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The Ratcliffe formula for United

Now that Sir Jim Ratcliffe’s stake in Manchester United is finally confirmed it is clear that he is going to be an active investor giving the club a much needed renewed sense of purpose and direction.

All of Ratcliffe’s businesses, including a fleet of tankers that ferry natural gas across the Atlantic, indicate that he is willing to commit large sums of capital to produce long-term returns rather than to turn a quick penny. By Ineos’ standards Manchester United is a small business, but no one in Ratcliffe’s circle is under any illusion about the time required to restore the club to its glory days.

The brutal history of the union battles he eventually won after purchasing the Grangemouth refineries from BP in 2005 show that he is no stranger to adversity. Given Ratcliffe’s penchant for frugality in his business pursuits, he must be eyeing United’s transfer record, wage bill and overall headcount with a quizzical eye.

 Everything about Ratcliffe suggests he will operate with urgency, trim excess, keep his operating structure as lean as possible and hire leaders to whom, after trust is established, he will give considerable latitude. The recent hire of the former chief of football operations of Manchester City offers a clue that Ratcliffe might try to emulate their crosstown rival’s network of overseas clubs, which have been used to identify young talent.

 For someone accustomed to committing billions to capital projects, the prospect of a revitalised (or new) stadium at Old Trafford will be less daunting than to others. And it’s here that his experience with debt financings that don’t leave the borrower sweating should come in useful.

 While Ratcliffe might appear impulsive (can you imagine BP or Shell buying United?) nothing suggests he will do anything for sentimental reasons if the data suggests otherwise. It’s hard to imagine that any stadium investment, even if part of an urban revitalisation scheme, will proceed unless the numbers make sense.

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