Manchester United could add up to US$2 billion to the club’s market value if they make investments to further monetize their global fan base, finance expert Neil Joyce told Reuters on Thursday.
The club is negotiating granting exclusivity to the consortium led by Qatar’s Sheikh Jassim bin Hamad al-Thani in talks to sell itself for more than US$6 billion, people familiar with the matter said on Thursday.
A $6 billion-plus deal for United would be one of the biggest ever in sport and would value the club at more than 10 times last year’s annual revenue, according to Refinitiv data.
“The future value of Manchester United will be huge,” said Joyce, CEO & co-founder of CLV Group.
“We’ve calculated that there’s anywhere between 150 to 250 million of incremental revenue Manchester United can make through monetising its global fans.
“If you look into how much enterprise value 250 million revenue would generate, you’re talking at least one and a half to 2 billion in additional market cap value.
“So, it would be definitely appetising if you’re a current owner of Manchester United to look into the future. But equally, there needs to be a level of investment in Manchester United to capitalise onto that global opportunity.”
United finished third in the Premier League to secure a spot in the Champions League next season, but face a tough task to revive former glories.
“When you look at the success of Manchester City … it’s really given a sense of what’s possible in terms of both success on the pitch and off the pitch as well,” Joyce said.
“Manchester United has organically been phenomenally successful, leveraging the success and the legacy of the Busby Babes through Sir Alex Ferguson’s tenure at the club … However, now they’re faced with more competitors.
“Manchester City are no longer the noisy neighbours. They are the number one team in Europe, if not the world at the moment as well.”
United have over 650 million fans worldwide, according to market research firm Kantar, and a large number of them have been expecting a change of ownership amid club’s recent lack of trophies.
According to Joyce, United should pay more attention to those who support the club from a distance.
“It used to be Real Madrid, Manchester United and Barcelona, and they’ve got the largest economic opportunities to monetise those global fans,” Joyce added.
“However, with investment comes different philosophy around direct-to-fan or direct-to-consumer strategies that these clubs are starting to pursue.
“So, the opportunity for Manchester United off the pitch now is to … actually engage with fans in global markets who are never going to go to Old Trafford, who aren’t going to spend money at the turnstile, maybe buy jerseys.
“You have to look at digital propositions to monetise against these audiences.”
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