What does Jim Ratcliffe's investment mean for Man Utd's fate?

Thirteen months after the Glazers launched a “strategic review” of Man Utd, a deal has been completed that will see a dynamic change at the Manchester club. Billionaire Jim Ratcliffe’s INEOS has bought a 25% stake to gain sporting control and is also investing $300 million in the club.

It was not the outright takeover that most fans had hoped for, with the prospect of a "full sale" being floated by the Glazers in a strategic review known as "Project Ruby".

However, the deal would bring fresh impetus to the club, as well as outside investment for the first time under the Glazers.

Lawyers have been working on the details for weeks to ensure a single deal between INEOs and the Glazers is sealed. Ratcliffe is offering to buy the Glazers’ Class A shares, which trade on the New York Stock Exchange, as well as the Glazers’ Class B shares, which have 10 times the voting power, to seal the deal.

Ratcliffe with cyclist Chris Froome and Brailsford (Photo: Getty).

Under the deal, INEOS will have two seats on the Man Utd board. As a result, Dave Brailsford, former director of cycling team Team Sky, now sporting director of NICE, and INEOS Sport CEO Jean-Claude Blanc will join the Man Utd board.

Manchester United staff received a phone call from interim chief executive Patrick Stewart mid-afternoon on Christmas Day (December 24). At his office at Old Trafford, Stewart spoke to club staff to explain the investment as well as the new appointments at Manchester United and the board.

Under the deal, all Glazers siblings will remain at the club and INEOS will have no formal control over sporting decisions, meaning Erik Ten Hag's job is secure for the time being.

What is the deal between INEOS and the Glazers?

Ratcliffe's company, INEOS, has bought a 25% stake in Man Utd in exchange for sporting control. The deal, worth around £1.3 billion ($1.6 billion), means the club's football operations will now be overseen by INEOS, but the Glazers, who have owned the team since 2005, will retain overall responsibility. The Glazers and Class A shareholders will receive $33 per share when they sell their shares to INEOS.

The $300 million cash injection will be used to improve Old Trafford and other facilities, while INEOS will have a decisive vote on any football-related decisions, such as transfer policy or Ten Hag's future.

Man Utd split their shares into Class A and Class B. The Glazers own all the Class B shares, which have 10 times the voting power of the equivalent Class A shares, and are publicly traded on the New York Stock Exchange (NYSE).

Importantly, if the Class B shares are sold, they automatically convert to Class A shares. Previously, members of the Glazer family have sold their Class B shares.

The club has other shareholders who are not members of the Glazers, with Lindsell Train, a British investment management company, owning more than 20% of the class A shares. Other notable investors include Ariel Investments, Eminence Capital and Pentwater Capital Management.

When the Man Utd-INEOS deal was announced, sources confirmed that Ratcliffe had bought 25% of the class A and class B shares. By giving class A shareholders as much participation and incentives as the Glazers, INEOS hopes to reduce the risk of litigation from parties involved in its minority stake.

Is the Glazers era coming to an end?

Man Utd fans always oppose the Glazer family (Photo: Getty).

No, definitely not. The Glazers own around 69% of the club, with the remaining 31% held by non-Glazer family members, the majority of whom are institutional investors.

Ratcliffe initially targeted the Glazers' stake, but in the third round of negotiations, he proposed a deal that would see him own a larger stake of 50%. This would leave Joel and Avram Glazer (the two brothers most interested in Man Utd) as minority shareholders.

The offer continued to change when Sheikh Jassim's Qatari consortium announced it was abandoning its bid to buy Man Utd in October and INEOS said it wanted to buy a 25% stake in the club.

The majority of Man Utd fans have been against the Glazers' ownership since the family bought the club with borrowed money in 2005. Overnight, Man Utd were left with £660m in debt, half of which was paid back to the previous owners and the other half spent on running the club.

Man Utd still has to pay interest regularly every year, in 2006 alone the club had to pay 113 million pounds, which is a large amount compared to the annual revenue of 168 million pounds.

Man Utd's debt over the years under the Glazers (Photo: Athletic).

What did INEOS promise Man Utd?

When INEOS announced its bid for Man Utd in February, the headline it gave was an attempt to "bring Manchester back to Man Utd".

"We will see our role as the long-term custodian of Man Utd on behalf of our fans and the wider community," the company said. "We are ambitious, highly competitive and want to invest in Man Utd to make the club the number one club in the world again."

"We also recognise that football governance in this country is at a crossroads. We want to lead this next chapter, deepening the culture of English football by making Manchester United a beacon for modern, progressive, fan-centric football."

"We want a Man Utd that sticks to its proud history and roots in the north west of England, makes Manchester United again and is clearly focused on winning the Champions League."

That all sounds great but what does it mean for Ratcliffe's plans at Man Utd?

Brailsford (right) will join the board of directors at Man Utd (Photo: Getty).

