The value of Liverpool and Manchester United is estimated at more than $ 4 billion each, but their valuation is dwarfed by American sports teams, according to Forbes
Experts told Reuters that Middle East investments in European clubs and the collapse of the Super League, which was planned to start in 2021, are the main factors behind the search for two of the most famous football teams in England, Liverpool and Manchester United, for new investors.
The American Glazer family, which owns United, began looking for a new investment or potential sale last year, with Ineos, owned by British billionaire Jim Ratcliffe and a longtime United fan, entering the bidding process.
Liverpool’s owner Fenway Sports Group said it was “considering new shareholders” as the Anfield club struggle to qualify for next season’s lucrative Champions League.
United and Liverpool are two of the most successful teams in English football, but they have only won one title each over the past decade.
The owners are “desperately in need of money” in the face of “unlimited” financial inflows from the Middle East, said Lisa Neruti, director of the Master’s Program in Sports Management at the George Washington University Business School.
“The challenge for everyone who buys the team, whether it is an individual or an investment company, is that they will need to compete against (state-owned) teams such as Manchester City and Newcastle United,” Neruti added.
And she added, “The current owners need to inject money in order to continue paying transfer fees and expenses and salaries. You don’t make money running a sports team, you make it when you sell it.”
“You get a lot of money from the Premier League from broadcasting and sponsorship, but you also have to put a lot of money into maintaining your team,” she explained.
And at a time when major European clubs sought to generate more revenue, United and Liverpool were among the 12 teams that participated in the creation of the Super League away from the European Union for the game in 2021, before the backlash of the fans and government pressure that forced the owners to make a rapid turnaround.
“It is possible that the failure of the proposal (to launch the Super League) and the failure of Premier League clubs to gain greater strength in the management of the league are among the factors influencing,” said Spencer Harris, assistant professor of sports management at the University of Colorado.
Investment from “sovereign countries”
Harris said the sale of Chelsea for $5.2 billion in May to a US consortium led by Todd Polley and Clearlake Capital, as well as investment from sovereign nations, were also factors that prompted the new funding.
European football has become an area for investment by countries and entities from the Middle East since Abu Dhabi United Group for Development and Investment acquired Manchester City in 2008, while Paris Saint-Germain won 8 league titles since its acquisition by Qatar Sports Investments in 2011.
The two clubs eventually reached the final of the Champions League, the pinnacle of European football, for the first time in history and were among the top 5 income-earning clubs in the 2021-2022 season.
The acquisition of Newcastle United by the Saudi Public Investment Fund has also changed its fortunes as the team currently occupies third place in the English Premier League and reached the semi-finals of the League Cup
this season. Newcastle has not won a major trophy in more than 50 years.
Neil Joyce, CEO and co-founder of the CLV Group, said: “Qatar invested in Paris Saint-Germain and succeeded in forming the dream team by including Lionel Messi, Neymar and Kylian Mbappe.”
He continued, “The current owners of Liverpool and United do not have the financial resources to compete and invest at the level of the rest of the clubs.”
Investment revenue
Joyce also believes that the owners are looking to benefit from the global reach of their clubs and generate significant returns from these investments.
The Glazer family bought Manchester United for 790 million pounds ($978.65 million) in 2005, while PSG acquired Liverpool in a deal worth 300 million pounds ($370 million) in 2010.
Both clubs are now valued at more than $4 billion each, but their valuation is dwarfed by American sports teams, according to Forbes.
Joyce stressed that “there is an increasing demand from American direct investment companies, as well as some Middle Eastern investments that have entered the world of football throughout Europe during the past few years.”
He concluded, “There is a general perception that the English Premier League teams – and the two largest teams in particular – do not have sufficient capital relatively compared to the American Football League teams, which have been the standard of measurement for a long time.”
