gets their ROI on exit.Simple questions!
If we don’t see a full take over who will invest in our squad, our infrastructure or (re)build our stadium and how will it be repaid to that potential investor?
If the Glazers stick around it's because they think their respective shareholdings will be worth more in future than they are now. The club is worth 7 or 8 times what their dad paid for it in 2005 - they'll be hoping that trajectory continues and that there might even be a future spike in value following a streaming rights bonanza and/or ESL.If a new owner invest in the club they off course want full ROI and that means that existing owners stake will decrease. Please can someone show me a realistic calculation that benefit our existing owners and is a better deal than then selling the club for premium value? (please no dream scenario)
How does it sell for that much more?50% of £8bn > 69% £5bn
Why are these names only just coming out. Have they even done any due diligence? Bit late in the day to throw your hat in the ring if you’ve not even studied the books. Not sure I believe any of this yet, other than a ploy to get Ineos and Qatar to raise their bids.Tweet
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You'd think a life long United fan would be reluctant to do that.Then presumably the Qataris go to another PL club, probably Liverpool,
Only the Glazer’s shares are up for sale, and it’s believed they are looking for close to 6Bn for their 69%.In X years when they DO sell the club, in that scenario, they will get a much smaller % from the sale. So now they’d get 69% of £5bn. If they only have 50% or so in X years, they’ll need to sell the club for considerably more when all the facilities need considerably more work and the squad is considerably worse.
I can’t see how they get more money from the club there
I agree with most of that. If I was them, I'd sell. But they might look at how much the value of the club has sky rocketed in the past 15 years and conclude that they can sit idly by, leave the club to spend c. £120m pa on players, hope they can scrape in to a 5th place UCL qualification most years and keep watching the value of their asset grow (in spite of their inaction).How does it sell for that much more?
Many of our best players are about 30 and will need replacing. If the Glazers stay, there won’t be much money to spend on players. The investors won’t fund it for them, why would they
Then presumably the Qataris go to another PL club, probably Liverpool, that’s another team as well as City, Chelsea and Newcastle who will have blank chequebooks and buyers players we can’t
The debts will rise, the stadium will be further behind, the squad will need an overhaul and unlikely to be in the CL (as they should be come this June), further capital investment will be needed. The 2 serious bidders this time won’t be back.
Huge huge risk to take when they can get a huge world record fee now
I would guess that they were the mystery bidders there all along. The reason why their names have suddenly emerged now is surely to drive the price of the final bids up (both minority and full sale).Why are these names only just coming out. Have they even done any due diligence? Bit late in the day to throw your hat in the ring if you’ve not even studied the books. Not sure I believe any of this yet, other than a ploy to get Ineos and Qatar to raise their bids.
I read that it’s 69% of £6bn they wan. So they’d get about £6-700m eachOnly the Glazer’s shares are up for sale, and it’s believed they are looking for close to 6Bn for their 69%.
It’s obviously possible. But I certainly don’t think that would be their preference to a full sale if they get a good price. Chatter is that final full buyout bids will be within 5-10% of what they want and it would be bold to turn it down when they’re at the end of the road at this club in terms of being able to put off capital investment etc.I agree with most of that. If I was them, I'd sell. But they might look at how much the value of the club has sky rocketed in the past 15 years and conclude that they can sit idly by, leave the club to spend c. £120m pa on players, hope they can scrape in to a 5th place UCL qualification most years and keep watching the value of their asset grow (in spite of their inaction).
You may be right - we'll find out soon enough. I think we can all agree that the time for them to go is long overdue. Let's hope they finally clear off.I read that it’s 69% of £6bn they wan. So they’d get about £6-700m each
It’s obviously possible. But I certainly don’t think that would be their preference to a full sale if they get a good price. Chatter is that final full buyout bids will be within 5-10% of what they want and it would be bold to turn it down when they’re at the end of the road at this club in terms of being able to put off capital investment etc.
I don’t argue they’ll definitely sell. I still think it’s 50/50 but if they don’t sell I just think it’ll be because they get too greedy and blow the deal. Not because they choose minority investment
Can definitely agree on that. The fact their model of ownership is still allowed is an embarrassment.You may be right - we'll find out soon enough. I think we can all agree that the time for them to go is long overdue. Let's hope they finally clear off.
Why would the parasites sell some of their shares to give it to the club?They need investment badly to do anything meaningful from here, but even with a minority investment you wonder if they’ll be able to take a dividend again.
I can see a scenario where they take on a billion and fix the training ground and stadium but I’m not sure where that leaves the finances moving forward.
Baring in mind we’re settling a £300m debt this summer.
This makes no sense. What have Raine been doing for the past few weeks if they're only asking this question now?! Haha. Comical.Tweet
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No he is shit at everything, on transfers news and clubs ownerships news, shit all around.The feck? Isn't Delaney fairly reputable? Surely this can't happen.
It's alright it would be a different front man for that bid.You'd think a life long United fan would be reluctant to do that.
Great post. Thanks.It makes sense what you write about the Glazers distinct lack of love for the beautiful game however with interest rates about to spiral and the debt at nearly £1bn, the hedge fund who decides to buys a minority stake with venture capitalist money would demand a significant board presence and have a say in day to day financial runnings.
