The gap between the reported asking price set by the Glazers for the sale of Manchester United and the theoretical value of the club is "enormous", according to one set of financial experts.
Football Benchmark, who provide in-depth understanding and analysis of the business of football, state that despite the sharp surge in share price following the announcement of the sale, the reported sale price of £5-7billion is still significantly higher than their valuation of the club.
United fans know that despite hearing the news they have waited so long for, there is still a long way to go before any deal can be finalised. A host of names have been linked to take over as the new owners at Old Trafford, yet the rumoured price that the Glazers are holding out for could prove to be a vital stumbling block.
ALSO READ: Why Glazers did not take Manchester United dividend for first time since 2016
Football Benchmark, which uses an enterprise valuation model to rank Europe's biggest clubs every year, currently place United behind Real Madrid, saying "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."
Andrea Sartori, Football Benchmark chief executive, said: "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.
"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old stadium requiring major investment, as well as a training centre that is criticised even by players for being outdated.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 capitalisation is still well below the £3bn mark."
READ MORE:
