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United worth only £1 billiom?

Writing in The Times, Michael Mortitz argues: 'What would you pay for a £583 million business with few growth prospects and £81 million of ebitda, the slippery benchmark used by buyout firms to value prospective investments? In most industries it would be between ten and fifteen times or, in this case, £800 million to £1.2 billion.'

'If, however, you are putting a football team on the block and you are a group of absentee owners, as is the case with Manchester United and its dividend-rich Glazer siblings, you would encourage rumours that the business is worth £6 billion.'

One of his key arguments is that the club 'is operating in a market where television coverage is saturated and where the era of bidding frenzies is over.'   This overlooks the global revenues that could be obtained from streaming.  There is also capacity for further growth in the US.

Then there is the revenue to be derived from non fungible tokens and the like.   One day fans will wake up to the fact that these are the ultimate rip off, but in the meantime there is money to be made from the gullible.

Just like a house, any asset is worth what someone is prepared to pay for it.   There will be plenty of bidders for United and sealed bids would see the price forced up.

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