Club up for sale

[Hansern]

The Man Utd shares have seen a fall of over 17% this last week as its been reported that the Glazer might not sell and could instead look to a minority investment. The 17 % share fall wiping almost 1 billion $ off the club value.
They received 2 bids but the bidders havent heard anything from the Raine Group that are handling the sale.

 

[Red Bird]

The Man Utd shares have seen a fall of over 17% this last week as its been reported that the Glazer might not sell and could instead look to a minority investment. The 17 % share fall wiping almost 1 billion $ off the club value.
They received 2 bids but the bidders havent heard anything from the Raine Group that are handling the sale.

They only started talking about selling, panickedly in my view, when Liverpool was mentioned as being up for sale.

 

[MomoWASright]

[article]
Liverpool’s owners Fenway Sports Group (FSG) are looking at major media companies as potential investors to take a minority stake in the club, Telegraph Sport understands.

The club’s US ownership group has announced this month that it is examining a partial sale which it is expected to use to fund the next stage in the club’s development in what is likely to be another crucial transfer window this summer. Last May, the US business analysts Forbes valued Liverpool at £3.6 billion and a sale of the stake would give FSG an idea of how the market currently values the club.

FSG declined to comment on potential investors or indeed the sector from which they might come, other than to say it was still in the process of evaluating the suitability of minority partner options. John W Henry, the principal owner at FSG, said last week that the club were “talking with investors” and that there would not be a full sale.
One such contender could be the US media giant Liberty Media, which owns Formula One as well as the Atlanta Braves of Major League Baseball. It was Liberty’s acquisition of Formula One, and assorted subsidiaries from private equity group CVC, finalised in January 2017 at an equity value of €4.4 billion (£3.6 million), that announced it as a global player in major sporting brands. It also owns the SiriusXM radio group in the US. Liberty Media declined to comment on interest in Liverpool or FSG.

Liverpool, under previous ownership, has in the past sold stakes to media companies. In 1999, what was then Granada, one of the regional franchise broadcasters under the auspices of ITV, bought a 9.9 per cent stake in the club for £21 million. Among other things, it brought some expertise to what was then a fairly rudimentary club media operation.

The size of the stake that FSG is prepared to sell is not yet clear. FSG acquired the club for around £300 million in 2011. The sale of Chelsea for £2.5 billion last year has clearly raised expectations among ownership groups. The Glazer family ownership are understood to be asking for around £5 billion for Manchester United, the sale of which is currently moving into its second phase.

All commentary from FSG on the process so far has been for a sale of a stake in the club itself rather than the parent company FSG. However, FSG would look at either option if it was in the interests of raising investment for the club. In March 2021, the group, which also owns the famous Boston Red Sox franchise, of Major League Baseball, among other assets, announced the sale of 10 per cent of FSG to the private investment firm, RedBird.

The deal meant that other investors in Liverpool, including the fabled NBA basketball professional LeBron James, could take a stake in FSG. It also provided the funding for the second stage of Anfield’s long overdue development as overseen by FSG.

Speaking to the Boston Sports Journal this month Henry responded to questions about the sale of Liverpool, which were posed in November. He said: “Will we be in England forever? No. Are we selling LFC? No. Are we talking with investors about LFC? Yes. Will something happen there? I believe so, but it won't be a sale. Have we sold anything in the past 20 plus years?”
Liverpool announced on Tuesday that in its most successful 12 months for generating revenue, profits for the year up to May 31, three days after it played the Champions League final in Paris, were just £7.5 million. The results emphasise just how much investment there has been in the squad – and also in performance related bonuses - with new deals in that period for a range of players including Jordan Henderson and Andy Robertson.

Liverpool’s 2021-22 season propelled them to their highest ever placing of third – from seventh the previous year – in the Deloitte Money League which ranks clubs according to revenue generated. Liverpool had a third run to the Champions League final under Jurgen Klopp, as well as triumphs in the FA Cup and League Cup. Revenue was up 27 per cent from last season to £594 million.
In doing so it overtook Manchester United for the first time in terms of revenue generated – not least because its three cup runs earned £98 million in matchday

[/article]

 

[moron]

Proper gangsters in suits our owners...like it, its like seeing the internal workings of a cunt.

