Manchester United fans ought to be careful what they wish for

It’s the news fans of Manchester United have been waiting for: the Glazer family, which holds a controlling stake in this publicly-listed football club of the English Premier League (EPL), is reportedly considering a sale. The foremost question for fans, who have not been happy with how the club has been run in recent times, is whether a new owner would simply put a different face on the same issues that have dogged the Glazer era.

Ever since the late Malcolm Glazer bought the club in 2005 in a leveraged buyout, Manchester United has been mined for dividends and its financial performance aided by the extreme commercialization of the team’s brand internationally. What the team’s fans care about is winning trophies and getting a better stadium. A full or partial sale could mark a fresh start; but the higher the price tag, the more aggressively new owners will have to run the club to justify the outlay.

The current majority owners will seek buyers prepared to pay between £6 billion ($7.2 billon) and £8 billion, The Times newspaper reported. Consultancy firm GlobalData posits a $6 billion price tag, saying a sale could make the club the most expensive sporting institution ever. Even after Manchester United’s New York-listed shares jumped on the prospect of a deal, the market enterprise value is still only $3.2 billion. A transaction at around twice that level would represent an extremely pricy multiple of more than 50 times the current financial year’s expected earnings before interest, tax, depreciation and amortization.

The forced sale of London rival Chelsea Football Club earlier this year set the scene for wave of potential deals. The terms—£2.5 billion for the club plus a £1.8 billion investment commitment—set a benchmark. But Manchester United is a unique asset and would likely fetch a trophy price whenever it changed hands.

The club’s fans will care who it sells to. There was, after all, strong pushback against the possibility of buyout firm Apollo Global Management buying a stake earlier this year.

Some combination of wealthy individuals and private equity money makes most sense in terms of a buyer that would be both palatable to the crowd and able to pay what the Glazers are after.

Even with a consortium ready to buy a controlling stake in Manchester United, an offer would surely rely on a good chunk of debt financing. Commercial partners could bring expertise in marketing and stadium redevelopment, with the latter likely to cost in the region of £1 billion. And it remains possible that the Glazers choose to retain control while bringing in an investment partner to inject funds.

While Manchester United is already a revenue machine, one of the EPL’s most impressive, with annual sales averaging around $740 million over the last five years, its commercial potential may be far from fully realized.

Consider the broader potential, It has the biggest digital footprint of any EPL club, as Rob Wilson of Sheffield Hallam University points out. Expanding and monetizing Manchester United’s global fan base is likely to be the bedrock of the investment case, not least as the EPL gains traction with US television audiences. Football is gaining popularity in the US. For the US-based Fenway Sports Group Holdings, which recently hoisted a for-sale sign above Liverpool Football Club, the Glazers’ announcement of a possible sale cannot be good news. It risks sucking away potential demand, and financing capacity, from its own auction. John Henry’s Fenway appears to have a choice: rush through a Liverpool deal now or wait for its rival to sell. On balance, it may be better to let the Manchester United transaction happen first. That could at least generate a high comparative figure for pricing a Liverpool auction, and allow more time for global debt markets to recover.

Football legend Cristiano Ronaldo parted company with Manchester United this week after criticizing the Glazers for not caring about what happens on the pitch and running it like a marketing club. His comments neatly sum up the dynamics. Crosstown rival Manchester City has dominated the sport in recent years, leaving Manchester United supporters relying on their memories of glory days gone by.

However, new owners will almost certainly also want to run Manchester United as a brand too. That’s its business attraction. But their goal should be to carry the Old Trafford crowd with them. A commercially successful club is also one that should and can afford to invest in the sport. While Manchester United is a business, it’s much more than just a financial asset. Potential buyers will need to convince fans they care about football too.

Chris Hughes is a Bloomberg Opinion columnist covering deals.

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