The world's most expensive sports asset, US PE has made 30 times

The biggest sports club deal in history is about to be born.

At 10pm local time on February 17, it was the bidding deadline set by Manchester United. The Glazer family, the actual controllers of the Premier League's oldest club, are interested in selling Manchester United for at least £6 billion.

Many consortia and venture capital funds are eyeing it. They include capital and venture capital funds from Saudi Arabia, North America, Singapore, etc. In the end, only 2-3 companies will qualify for the "Final Showdown". Some British media predict that the transaction will be completed by the end of April.

There are currently two of the strongest bidders. They are the 92 Foundation of Jassim, the "Prince of Qatar", and the Ineos Group of "Britain's richest man" Ratcliffe.

This "acquisition of the century" is likely to "decide the winner" between these two institutions. Currently, the bidding prices offered by the two are comparable. On February 18, Manchester United officially confirmed that the "Prince of Qatar" had offered the club a purchase offer of about 4.5 billion euros (about 3.999 billion pounds). According to the latest reports in the French media, the offer of the "richest man in Britain" is 4 billion pounds.

In contrast, the "Prince of Qatar" seems inevitable. Jassim vowed to win Manchester United in full. He made it clear that the takeover would be debt-free and take 100% of Manchester United. After that, his foundation will not only invest in the team, but also "throw money" at training centers, stadiums, other infrastructure and the fan community.

The "banknote ability" can really defeat all magic.

US PE has soared 30 times, but Manchester United is 660 million in debt

The biggest winner of this "deal of the century" is the Glazer family, the current actual controller of Manchester United.

The Glazer family bought Manchester United using leverage 18 years ago. In 2005, the Glazer family bought Manchester United worth £790 million for just £270 million, with the rest borrowed. Part of the borrowing came from JPMorgan Chase and partly from Wall Street hedge funds. These borrowings are all high-interest loans, with interest rates up to 16.25% per annum.

Half of these loans were borne by Manchester United, and the other half was taken into Red Football, which the Glazer family set up to buy Manchester United. Manchester United were saddled with £660 million in debt.

In addition, Manchester United will have to pay a lot of additional interest. Interest payments alone amounted to £113 million a year, almost more than a third of the team's revenue that year. Ahead of that, Manchester United are heading for their eighth league title in 11 seasons and still have plenty of cash on their accounts and no external debt.

Although before the Glazer family took over, the Premier League veteran team was doing well. But I have to admit that with the blessing of the Glazer family, the "Red Hawk" Manchester United's monetization ability has been brought to the extreme.

Manchester United in 2005 had an annual turnover of less than £159 million, of which the most profitable game revenue was only £66 million, and the commercial income was only £45 million. In 2019, club revenue jumped to a record £627 million, game revenue almost doubled to £111 million, and commercial revenue increased by 600% to £275 million, which alone exceeds the combined revenue of all Premier League teams except the Premier League BIG6.

With their strong earning power, Manchester United soon paid off all its debts in 2010.

The Glazer family did not stop there, but further treated Manchester United as a "private cash machine". The Glazer family first used Manchester United's £500 million bond to refinance with interest rates of up to 8.5% and a maturity of seven years. Later, Glazer listed some of Manchester United's shares on the New York Stock Exchange and raised another $233 million. Half of that money went into the Glazer family's pockets and half went to pay down debt, bringing United's debt at the time to less than £400 million.

This angered Manchester United fans. Fans believe the Glazer family should put money into team building, not into their own pockets. Thus, the "Red Devil Knights" were born, a coalition spontaneously formed by Manchester United fans to save Manchester United, and they set up the Manchester United Fan Trust through crowdfunding to buy Manchester United back from the Glazer family.

The alliance was established and responded to it. It soon gained a whopping 125,000 fans. In 2010, led by former HSBC chairman Harris, several valuable Manchester bankers, entrepreneurs and barristers formally proposed a £1 billion takeover to the Glazer family in their joint capacity as Manchester United fans.

But for the £1 billion offer, the Glazer family seemed a little disdainful, so they simply ignored it and continued his capital game on their own. Roughly calculated, the Glazer family has made a steady profit of 1.5 billion pounds with interest since they joined Manchester United 18 years ago, and the return rate has exceeded 20 times.