 

[Red Bird]

[article]
Liverpool’s owners Fenway Sports Group (FSG) are looking at major media companies as potential investors to take a minority stake in the club, Telegraph Sport understands.
[/article]

Expect the Glazers to follow suit, then.

 

[bluebell]

Expect the Glazers to follow suit, then.

What would a media company gain if all media deals are done through collective bargaining? Sooner or later the 3pm kick off will be televised, is this where the media company comes in?

[article]
Liverpool Football Club garnering interest from US media giant, reports

Editorial credit: cowardlion credit / Shutterstock.com

Liverpool Football Club and FSG are said to be looking at major media companies as potential investors, according to reports.
Last week, FSG’s principal owner John W Henry confirmed to the Boston Globe that he would be seeking investment for Liverpool, distancing themselves from talks of a potential sale of the club.
Rumours have since circulated on where this investment would come from, with Singapore’s sovereign wealth fund and RedBird Capital, which bought a 10% stake in FSG in 2021, said to be attracted to the idea of a stake in the Premier League club.
According to the Telegraph, however, one interested party could be US media giant Liberty
began life in 1991 as a spin-off from cable television group TCI.
Since then, it has grown into the “world’s most valuable sports empire” according to Forbes, with sporting assets under control worth some £16.8bn.
Included in its sporting assets are the baseball team Atlanta Braves, the Drone Racing League and the auto racing organisation Meyer Shank Racing.
The crown in its jewel, however, is undoubtedly Formula 1, which it acquired in 2017 and is valued at US$17.1bn according to Forbes, purportedly quadruple the price it paid.
Much of F1’s recent boom in popularity has been attributed to the Drive to Survive series on Netflix, which gives viewers access to what goes on in the pits and behind the scenes, which raises questions if a similar tactic will be implemented at Liverpool should they invest.
In 2022, F1 averaged its highest-ever viewers across ESPN’s family of networks and signed a new television deal with the broadcast company worth US$75mln a year, 15 times its previous deal.
The success of F1 since Liberty’s takeover even prompted the Saudi Arabian Sovereign Wealth Fund to bid US$20bn for the motor racing sport, which was swiftly rejected.
[/article]

 

[tombrown]

They will transfer a share or two to LFC TV and proclaim it as media investment

 

[King Binny]

[article]American billionaire Stephen Pagliuca is looking at another Premier League club.

Pagliuca was unsuccessful when he attempted to buy Chelsea in the summer.

But now, per the Financial Times, he is in the race to invest in Liverpool, and will likely hold talks with owners FSG.

He said: "I looked at Liverpool about 15 years ago when they had that situation. I can't talk specifically about any transactions we are working on because of confidentiality agreements but obviously we are aware of those transactions.

"The questions on those transactions in general is what price level do we think is sustainable? Obviously the Chelsea process which received a record price has probably motivated folks to try and monetise clubs that they have owned for a long time, and we are certainly in a period where values have been driven up.

"Anyone who buys a club has to assess the economic opportunity, how much money we have to put in to keep up the quality and what that will cost you. That is what we do in everything we are looking at."[/article]

 

[bluebell]

[article]
Gerry Cardinale, founder of RedBird Capital Partners, the US investment firm that owns 11 per cent of Reds owners FSG as well as controlling stakes in AC Milan and Toulouse, revealed that Gordon, one of Jurgen Klopp’s closest FSG allies, had been considering his position.
Gordon recently transferred responsibility for his day to day role at Liverpool to Reds CEO Billy Hogan, with Gordon placed in charge of the search for a potential minority partner.


Speaking at the Financial Times’ Business of Football Summit, Cardinale said: “Things tend to get a little ahead of the situation.

“I think our partner in Liverpool, Mike Gordon, who is really a visionary and thought leader, is I think looking to retire and there was maybe an opportunity to see if maybe someone could replace him or buy him down.
“I don’t think there was ever a driving desire to sell Liverpool. We would always be opportunistic and this was simply that.

