After signalling they were willing to sell one of the world's biggest clubs this week, the Glazer family will reportedly seek a massive price for the Premier League side -- BusinessPlus.ie takes a look at what Manchester United's valued is built on, with a current market value of $3.1bn or £2.6bn.
Figure otuted in the media of £5bn outstrip the £4.25bn committed by Todd Boehly and the Clearlake Capital Group consortium, between the £2.5bn fee and a further £1.75bn in proposed investment, in taking over United's Premier League rivals Chelsea earlier this year.
On the pitch, United has been a shadow of the club that largely dominated English football under Sir Alex Ferguson in the 1990s and 2000s.
United's last Premier League title came in 2013, and the club is on its fifth permanent manager since the Scot's retirement, regularly missing out on lucrative Champions League qualification, and falling behind perennial contenders such as Manchester City and Liverpool.
The club has unsuccessfully attempted to spend itself out of its prolonged malaise, paying £535.5m in wages (£384m) and amortisation costs related to transfer fees for players (£151.5m) during the 2021-22 financial year, which saw the club recruit the likes of Jadon Sancho, Raphael Varane and the now departed Cristiano Ronaldo.
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Conversely, United recovered just £22m from player sales after disposing of Daniel James and receiving contingent fees and sell-on fees related to former players.
Revenues, which have yet to recover to pre-Covid levels (£627.1m in 2019), totalled £583.2m in the 12 months to June 2022, so United spent 90% of its turnover on players and wages before other operating costs and impairments.
The company has made a loss in four of the past five years, with annual losses rising from £37.6m in 2018 to £115.5m this year, so why do the Glazers think they get over £5bn for a veritable money pit they bought for around a tenth of that price 17 years ago?
Despite the club's poor performances over the past decade, Manchester United claims a worldwide fanbase of 1.1bn between 467m fans, and 635m "followers" who proactively follow United as their second team, watch matches and highlights, and regularly read and talk about the club.
United estimates that 731.7m of that 1.1bn are resident in the Asia-Pacific region, with a further 296.1m in Europe, the Middle East and Africa, and 74m in the Americas, and its customer relationship management database has the details of around 50m people.
"We are one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth," Manchester United said in its 2022 annual report, and that estimated audience equating to more than a fifth of the world's adult population is apparently ripe for further monetisation.
The club has a social media following of 220.8m people after expanding into TikTok and Chinese platforms RED and Sina Weibo. It has also relaunched its website and wholly-owned direct to consumer media offering MUTV, comprising of a pay TV channel, streaming app and archive.
The company estimated that Manchester United games played during the 2021-22 season were watched by a cumulative audience of 2.9bn viewers, or 59.8m per game.
Manchester United generated commercial revenue of £257.8m in 2021-22, including sponsorships of £147.9m, of which £54.1m related to shirt, training kit and training facility sponsorships, and £93.4m came from other global and regional sponsors, as well as £110m in retail, merchandising, apparel and licensing revenue.
The club is seven years into a 10-year kit supply deal with sportswear giant Adidas with a value of £750m, although the total fluctuates depending on team performance. It also has deals with main shirt sponsor TeamViewer (£47m), sleeve sponsor Kohler and training kit sponsor Tezos (£20m).
The company lists 23 global partners in all, including Adidas, TeamViewer, Russian airline Aeroflot, Apollo Tyres and Cadbury owner Mondolez, and its annual report highlights further opportunities in branded financial services products as well as exhibition games and promotional tours.
Broadcasting revenues totalled £214.8m, down from £241.2m in 2019 when the club reached the quarter finals of the Champions League, but nearly two-thirds of that revenue (65.3%) comes from Premier League broadcasting rights, which are shared between the 20 league clubs.
The club brought in a further £110.5m in matchday revenue as crowds returned to Old Trafford for matches, stadium tours, shopping at the adjacent megastore, food and drink, etc.
Following the collapse of the proposed European Super League, which would have bolstered broadcasting revenue and prize money, and with the cost of player transfers permanently distorted by the petro-giants in charge of City, Paris Saint-Germain and Newcastle United, the Glazers have identified now as the time to sell.
Debt of £636.1m as well as the weakening pound sterling, and its effect on the cost of finance (United paid net interest of £62m in 2022 after recovering £13m in 2021) are likely to have prompted the Glazers into action as well.
Following the sale of Chelsea and Fenway Sports Group's decision to put Liverpool on the market, the pool of prospective buyers is only shrinking and, as Ronaldo stated in a recent interview that resulted in his termination, the club requires investment after neglecting its stadium and facilities in recent years.
Photo: An aerial view of Old Trafford stadium after the Premier League match between Manchester United and Arsenal FC in September. (Pic: Michael Regan/Getty Images)