Let’s play devils advocate and say it happens, If they are buying 20% voting share rights for let’s say 1/5th of the value demanded for voting shares so they want £6bn and will collectively relinquish 20% of voting and shares now giving them a 49.5% stake while the new VC own 20% at £1.2bn.
The VC investing, will have a 7 year plan to get a ROI of at least 20% back on £1.2bn invested so will want £1.5bn back when the club sells for say hypothetically £8bn in 2030.
Here is the realistic obstacles ;
1. The servicing of the debt currently at £600m (forget amortised Transfer debt that’s a completely different line ) currently £20.5m per year and about to rise very quickly. It makes sense that VC will have Accountants and IT number crunchers all over the business, trust me when our £250m per year company was bought by Sun life, we had a meeting every day, just to do forecasts and financial projections. The first thing they will do is try and manage and renegotiate the debt, pay off half so they can apply a 7 year forecast through club projection software program, incorporating p and l to pay off the other half of £300m.
That means the club would need to make a profit of £45m per year that could not be used in buying new players or paying dividends but instead pay off the debt, so they can reduce the liability of the business and be part of a sale which would be ultimately debt free. The interest payment would still be £10m per year to service the debt and now after these decisions, there would only be £900m left of £1.2bn invested for a minority stake.
2. Squad improvements, contrary to popular belief who ever buys us with FSP coming into play we still have to sell to buy, however after the club pays their credit card bill of £200m off, let’s say some of that is revenue generated but £100m is still needed from VC investment, which now decreased to £800m
3. We then go buy Harry Kane, which is £100m upfront no payment plan but the club can amortise the figure over 4 years in their accounts and we agree to another £200m in player transfers, the Glazers will throw the book at transfers just to keep the fans from burning the place down, we will amortise the other signings and offset then against player sales however we might have to pay £40-50m in back payments from the £300m we owe to other clubs, just to keep Uefa off our back. The £800m is now down to £600m.
4. Training Ground upgrade at Carrington , they might spend and build a cheap 7,500-10,000 stadium for women and youth but that’s now highly unlikely as there is not much growth in revenue from this area of the club in their bigoted opinion so they maybe just spend £50m to keep ETH happy and put some modern recovery pods in training complex, rather than £250m Qatar would spend, Capital now reduces to £550m
5. We know already that Glazers and Elliot’s were looking at one stand extension and a cheap stadium refurb, a big screen etc which was recently quoted at £280m so a cheap refurb probably to start next season 23/24 and be completed 24/25 season, all parties would want this as that gives the club an extra 14,000 Season tickets and increase revenue, however no guarantee the roof or the toilets are fixed, who cares the Glazers won’t be turning up anytime soon!
This leave the club with cash funds of probably £250-270m in the bank as working capital however, part of the deal agreed by VC would be no dividend payments unless the club made in excess of £75m of profit one season and all parties must work towards new marketing deals and increasing Turnover, Revenue and Net profit. If the club can reduce the debt quicker, all parties must agree and no dividends can be paid out.
This new partnership would need CL football every season, they would have to win a couple of PL or a CL in the next 7 years and hope that PL clubs can soon stream their own games at 3pm on Saturday for this to work. The club turnover would have to increase to £800m by 2025/26 and at least another £100m of the debt paid off so the club had now reduced debt to £200m.
I can see the appeal because Avram and Joel think they can carry on as usual with someone else’s money because they own the Crown Jewels of soccer clubs, just because their Daddy Malcolm willed it to them!
They are living in dreamland to think that any Venture Capitalists won’t be watching their every decision, sabotaging and contradicting their every move waiting to pounce and show them how a real business vulture or shark acts. I don’t believe the Glazers are that stupid however if they are, you know what, more and more I’m warming to it, because it only ends up one way, them bankrupt and the VC buying the club for peanuts, then selling it to the Arabs in 3 or 4 years for £5-6bn which they could have got this year !
However I suspect it’s more deliberate leaks to the media in order to get a certain SJ to bid £6bn and then it’s over, either way I don’t care anymore and nor should you, as long as we support the team, the manager and we finish the season strongly that’s the most important thing right now not this sideshow that endorsed by the worst owners in football history !
Yeah I think you might be right, however the Glazers clearly only want a sale of £6bn or more so even if this is 69% of that value plus the debt is more like what they actually want would be £4.1bn between the 6 siblings and then the new owners to pay off the debt and pay the other £1.9bn for the other shares should they want to go private like SJ, otherwise they will go with a minority stake in the club, if SJR wants it he’s got to pay £4.1bn to buy out the Glazers and leave the other 31% still invested as he keeps it listed on the New York Stock exchange.I've assumed that all bids up until now have been for the EV (market cap + net debt). Otherwise they are valuing the club at something like £8bn already, which is mad.
"Carlyle Group, which has $376bn in assets under management, has also expressed an interest in investing in the club, according to two people with knowledge of the matter. If Carlyle is involved, a preferred equity deal would be likely, one of the people said."
