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Will Dubai-Based Investors Buy Manchester United?
(24 November 2022)

 

Fans of Manchester United have been protesting about the Glazer family since the Americans purchased the club in 2005. The fans - of which there are many in Dubai - weren't happy with the business model that the Glazers used to complete the purchase. Rather than being bought with cash like Manchester City was years later, the Glazers effectively mortgaged Manchester United. The purchase saddled the club with enormous amounts of debt, and those debts are still being paid off today.

Now, after almost twenty years of campaigning, the Glazer family is finally prepared to sell - and there are rumours that a Dubai-based consortium might be in the driving seat to buy. Let’s take a closer look.

What’s happened at Manchester United?

We could write a whole thesis to answer that question, but we'll keep it brief with this simple statement - the club has been in decline for the past decade. When Sir Alex Ferguson retired, it created a gaping void at Old Trafford, and even Jose Mourinho couldn't fill it. The current manager Erik Ten Hag is the club's fifth permanent appointment since the retirement of the legendary Scot and has been entrusted with yet another rebuilding process.

In the meantime, the team is not in the UEFA Champions League this season. That means a loss of prize money, television money and other commercial revenue for the club. Without a domestic title since 2013 and a positive dearth of trophies of any kind in the past five years, the team is achieving less on the pitch than it has since the 1980s. Less success means less money coming in, and that makes Manchester United less viable as an investment. 

Why do fans hate the Glazers?

We've touched on this already, but let's go deeper. Manchester United fans hate the Glazers because they believe that the American family, which has a history of investing in big sports teams, views the club as an investment rather than a sporting endeavour. Time and experience have largely proven them right on that front. The Glazers have sometimes spent big money on players and managers, but they've balanced that by taking money from the club to repay the debts they leveraged against it when they bought it.

By this stage of their ownership, Manchester United has spent more than £500m in interest payments alone, plus a further £450m has gone to the Glazer family in dividends. That’s almost £1bn that’s gone out of the club rather than being spent on players or other improvements. Fans view the owners as greedy and unambitious, uninterested in improving the sporting infrastructure of the club so long as minimum targets are met.

To use a metaphor, the fans think the Glazers have played Manchester United like it's an online slots game at a casino. They've put money in when they have reason to believe they'll get more out of it in return but don't spend when they don't see an advantage in doing so. That's the fundamental principle that underpins every single casino and sister site you’ll ever play slots or spin a roulette wheel at - gamble when there’s an incentive, but don’t when you’re happy with the status quo. It’s a fine theory for casinos, but what works for playing casino games doesn’t work for running a sports team - or, at least, not in the eyes of the Manchester United fans who have spent so many years protesting against the Glazers.

Why sell now?

How long is a piece of string? There are many possible answers to this question. One of them is that the club's slow decline on the playing field has, as we've already said, affected the club's income to such an extent that it can no longer pay the dividends the Glazers are looking for. The departure of star player and commercial cash cow Cristiano Ronaldo has hurt the clubs earning power even further and may have seemed to the Glazers like a good jumping-off point. There are also general economic points to consider. Times are hard in both the United Kingdom and the United States of America, and market conditions aren't favourable. We've already seen the FSG Group decide to sell Liverpool FC in recent weeks, and now the Glazers are following suit.

Another thought is that the Glazers may have been surprised by the sale figure that Chelsea FC achieved when Roman Abramovich was forced to sell it to Todd Boehly. The London club changed hands for the sum of £4.25bn. Manchester United is a far bigger club on a global scale and should, in theory, attract a significantly higher price. It's been reported by some sources that the family is willing to entertain bids of £5bn or higher. That doesn't seem unreasonable and would represent a substantial "last payday" for the Glazers on their way out of the club.

The Dubai connection

If it’s £5bn that the Glazers want, there might be good news for them in Dubai. If reports are to be believed, a Dubai consortium might be preparing a bid of $10.6bn. That’s about £8.8bn based on the current exchange rate. Dubai’s sovereign wealth fund has been linked with a bid for the club in the past, but the Glazers have never previously indicated any interest in selling. However, according to the web publication “Arabian Business,” the potential purchasers this time would be Dubai International Capital. The money is there, the interest is likely to be there too, and there’s every reason why a deal could be done. If it happens, it would be the latest in a series of Middle Eastern investments in the English Premier League, with Newcastle United gaining new Saudi Arabian owners in late 2021.

However, the fact that investors in Dubai are interested in Manchester United does not mean that investors in Dubai will get it. There’s likely to be strong interest from investors in the United States of America, and British billionaire Sir Jim Ratcliffe has spoken many times in the past of his desire to purchase the club he’s supported since he was a child. Bidding will soon begin, so it won’t be long before we know how far people are willing to put their hands in their pockets to own the Red Devils. 

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