Since Manchester United is so profitable, how can the Glazer family be willing to give up this "fat meat" at this time? Because United's management strategy has deteriorated so badly that the team is not on the right track. It has experienced the retirement of the manager, the departure of the player, the loss of the league championship... All the signs told the Glazer family: It's time to get rid of it.

While Manchester United can still call the price, decisive shot. As a result, the Glazer family's price tag on Manchester United in this deal is as high as £6 billion. Although the buyer offered £4 billion, after a round of haggling, the transaction price is expected to be around £5 billion. If the deal goes through, the Glazer family's investment in Manchester United would have made £4.8 billion, a return of more than 30 times compared to the original £270 million.

Manchester United will also become the world's most expensive sports asset.

For love, the Qatari prince "banknote ability" saved Manchester United

When it comes to the most likely bidder for Manchester United this time, it is none other than the Qatari consortium.

The reason is simple, there is money. Prince Jassim, Qatar's royal family, who made the acquisition to Manchester United, is currently chairman of the board of Qatar Islamic Bank (QIB) and previously served on the board of Credit Suisse.

Prince Jassim, as a die-hard Manchester United fan, is bound to use his "banknote ability" to generate electricity for love. He promised to "not borrow, divide money, not leverage", rely 100% on his own funds to buy Manchester United, and will not touch the leverage that fans have heard. In the future, all profits generated by the club will not be dividended, 100% will remain in the 92 Foundation and the club, and all the money earned from football will be returned to football.

Jassim said he didn't buy Manchester United in order to make money, and the only reason for doing so was that he was a United fan and wanted to lead United back to the top.

The Qatari prince will use the "92 Fund" to complete the acquisition. The reason why the fund was named "Fund 92" is also behind Jassim's love for Manchester United. "92" not only represents the "Class of 92" of Manchester United's golden generation of youth training such as David Beckham and Giggs, but also in 1992, Jassim, who just turned 10, became a die-hard Manchester United fan that year.

Although the Qatari prince is determined to win Manchester United, there are also some doubts in the market. Long before the Qatari consortium bought Manchester United, the majority shareholder behind France's Paris Saint-Germain club was the Qatar Sports Fund (QSI), which is controlled by the Qatari royal family. Coupled with this Manchester United, the Qatari royal family will indirectly have two European giants. To some extent, there is a potential risk of manipulation of the league, for which UEFA has even received many objections.

Small obstacles do not seem to dampen the enthusiasm of the Qatari prince. Because UEFA has given the green light to the Qatari consortium. As long as the Qatar Sports Fund (QSI) does not directly lead the acquisition, and the two clubs Manchester United and Paris Saint-Germain are independently managed in the future, and there is no cooperation, UEFA will not block the acquisition of the Qatari consortium.

What's more, the majority of Manchester United fans also like this rich and direct money-giving tycoon. On the one hand, Manchester United can have a lot of money to buy players in the future. According to market rumours, Manchester United will face Chelsea in the summer window for Serie A's strongest centre-forward Osmayne. 'Osmayne's $150 million is difficult for the Glazer family's Manchester United, but it's easy for the Red Devils of the Qatari consortium. On the other hand, you can also renovate the course. The Qatari consortium has publicly stated that it will continue to invest heavily in refurbishing Old Trafford and Carrington after taking over Manchester United, which amounted to £1.2 billion.

Interestingly, the rich and wayward Qatari royal family bought almost "half of Britain". It is reported that the Qatar Investment Authority (QIA), controlled by the Qatari royal family, has a capital of up to $450 billion, and it has been "frantically sweeping" in the UK very early. In 2019, Qatar was already the largest shareholder of the London Stock Exchange, Barclays, British Airways and Heathrow Airport, as well as the owner of landmarks such as Harrods, The Shard, London Olympic Village and the Ritz. Roughly calculated, Qatar owns more real estate than the Queen and the city transport department combined, and has become the number one landowner in London.

It can be seen that for the local tycoons in the Middle East, it is probably easy to win Manchester United in full. (Text/Zhang Junwen Source/Touzhong.com)