“I think it has been much ado about nothing


[/article]

 

[Farkmaster]

[article]
Gerry Cardinale, founder of RedBird Capital Partners, the US investment firm that owns 11 per cent of Reds owners FSG as well as controlling stakes in AC Milan and Toulouse, revealed that Gordon, one of Jurgen Klopp’s closest FSG allies, had been considering his position.
Gordon recently transferred responsibility for his day to day role at Liverpool to Reds CEO Billy Hogan, with Gordon placed in charge of the search for a potential minority partner.


Speaking at the Financial Times’ Business of Football Summit, Cardinale said: “Things tend to get a little ahead of the situation.

“I think our partner in Liverpool, Mike Gordon, who is really a visionary and thought leader, is I think looking to retire and there was maybe an opportunity to see if maybe someone could replace him or buy him down.
“I don’t think there was ever a driving desire to sell Liverpool. We would always be opportunistic and this was simply that.

“I think it has been much ado about nothing


[/article]

Don't worry everyone, we just throw out the idea that we are selling the whole club, then walk it back via an email to a reporter. We are professionals!

 

[mom]

https://www.bbc.co.uk/sport/football/64897100

Sales pitch. Wow.

 

[Hyena]

I understand there was a sales pitch on Sunday, 5th March, at a venue relatively close to Old Trafford.

Not sure which of the investors was in physical attendance, if any, but it was televised. Certainly enough information available for indicative bids to be revised.

 

[Hansern]

Seems as though there has been reported to be much more interest in Utd then what there ended up being. Two bids and well short of the valuation.
I wonder if the Glazers will do as FSG and ask for investment instead, or if they will sell at a reduced asking price.

 

[Judge Jules]

That might depend on which of the two schools of thought within the Glazer family wins out. If those who want an outright sale get their way they may reduce the price. Not a good look though. What a pity that would be. 😗

 

[Beamrider]

This "sales pitch" is pretty standard in these kinds of process. In reality, there'll be a presentation from management and then a few Q&A sessions - this is a standard part of the due diligence process and quite helpful to potential buyers as they can ask direct questions and also form an opinion of management in a way that they can't when everything is fielded via the merchant banks. It will also allow United to get a steer on the priorities of the potential buyers. There'll also probably be a tour of all the sites so the buyers can get a better idea of the condition of the infrastructure (including the "backstage" areas not accessible to fans on a match day.
The more surprising point in the article is the comment about the data room (basically a web portal with loads of legal, financial, contract documentation) not being fully opened. It's not unusual for a limited amount of information to be provided early on and then more detailed access to be granted after initial bids / narrowing the field down, but what this suggests is that the process is not as far progressed as we might have been led to believe previously.As such, the suggestion that offers to date are just indicative bids seems correct to me.

 

[bluebell]

Qatari offered £4.5bn, Glazers want £6bn

 

[binomial]

😱😱 6bn is mental stuff…is that really what they value the club at

 

[Frogfish]

There HAS to be. Otherwise it will be all sterile and fake and no one will be bothered. Smart owners have to look at “real” fans as an asset, not a problem.

Is that how it is in the USA with their sports franchises? It's going that way and no one gives a shit about the fans. There's always more in the pipeline.

 

[MomoWASright]

They’ve never given a shit about fans. Look at the ridiculous kick off this weekend. Bournemouth away as 12:30. The managers and clubs will say how unfair it is in one breath then sign up to the bumper tv deal in the next which gives all control to broadcasters.

 

[juniormember]

They’ve never given a shit about fans. Look at the ridiculous kick off this weekend. Bournemouth away as 12:30. The managers and clubs will say how unfair it is in one breath then sign up to the bumper tv deal in the next which gives all control to broadcasters.

True for local + loyal match going supporters.
For armchair fans on the other end of the world like me, I absolutely looooove 12:30 kick offs. That’s 21:30 my time which is perfect.
Get pissed, watch the game and then off to bed.

