Kieran Maguire is an Economics, Finance and Accounting Lecturer in the University of Liverpool’s Management School
“Manchester United fans (and according to the club there are 659 million of them worldwide) are used to seeing their club in the news, and the death of owner Malcolm Glazer, the notoriously private American owner, brings further scrutiny.
Power struggle
“The ownership of his shares was passed some time ago to his six children, and anecdotal reports indicate that not all of them were keen on ‘soccer’ but stayed loyal to their father’s wishes, could now result in a power struggle between the siblings as to whether to continue ownership or cash in on their investment.
“The main reason to maintain the investment in United is that it is a cash cow, with revenues of £363 million last year and profits of over £146 million (Liverpool, as a contrast had revenue of £206 million and made a loss of £50 million).
“Those numbers will be substantially boosted this year due to new TV deal and commercial deals, and lower win bonuses for players.
“Arguments for a sale are firstly that United’s struggles on the pitch last season, where they finished seventh and were knocked out of the domestic cup competitions by Swansea and Sunderland, have meant that new coach Louis Van Gaal will realistically have to recruit half a dozen good players. This would cost £150 million plus in today’s bloated transfer market. Where this cash is going to come from is up for debate, as United have debts of nearly £400 million.
Doubled their money
“United’s owners have already doubled their money since acquiring the club in 2005, paying £790 million for the club, which last night was valued at about £1.6 billion on the NYSE.
“It would take a premium to persuade the Glazers to sell, but an offer in excess of £2 billion, and there are foreign interests for whom this is a small sum, could result in some interesting conversations around the Glazer family barbeque this summer.”
