Red Knights downgrade United valuation

The Red Knights have reduced their valuation of Manchester United to just £1 billion.   They give a number of reasons for this downgrade including ‘competition from Manchester City’, an interesting admission of itself, even though City just failed to make the Champions League this season.  

The Red Knights have reduced their valuation of Manchester United to just £1 billion.   They give a number of reasons for this downgrade including ‘competition from Manchester City’, an interesting admission of itself, even though City just failed to make the Champions League this season.  


No doubt they have cogent reasons for arriving at what they think is a fair valuation, but is this going to encourage the Glazers to sell?   Admittedly, the actual offer will include a premium above the £1bn figure to encourage a sale, although how much this will be is unclear.   What is also evident is that putting together an offer with so many investors involved has, not surprisingly, encountered some difficulties.


There is a lot of argument between the two sides about just how well the club is doing which you can really interpret how you wish.   However, the key consideration is why should the Glazers sell?   It is quite evident that the Glazers are aware that they are unpopular with the fans.  Frozen season ticket prices have not placated them, nor will a ‘turnround in the club’s customer relations services.’   Fans are concerned that money is being taken out of the club to service debts at the expense of buying players and performance on the pitch.


The Glazers do not seem to bother too much about what people think of them.    They are hard-nosed businessmen: they are not trying to be ‘Mr Nice Guy’.  They are in the sports franchise business to make money.   Fans’ disquiet has not yet really hit club revenues in a major way.  One way the Glazers can make money is through capital appreciation, but this offer is unlikely to be sufficiently tempting.


So will the Red Knights succeed?   Not in the short run.   The Glazers are not going to accept the first offer that is made.  Success in the medium-term is possible, although I remain unconvinced that it is probable.