 

[MomoWASright]

True for local + loyal match going supporters.
For armchair fans on the other end of the world like me, I absolutely looooove 12:30 kick offs. That’s 21:30 my time which is perfect.
Get pissed, watch the game and then off to bed.

Younger me would’ve done the same. All day session.

 

[bluebell]

James Pearce is reporting Liverpool is close to getting new investors.
https://www.thisisanfield.com/2023/...vely-well-advanced-deal-possible-this-season/

 

[Red Bird]

Interesting that when the reports of Liverpool’s being up for sale, the shanks were suddenly for sale, too. Now that we’re not, at least fully, for sale, the reports of Man U are now largely confined to The Daily Mail and The United Stand YouTubechannel.

 

[bluebell]

 

[binomial]

FSG knows this is the only way they can get by and times running out so it’s unsurprising.

 

[StevieM]

@Beamrider

How does it work with regard to equity funding - can capital from share sales be ploughed back into the club for transfers?

What does in mean in terms of on going FFP - would the Equity funding be a one off injection, good for cash flow to fund transfers, but would we need to show increased ongoing income to (either from commercial or transfers) to balance things out?

Or does it simply kick the “losses” can down the road while the equity investment is in the review period.

This is all supposing FSG actually want to use Equity funding on transfers.

Hope that makes sense.

 

[Beamrider]

@Beamrider

How does it work with regard to equity funding - can capital from share sales be ploughed back into the club for transfers?

What does in mean in terms of on going FFP - would the Equity funding be a one off injection, good for cash flow to fund transfers, but would we need to show increased ongoing income to (either from commercial or transfers) to balance things out?

Or does it simply kick the “losses” can down the road while the equity investment is in the review period.

This is all supposing FSG actually want to use Equity funding on transfers.

Hope that makes sense.

This is like one of those exam questions which, on the face of it, looks fairly simple but is actually really complex. I’ll try to answer the simple aspects first, ignoring the real-world reality of what would probably happen in a transaction but I can comment on that as well if you would like. Suffice to say that parties working together could find a structure they could both live with (probably more complex than what I’ve suggested below which is just to make things easier to follow, albeit that the end result is not too far fetched).
So let’s say FSG sell a 10% stake for £200m. They keep £50m to cover their US tax bill on that sale and agree to reinvest £150m. The buyer agrees to invest a further £16.66m so that they keep a 90:10 split.
If they put that in now as equity (new shares) it has no FFP impact - it doesn’t create a profit so it doesn’t improve profit and sustainability figures. However, if we do tip over the edge of the break-even target in the next 3 years then we can use it to get us out of jail as FFP allows a small amount of additional losses if covered by equity injection. However, if those losses arise more than 3 years on then it doesn’t help. NB this is under the current rules, not sure if it works under the new ones. So a smarter structure for FFP is to lend the money, interest free, knowing it can be converted to equity at a later date if needed (basically you extend the three-year window for which the equity injection can count). That’s how I would structure it for FFP.
As far as investing the money goes, assuming it all goes into the playing squad, then you basically spread £150m of costs over the 5-year contracts of the players you buy (expenses being wages, amortisation if transfer, agent fees and levies). Simplistically, you add £30m of cost for each of the next 5 years (although in reality pretty much anything could happen if you sell those players or extend contracts etc). So in FFP terms, for the next test, you add £30m losses, £60m the test after that and £90m for the three tests after that (each FFP test is for the previous 3 years in aggregate). And you’re going to need to cover that somehow - increased commercial / media revenues, on-field success (net of huge player bonuses) all help but the only thing that really moves the needle, and is largely under the club’s control, is player sales. Basically, if you sell one or more players at a big profit every three years then it’s all good - those profits cover your losses. This is how we met FFP in the early FSG days (Sterling, Suarez, Coutinho). And that’s what we haven’t been doing, partly because Klopp didn’t want to sell his best players, but also because he didn’t need to because we have been making decent profits, mostly due to media revenue driven by success (especially CL) and some good commercial deals. A year out of the CL next year is going to really hurt on that score.
So the prudent thing to do is to sell one or more of your best players at the top of their form and replace with the closest, youngest version you can get - e.g. last year you’d ideally have sold Salah / Virgil and bought Saka / Gvardiol, but that ship has sailed.
So your last two points basically get to the nub of how it works, except that you can build in flexibility by initially funding with debt. Long-term, you have to learn from the mistake of not refreshing the squad and getting too attached to great players as they get old and become less saleable. Keeping one or two to retirement is fine, but not the ones whose performance will drop off a cliff with age / burnout. Sadly, that’s where we are.
Let me know if you want M&A 101 on how a deal might actually work to accommodate all the above.

