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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is senior adviser, Sequoia Heritage
When the most expensive piece of art sold for $450mn at a Christie’s auction in 2017, it took only a few minutes to complete the sale. The auction of another trophy asset, Manchester United, has taken almost a year to dribble towards a partial sale to Ineos founder Sir Jim Ratcliffe at a price that has scant meaning.
United was put on the block in November 2022 by the Glazer family who, according to press reports hoped to receive between $6bn and $8bn. The family’s bankers, after prospecting for buyers around the world could only produce one bidder for the entire business — a Qatari company controlled by Sheikh Jassim bin Hamad al-Thani who, later rather than sooner, realised that he was being made to bid against himself.
The busted auction illustrates the challenge of selling any asset whose value lies more in the eye (or the heart) of the bidder than in underlying cash flows. It also reflects the paucity of buyers for a leading Premier League club.
Many Americans, beyond loose syndicates of private equity firms and hedge funds, are spooked by the madcap nature of the Premier League which, unlike the major US sports leagues, is not a closed shop. In England they have to contend with a system with no salary caps (beyond weakly enforced financial fair play rules), the absence of favourable tax rates and, for the top clubs, the financial consequences of not qualifying for Europe or, worse still, the calamity of relegation.
Prospective US buyers need only look at the example set by their fellow countrymen who overpaid for Chelsea in 2022 and have had an opening year that could have been the plot for a horror film.
Except for the Middle Eastern sovereign funds, which currently own Manchester City and Newcastle United, the managers of other such pools are too sober-minded ever to be tempted to enter the fray, while Chinese buyers have disappeared ever since their government cracked down on expressions of excess.
Ratcliffe, who grew up as a Manchester United supporter, is presumably steeped in the club’s history. He will know that its two runs of glory — one under Sir Matt Busby between 1945 and 1969 and the other under Sir Alex Ferguson between 1986 and 2013 — were both built around a nucleus of players that the club had nurtured from an early age.
Contrast this with the revolving doors of the wilderness years since Ferguson’s retirement, during which United has hired nine managers, won just four trophies and squandered over $1bn in the transfer market on squads which, on occasion, have resembled the footballing equivalent of the Harlem Globetrotters.
More humiliatingly for us longtime United fans, has been the rise of what for many years was the crosstown afterthought, Manchester City. Guided by Pep Guardiola, the best manager of his generation, City has won 15 trophies since 2016, including this year the treble — a clean sweep of FA Cup, Premier League and Champions League first achieved in 1999 by United several years before its new striker, Rasmus Højlund, was even born.
Beyond stocking United with the next generation of players, which will take at least five years to bear fruit, the club’s prospective new minority owner faces another challenge — the stadium. Old Trafford, unfortunately, deserves the first word of its name and no longer exerts appeal for overseas players, many of whom prefer to live in London.
In Manchester, unlike London, it will be impossible to justify any new stadium purely on financial grounds unless the local authorities provide a sweetheart deal that allows for a major real estate development on surrounding land, or elsewhere in the city. But Ratcliffe needs the best stage in Britain if the club is to regain its past lustre — or at least do more than just subsist in the long shadow of Real Madrid.
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