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€4.5 billion catches a lot of attention

Everyone is sick and tired of reading about dollars and cents right? Leveraged Buyouts, Hedge Funds, PIK’s, Bonds, Debts and all the stuff that excites the suits in the City. Unfortunately it’s what football seems to be all about these days. The only things that interests fans however are football matters which is why they read the sports rather the financial pages of a newspaper.

As a member of the Love United, Hate Glazer brigade however, the following Irish Times article written by business journalist Niall Kiely this week caught the attention and as one who has the long term interest of Manchester United at heart found it interesting enough to reproduce here.  It’s worth reading and certainly worth considering it’s conclusion.

Global Glazers have seen internet light – from NIALL KIELY

This week England’s premier soccer league raised some €1.5 billion for its overseas broadcasting rights during 2010-13, more than doubling the previous take and with the rights for Russia still to be sorted.

The overall figure is startling, the individual and regional deals even more so, and it underlines in the most reliable of currencies the remarkable appeal of English football’s showcase division – its games are now broadcast in 211 countries.

The Middle East and North Africa rights went for more than €223 million and were won by a company owned by Abu Dhabi’s royal ruling elite, kith to Manchester City owner Sheikh Mansour. Singapore, an island of fewer than five million people  saw a fierce local rivalry before SingTel paid close to another €223 million.

But there are clouds on every horizon when it comes to the blur-speed media market. Last month the chief executives of the Premier League’s 20 clubs attended a sobering meeting in a London hotel, where they were told that satellite broadcaster BSkyB is under serious pressure. “There wasn’t much effing and blinding” the Sunday Times quoted one meeting source as saying “It was more of a stunned silence”

Ofcom, Britain’s media regulator, will soon order Sky to drastically reduce the wholesale fee it charges rivals to carry its premium channels following a three year investigation of the pay-tv market and complaints from Sky rivals like Virgin, BT and Top-Up. The change will endanger the Premier League’s €667 million annual income from Sky.

It all goes to the heart of the financial model in English soccer, with the running fracas at Manchester United between the Newton Heathites and the owning Glazer family from Florida something of a local farce. Forbes magazine has already listed Manchester United as the most valuable sports brand in the world and United’s own potential earnings are considerable.

So forget how much value the Glazers have already stripped out of their Manchester United investment or the prospects of the Red Knight bidders of transforming a shower of bankers into local heroes, or even the €780 million debt lumped on the club.

Never mind the quality, feel the band-width.The Glazers have seen the internet light and know that as high bandwidth data services are developed over the next short few years, the value of their global brand in a global market populated with followers of the true global game is huge.

How huge? I’d conservatively estimate it to be in excess of €4.5 billion and that’s just for starters!

So there you have it.  Really, no further comment should be required except to suggest that maybe the last line should be read again and deeply considered. After all, an amount of €4.5 billion takes quite a lot of digesting!

The value of  United over the years

1989 offer of £20 million accepted from Ken Knighton but deal fell through

1991 valued at £47 million when floated on the Stock Exchange

1998 offer of £680 million accepted from BSkyB but deal is blocked

2005 sold to Glazers for £790 million

2009 valued at £1.1 billion Forbes magazine

2017 – 2020 projected value £4 billion

Can Manchester United really be valued at that sort of money in the next few years?


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