 

[StevieM]

This is like one of those exam questions which, on the face of it, looks fairly simple but is actually really complex. I’ll try to answer the simple aspects first, ignoring the real-world reality of what would probably happen in a transaction but I can comment on that as well if you would like. Suffice to say that parties working together could find a structure they could both live with (probably more complex than what I’ve suggested below which is just to make things easier to follow, albeit that the end result is not too far fetched).
So let’s say FSG sell a 10% stake for £200m. They keep £50m to cover their US tax bill on that sale and agree to reinvest £150m. The buyer agrees to invest a further £16.66m so that they keep a 90:10 split.
If they put that in now as equity (new shares) it has no FFP impact - it doesn’t create a profit so it doesn’t improve profit and sustainability figures. However, if we do tip over the edge of the break-even target in the next 3 years then we can use it to get us out of jail as FFP allows a small amount of additional losses if covered by equity injection. However, if those losses arise more than 3 years on then it doesn’t help. NB this is under the current rules, not sure if it works under the new ones. So a smarter structure for FFP is to lend the money, interest free, knowing it can be converted to equity at a later date if needed (basically you extend the three-year window for which the equity injection can count). That’s how I would structure it for FFP.
As far as investing the money goes, assuming it all goes into the playing squad, then you basically spread £150m of costs over the 5-year contracts of the players you buy (expenses being wages, amortisation if transfer, agent fees and levies). Simplistically, you add £30m of cost for each of the next 5 years (although in reality pretty much anything could happen if you sell those players or extend contracts etc). So in FFP terms, for the next test, you add £30m losses, £60m the test after that and £90m for the three tests after that (each FFP test is for the previous 3 years in aggregate). And you’re going to need to cover that somehow - increased commercial / media revenues, on-field success (net of huge player bonuses) all help but the only thing that really moves the needle, and is largely under the club’s control, is player sales. Basically, if you sell one or more players at a big profit every three years then it’s all good - those profits cover your losses. This is how we met FFP in the early FSG days (Sterling, Suarez, Coutinho). And that’s what we haven’t been doing, partly because Klopp didn’t want to sell his best players, but also because he didn’t need to because we have been making decent profits, mostly due to media revenue driven by success (especially CL) and some good commercial deals. A year out of the CL next year is going to really hurt on that score.
So the prudent thing to do is to sell one or more of your best players at the top of their form and replace with the closest, youngest version you can get - e.g. last year you’d ideally have sold Salah / Virgil and bought Saka / Gvardiol, but that ship has sailed.
So your last two points basically get to the nub of how it works, except that you can build in flexibility by initially funding with debt. Long-term, you have to learn from the mistake of not refreshing the squad and getting too attached to great players as they get old and become less saleable. Keeping one or two to retirement is fine, but not the ones whose performance will drop off a cliff with age / burnout. Sadly, that’s where we are.
Let me know if you want M&A 101 on how a deal might actually work to accommodate all the above.

I’m actually fascinated by how it might work and your detailed explanations are fantastic on this issue.

If it hasn’t been said before - thank you - you’re a credit to the site.

I think I follow it - but go ahead and expand on how the deal might work - because I think it’s important to understand… for when we get a barrage of threads demanding “John Henry to open up his wallet”.

 

[Red Bird]

Fascinating stuff @Beamrider . And thanks-1 I’ve always had a vague notion about financing [anything] but that clicked it for me no end.

I now know why Abramovic was extending all those interest-free loans to Chelsea.

 

[peekay]

Fascinating post @Beamrider. Echoing StevieM statement on you being a big credit to this site.