Manchester United, Liverpool and Paris Saint-Germain are for sale, but the business must face obstacles
European soccer moguls are replacing each other off the pitch. The owners of Manchester United, Liverpool and Paris Saint-Germain will make good money selling all or part of their clubs, but the new owners could earn much less.
The Glazer family, which controls Manchester United, and Liverpool owner Fenway Sports put these flagship clubs up for sale last November, leaving open the possibility of retaining a stake. The Financial Times reported that PSG’s Qatari owners wanted to sell 15% of the French champions.
The sellers are likely to get a good return on their investment, if Chelsea were valued in a recent sale. A consortium led by the American billionaire Todd Boehly bought the London club for 5.7 times the income generated during the year ending in 2021. If we apply this to Manchester United, Liverpool and PSG, whose income was similar that same year according to Deloitte, each of them would be worth nearly £3bn or $3.7bn. It represents a significant increase compared to the price paid by their respective owners: 790 million pounds for Manchester United, 300 million pounds for Liverpool and practically zero for PSG, although the Qataris later injected a lot of money into the Parisian club.
The most likely buyers are American billionaires or highly liquid US venture capital firms. The rise of the dollar against the pound sterling and the euro in recent years means that American trophy hunters can literally buy a lot more for the same price. And perhaps they see European soccer clubs as a cheaper alternative to sports franchises on the domestic market. In recent trades, the NFL’s Denver Broncos and NBA’s Utah Jazz were valued at more than 9 times annual revenue, according to Forbes. The owners of Manchester United, Liverpool and PSG may be hoping that their teams will end up achieving similarly high valuations.
But it’s hard to see that that’s going to happen. The European media and telecommunications groups that have circulated money in soccer for years, such as Sky and BT, no longer seem so willing to pull their wallets. The streaming giants have gotten a little closer, but they’re unlikely to come to the rescue: One of Netflix’s CEOs, Ted Sarandos, recently pointed out that he doesn’t see a way to make streaming live sports profitable.
Plus, clubs are struggling: Manchester United’s stadium needs renovation, and PSG might want a new one, according to Bloomberg. All three clubs suffer from the universal problem of rising player salaries and transfer fees, which eat up most of the revenue. In other words, the potential profit for current owners is perhaps the best that can be achieved.