One of the criticisms levelled at INEOS at Nice (the club they own in France's Ligue 1) is that Ratcliffe and his staff put too much faith in pre-match numbers.

INEOS believe similar structures need only more investment to improve results, but they are unlikely to repeat that mistake at Man Utd as they aim for a full-scale revolution.

Ten Hag's position as manager has come under scrutiny following defeats to Man City and Newcastle, with United's group stage exit from the Champions League meaning the Dutchman's future is not exactly secure under the new ownership structure.

INEOS will take a fresh look at Ten Hag's suitability through an assessment of Man Utd's football operations, despite previously expressing admiration for the work Ten Hag was doing at Old Trafford when INEOS approached to acquire a stake.

In the leadership department, Chief Executive Richard Arnold is no longer in charge and will leave the club at the end of the year. Stewart is taking on the role of Chief Executive but only on an interim basis.

Jean-Claude Blanc, the former Juventus CEO who left his senior role at Paris Saint-Germain last December to oversee the entire INEOS Sport portfolio, is being considered to become Man Utd chief executive.

Brailsford, who was knighted after the London 2012 Olympic and Paralympic Games for taking British cycling to new heights, will play a key role at Man Utd, conducting a review of current operations before making changes to the club.

The future of director of football John Murtough is unclear, with indications suggesting Brailsford are eyeing a sporting director to oversee operations as well as a transfer specialist to fine-tune recruitment.

This is believed to be the end of the line for Murtough and he will leave the club. However, some sources claim that no decision has been made.

Sources close to INEOS have confirmed that Ratcliffe sees improvements to the facilities at Old Trafford and the club's Carrington training ground as essential. The British billionaire's proposal also includes a statement of intent to invest in a women's team at Man Utd.

Ratcliffe wants to improve the infrastructure at Old Trafford (Photo: Getty).

Before the deal was announced, it was reported that Ratcliffe was willing to commit $300 million of his assets to upgrading infrastructure at Man Utd.

While the investment is not enough to completely fix the myriad problems at Old Trafford and Carrington, it is a step in the right direction. Without new investment, it is unlikely that Man Utd will invest on their own.

According to Man Utd's latest financial report released on June 30, the team currently owes more than one billion pounds including net debt, revolving credit facilities and outstanding short-term debts.

Ratcliffe's bid makes no formal statement about Man Utd's debt, and it appears that they are not paying off the club's debt. However, INEOS also guarantees that no "new debt" will be incurred (i.e. no borrowing to buy back Man Utd shares).

Should fans expect an INEOS investment?

INEOS’ investment is certainly welcome, but there are rules the Manchester club must abide by. Despite being partly owned by one of the richest men in Britain, Ratcliffe will still have to abide by Financial Fair Play (FFP) rules.

The Premier League’s FFP rules allow clubs to make losses of £105m over a three-year period, provided those losses are covered by cash injections from owners. If they breach that limit, clubs can be docked points, as Everton have been. That’s not a concern for Man Utd, though.

Man Utd were eliminated from the European Cup after the Champions League group stage (Photo: Getty).

Man Utd were eliminated early in the Champions League this season, which affected their revenue and new investors of Man Utd must really pay attention.

Cost control will be ensured by UEFA's new "squad cost rule", which will restrict clubs from spending more than 70% of their revenue on player and coach wages, but does not include wages for other staff or costs related to player transfers.

That is something to bear in mind, especially at a club with a poor track record of selling players for profit like Man Utd.

Can INEOS own shares in multiple clubs?

The answer is yes, it is not illegal. INEOS only owns 25% of Man Utd and Nice are not playing in Europe this season, so the two clubs do not have a conflict of interest under UEFA rules. So Ratcliffe can continue to defer the thorny questions about conflicts of interest and ownership of multiple European clubs for now.

Under UEFA rules, two clubs with the same ownership cannot participate in the same European Cup tournament. This leads to the possibility of Man Utd and NICE having a conflict of interest if they both receive a place in the Champions League, Europa League or Europa Conference League.

For example, if two clubs receive a place in the Champions League, only one team will be able to participate in the Champions League, the other team will have to participate in the Europa Conference League (because a team from the Champions League can play in the Europa League and UEFA does not allow this to happen).

In the event that two teams receive a place in the Europa League, or Europa Conference League, one team may be banned from European competition.

Nice are doing well in Ligue 1, they are second in the standings after the first leg, 5 points behind leaders Paris Saint Germain. Ligue 1 has 3 places to participate in the Champions League next season, so if they maintain their form, Nice will win a place in the Champions League next season.

In case Man Utd also have a ticket to the Champions League, it is likely that one of the two teams will have to play in the Europa Conference League.

However, there are indications that Ratcliffe is looking to sell the Ligue 1 side for £80m, but that is contingent on INEOS increasing its stake in Man Utd.

Source: https://dantri.com.vn/the-thao/khoan-dau-tu-cua-jim-ratcliffe-co-y-nghia-the-nao-den-so-phan-man-utd-20231226120515783.htm