Manchester United: Club for sale, come take a peep

MANCHESTER UNITED, once one of the prized assets in world football, is for sale, a move that will gladden the hearts of the club’s many followers, who have been calling for the Glazer family to leave Old Trafford. While some will be rejoicing, others may temper their glee as nobody really knows who has the resources to take United off the hands of hard-nosed business people from the US. United will not be sold cheap, they will not be unloaded at a bargain price.

According to some reports, the Glazers will be looking to receive a figure north of £ 7 billion, although estimates from around the industry suggest the price may be anywhere between £ 4 billion and £ 6 billion. In a crisis-torn world, this limits the possible buyers and may even land United fans with another owner they struggle to love.

Regardless of any figure plucking exercises, it has to be remembered that this is one of the world’s top clubs, one of the most cash generative in the history of the game. Although United have fallen from their 1990s/2000s highs on the field, they remain an institution that will, sooner or later, return to profit on the pitch. They have most of the ingredients in place to reclaim their position as the most valuable club and with 75,000 spectators at every game, they have vast support to call upon. Old Trafford is an iconic stadium, but it is in dire need of modernisation to make it a statement home for Britain’s biggest club once more.

The Glazers may have recognised football may have reached something of a tipping point. It could be the days of milk and honey are not quite coming to an end, but maybe stagnating. A combination of peaked broadcasting fees, the pandemic and its post-crisis economic reality, along with growing pressure around energy, food, the climate and geo-politics, has created a perfect storm that creates a degree of uncertainty about the future. Football may have a period of adjustment that means greater challenges around its economic model. In other words, the price of football clubs may be at its peak, therefore the time to offload an asset might just be now. Chelsea changed hands for £ 4.25 billion, Liverpool are on the market and now United are seeking fresh investment (translated – we want to sell). Three of the Premier League’s big six may have new owners pretty soon.

The attraction of United should not be underestimated, but we are in an age when some sports teams may be “too big to buy”. Chelsea attracted a couple of hundred interested parties, but how many were realistic? It may be a case of lowering expectations on the part of the seller, or be prepared for a waiting game. US investors have shown they have an appetite in Premier League football and no less than nine of the 20 clubs have some form of US investment/ownership. United fans may be hoping that Jim Ratcliffe, the owner of INEOS, rekindles his interest in acquiring a football club or perhaps a vehicle like the failed Red Knights group that included former Goldman Sachs economist Jim O’Neil, comes forward.

The size of the deal makes another middle eastern transaction look more likely, which might not please some of the United hordes. Indeed, Dubai has already been mentioned in early dispatches, but they have one of a number of sovereign wealth funds with the resources to meet the Glazer’s demands. However, as we have seen in the past two years, with the Qatar World Cup and the Saudi Arabian takeover of Newcastle United, middle eastern connections are often accompanied by public disapproval.

Manchester United key financial figures 2012-22

£mRevenuesP&L (pre-tax)WagesNet Debt
2021-22583(150)384515
2020-21494(24)322419
2019-20509(21)284474
2018-1962727332204
2017-1859026296254
2016-1758157264213
2015-1651549232261
2014-15395(4)203255
2013-1443341215275
2012-13363(9)181295

The Glazers didn’t get off to a good start when they arrived, loading debt onto the club after a leveraged buyout-type deal. The club has, apparently, consumed £ 1 billion of cash in servicing that debt while the owners have benefitted from regular dividends. So unhappy was a section of the support that a new club sprung-up in 2005 out of the discontent, FC United of Manchester, a fan-owned club that, at its peak, were attracting 3,500 people per game.

Manchester United have spent heavily in the transfer market, some € 2 billion since 2004-05, but they have made some very poor purchases in that time and their recruitment policy, generally, has left a lot to be desired. Furthermore, their wage bill has been astronomical, £ 384 million in 2021-22, more than double the amount paid in 2012-13.

They also repeated huge mistakes around the succession of Sir Alex Ferguson, and since he retired in 2013, United have won just three trophies. They have been missing from the Champions League four times and their last Premier League title win was in 2013. Neighbours City have won 12 prizes in that timeframe and Chelsea six. The most successful manager since Ferguson has been José Mourinho, who won the UEFA Europa League and EFL Cup in 2017 and had a win rate of 58.33%.

The recent debacle around Cristiano Ronaldo really sums up where United are at the moment, a club of their size and stature should not have been courting veterans in the first place but wasting so much money in the process was both foolhardy and directionless. It is no coincidence they announced it was exploring strategic alternatives to enhance the club’s growth immediately after reaching an agreement to allow Ronaldo to leave with immediate effect. United have to ensure they don’t allow the current malaise to continue because it is all too easy for big names to wander into the wilderness. This is absolutely the wrong time to be cast adrift.

Sunderland are reborn, but there’s a way to go

SUNDERLAND regained Championship status at the end of 2021-22, winning a play-off final at Wembley against Wycombe Wanderers. Since then, there has been some boardroom activity, with the club’s owner, Kyril Louis-Dreyfuss, strengthening his hand by raising his stake to 51%. This may not sound like complete control, but he now has the majority stake in the club, which will give him the freedom he needs to drive his own agenda. His acolyte, Uruguayan senator Juan Sartori, has a 30% holding, so everyone should more or less be singing from the same song sheet.

This is important, because if Sunderland are to get back to the Premier League and rediscover the elixir that returns the north-east to hotbed status, then the club needs direction, a strategy and a vision of how it can be achieved. In 2022-23, the club will be marking 50 years since they last won a trophy, that legendary 1973 FA Cup triumph against the mighty Leeds United. How appropriate would it be for the Black Cats to win a place in the Premier at the end of a landmark campaign?

Take away that shock win in 1973, and there’s scarcely anyone alive who remembers a Sunderland success. Their last league title was secured in 1936 and a year after they won the FA Cup for the first time. Sunderland’s real glory days were in the late 19th and early 20th century, five championships between 1892 and 1913, including the famous “team of all the talents”. In fact, this period was really the north-east’s footballing belle epoch.

Sunderland are part of a small group of clubs that enjoyed their best moments when football had grown out of the industrial revolution – Newcastle United and Aston Villa are also members. These clubs suffered when the inter-war years brought depression and recession to Britain, and needless to say, it was the working class and back-breaking industry that suffered more than most. Sunderland’s crowds went from 25,000 in 1929 to 17,000 in 1933, while Newcastle United saw their attendances fall from 33,000 in 1930 to 20,000 in 1935. Middlesbrough, meanwhile, were drawing 12,000 in 1934, a third down on the 19,000 averaged at Ayresome Park in 1930. Whereas pre-World War One football saw Newcastle United and Sunderland win eight league titles, only two have been won since – 1927 and 1936.

Generations of fans have forgotten what a truly successful Sunderland looks like

Some of this has undoubtedly been attributable to the decline of Britain’s industrial heritage and the over-emphasis on London, and in the case of Sunderland, shipbuilding, which had been so crucial to the town’s growth, declined until the last shipyard closed in the late 1980s. How much of this impacted on the football club is uncertain, but there’s little doubt a poor economic climate in a town or city can be reflected in the performance of a club. There are exceptions, of course, but for a football institution with huge potential support and a pivotal role to play in the city, Sunderland have become one of English football’s great underachievers.

The club has had many false dawns, the term “sleeping giant” has been used so much that generations of fans have forgotten what a successful Sunderland looks like. And yet, their loyalty is undeniable, the recent television documentary, Sunderland ‘til I die, demonstrated just how important the club is to the local 175,000 population. The club has had too many owners in the 21st century, including Ellis Short, Stewart Donald and Bob Murray. Kyril Louis-Dreyfuss, who is part of the famous French family that has business interests in finance, agriculture and shipping, also has a stake in Olympique Marseille.

From a financial perspective, Sunderland’s current position illustrates how much ground they have to make-up on Premier League clubs even at the bottom end of their own food chain. In 2020-21, their revenues totalled just £ 10.7 million, a 63% drop on 2019-20. Since 2017, their income has dropped alarmingly (it was £ 123.5 million in 2016-17) due to two relegations and the pandemic. However, their wage bill of £ 13.4 million represents an astonishing 125% of earnings. Louis-Dreyfuss has prioritised the task of making Sunderland a more sustainable business. Promotion back to the Premier League would transform the club’s finances dramatically.

With Louis-Dreyfuss snapping-up the shares owned by now departed Charlie Methven, any prospect of a crypto-currency driven group acquiring a stake – via the shares of Methven or Stewart Donald – has gone. The local media reported that rumours of a crypto group’s possible involvement “has gone down like a lead balloon with Sunderland fans”. While some may consider the club has dodged a bullet, this has underlined the growing presence of a largely speculative and volatile form of finance gathering momentum in the football world. Louis-Dreyfuss distanced himself from talk of and emphasised any transfer of shares must not compromise the club’s integrity.

The fans will be hoping that the Louis-Dreyfuss regime will bring stability and the chance to build with a longer-term view. In the past decade, Sunderland have employed 12 permanent managers, ranging from Martin O’Neill to current boss Alex Neil. The average tenure has been just 40 games. Neil was appointed in February 2022 and the team has lost just once since he arrived. Again, for the Black Cats to be successful, they need some consistency and solidity in the dugout.

The current team is largely a young squad, with only a couple of players over 30. The leading scorer, Ross Stewart, has earned the nickname, the “Loch Ness Drogba” from Sunderland fans, owing to his style of play. He scored 26 goals last season and won two caps for Scotland. The club has added to its forward power in the summer by signing former Bayern Munich striker Leon Dajaku from Union Berlin. Furthermore, Sunderland have been boosted by Lynden Gooch’s decision to remain at the Stadium of Light. The 26 year-old USA international has impressed since Alex Neil joined the club. Winger Patrick Roberts, who featured in the promotion run-in on a six-month loan, has signed a two-year deal to stay with the club.

The Championship is a highly competitive league and Neil’s team will do well to make a mark in their first season back at that level. They may need a year or two to consolidate and then mount a serious challenge for promotion. Sunderland need to look beyond 2022-23 if they are to transform their status and create real value for their owner.