The Glazer family's asking price for Manchester United is more than double what the club is actually worth, according to a new report from Football Benchmark.
The analysts say that despite a sharp rise in share price following last month's announcement that the club's owners are open to offers, their initial reports suggested that the Glazers have an asking price of around £6billion, which would be more than double the record £2.5bn an American-led consortium paid to purchase Chelsea earlier this year.
But Football Benchmark, despite acknowledging that United are the second most valuable club in the world, claim that the club's present worth is about £2.4bn.
"Can a club like Manchester United FC be really sold at £5-7bn, or even higher, as speculated by some of the press? The gap between the rumoured transaction price and the theoretical value of Manchester United FC appears enormous," Andrea Sartori, the Football Benchmark chief executive, said.
"If we look only at past financial indicators and future expectations for the club and the broader football industry, the answer to the above questions would probably be no.
"Considering asset values, Manchester United's current squad is valued at £770m by Football Benchmark. They possess an iconic, but relatively old stadium requiring major investment, as well as a training centre that is criticised even by players for being outdated. At the same time, their overall brand is still going strong, valued by Brand Finance at GBP £1.09bn.
"However, taking all these factors together, these assets' combined value is still significantly under the speculated transaction price. The stock exchange performance of the club does not lend credence to the high expected price either. Even after a significant jump in the share price following the announcement of a potential sale, the club's market capitalization is still well below the £3bn mark."
Football Benchmark use an enterprise valuation model to rank Europe's biggest clubs every year and they currently place United behind Real Madrid. "This most recent figure [of £2.425bn] is 17 per cent lower than their record EV value of £2.9m, which was registered in 2019."
Their analysis has found that United have made a loss of £230m in the past three years "mostly due to the negative impact of COVID-19" and last season’s accounts show that their net debt has increased to £519.3m. "This is an extra £315m in debt compared to the pre-pandemic season of 2018/2019," the report adds.
On November 22 a United statement said that the club was "commencing a process to explore strategic alternatives… as part of this process, the Board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the company."
