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By Sir Hardly Anyone
Football.London has an article on line which tells us that the challenge for Arsenal to win the league has just got a lot harder because Manchester United are getting a new pair of eyes and a decent whack of cash as well.
What they are reporting in a rather roundabout manner, with phraseology such as “there looks set to be new footballing operations at Old Trafford” is that “Reports suggest that United will undergo a vote to decide whether [Jim[ Ratcliffe’s proposal of around £1.5billion ($1.8bn) for a 25 per cent stake is accepted.” , Ratcliffe owns FC Lausanne-Sport, and OGC Nice.
That apparently implies that the value of Manchester United is around £6billion and would, they say, give Ratcliffe “a large say in the sporting decisions at the club as well as a view to being the majority shareholder in the future.”
Now that last comment is pure speculation – it has not been announced how much say in sporting decisions, if any, Ratcliffe would get. And they don’t give us much in the way of background about Ratcliffe.
But it is often reported that around six months ago the Sunday Times Rich List quoted him as being worth around £26.5 billion. So he is still a bit of a way behind Gopi Hinduja who is reckoned to be worth £35bn. He sold onions and potatoes with his brother, but of late seems to have been buying up Swiss banks.
However back to Jim. With a residency for tax purposes in Monaco, that means that Mr Ratcliffe will need to spend fewer than 16 days in the UK a year to avoid paying tax. So it’s a board meetings-only job then. And quite possibly some of those will be by zoom.
But now the Daily Mirror’s on line service (owned and operated by the same people as Football London) tell us that “Arsenal issues give Man Utd fans reason to be wary of Sir Jim Ratcliffe investment.” For they add that “joint ownership is rarely a success in football” with the danger of “different factions pulling in different directions.”
That may or may not be true, but the key point here is that the £1.5 billion he is said to be forking out (give or take a bit of loose change) will go to the Glazer family. That family will still have control, and will go on taking their dividends out of the club, because, well, that is how they structured the finances: the Glazers take their dividends irrespective of whether the club makes a profit or a loss. The only thing that matters is whether there is cash in the bank. And if there isn’t then the dividend sits in the club as a debt owed to the shareholders. A nice trick if you can pull it off.
Anyway, in the last financial year, £33.6m was paid in dividends to the Glazer family, and I think one or two other lesser beneficiaries. And indeed that marked Manchester United out once more – and we must admit it was a good season for them, as they won the League Cup. Their first trophy in six years which have included two seasons of coming sixth in the league – hence their playing in the Europa this season.
But here’s the twist. Manchester United are the only Premier League club to pay a dividend, and indeed one or two fans have been a spot uppity about that paying of divis, when the club wasn’t winning things.
Interestingly Manchester United made around £30m more than initially expected in its last tax year through reducing the cost of its player wages bill. I can’t imagine that went down well as the additional money was taken by the shareholders as their reward for… well, not winning anything.
Now there are some who think that Ratcliffe thinks that the ground (known within Untold as “Very”, as in “Very old Trafford” – not very funny but it keeps us going) needs a facelift and the team needs investment. But then how does he achieve that with a minority holding in a company that guarantees the other shareholders a payout every year?
There was another story saying that Sheikh Jassim was trying to buy the club but the Glazers put the price up, to reflect the fact that selling the club would lose them their incomes, so that didn’t work.
Certainly at Arsenal, having just the Kroenke family running the show has worked. They took over in 2011, but didn’t get full ownership until 2018, and it was after this that the money into the club started to flow. Chelsea and Newcastle have also both found new owners in the past couple of years, and that hasn’t worked perfectly in each case.
Newcastle were bumping along the bottom as the previous owner just waited for the right bid to come in so they could hardly have done worse, but Chelsea… well, they prove that new money doesn’t always work.
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