• Sunday, February 25, 2024
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BusinessDay

How Manchester United takeover costing club £1m monthly

According to a report in Daily Mail, Manchester United owners, the Glazer family, are reportedly spending £250,000 a week, approximately amounting to £1million in legal and consultancy fees in a bid to sell a 25 per cent stake in the club to British Billionaire Sir Jim Ratcliffe.

A £1.3bn deal for Ratcliffe to acquire an initial 25 per cent stake in the Manchester club is close to completion.

The sales process, which has lasted over one year, is costing the club the equivalent of £1million a month.

United accounts reveal that during the first seven months of the sale process, between November 2022 and June this year, United paid £7m in legal and associated fees.

The Glazer family hired US-based financial advisors Raine Group in 2022 to broker a deal, and the sales advisors have earned more than many first-team players.

In November 2022, the Glazers announced they were considering selling the soccer club Man United. The family, which also owns the NFL’s Tampa Bay Buccaneers, said it would explore all strategic alternatives, including “new investment into the club, a sale or other transaction involving the company,” in a statement.

After six months of negotiations and bids, a resolution is still pending as the Glazers do not have a unified decision on what they will do with the club.

The only publicly known bidders are INEOS founder Jim Ratcliffe and Qatari investor Sheikh Jassim Bin Hamad Al Thani.

Read also Ferguson optimistic of Jim Ratcliffe’s Man United takeover

While Ratcliffe only wanted to purchase a minority stake initially, Sheikh Jassim endeavoured to buy the club outright and debt-free, making him the favourite to oust the Glazer family.

However, after several months and multiple bidding rounds, the Glazers’ £6bn asking price was not met by either party, leading Sheikh Jassim – who went as high as £5bn – to withdraw from the race entirely.

With Sheikh Jassim out of the running for good, Ratcliffe swiftly agreed to a 25% stake worth approximately £1.3bn, which is expected to precede a full takeover in the future.

Ratcliffe’s deal is believed to be on the verge of completion. Still, the Premier League has not yet sanctioned the minority purchase, and according to the Daily Mail, the Glazers are forking out the big bucks to help the process along.

The report claims that the family spend as much as £250,000 a week – approximately £1m a month – on legal and consultancy fees relating to the deal, as shown by the latest club accounts.

The £250,000-a-week package is believed to be more than what several of Man United’s top players earn, with Manchester United captain Bruno Fernandes said to be earning £240,000 per week.

After Ratcliffe’s takeover is finalised, the 71-year-old will take charge of football operations and try to establish his dominance over the team by implementing a number of changes.

The INEOS founder, who also manages Nice, a top team in Ligue 1, will be in charge of major boardroom adjustments, beginning with the departure of CEO Richard Arnold earlier this month.

John Murtough, the director of football, is in danger of losing his position as Ratcliffe reorganises sporting operations and is considering former Liverpool manager Michael Edwards as a potential replacement.

United has struggled for consistency in the early portion of the 2023/24 season, sitting sixth in the Premier League table and at the bottom of their Champions League group.

Twenty years ago, the late Malcolm Glazer paid around £9 million to purchase a 2.9% share in Manchester United, which started the Glazer family’s control of the team.

Less than two years later, when his holding increased to 57%, the American billionaire initiated a formal takeover effort. In 2005, he completed a leveraged buyout of the club for £1.2 billion, gaining 98% of the shares.

The £623 million in debt he used was included in the club’s records during the takeover.

The club owed £792 million by 2010, and the family refinanced the debt using a bond despite criticism from the supporters.