Dark clouds may have shrouded Old Trafford, but a group of experts are predicting a bright future for Manchester United.
Global investment bankers UBS say the arrival of Sir Jim Ratcliffe and INEOS following their takeover of 29 per cent of the beleaguered Premier League giants should '(eventually)' see the fallen giants return to the top.
The Switzerland-based group has conducted an in-depth 41-page analysis of the company – seen by Mail Sport – and its findings may raise eyebrows given INEOS' rocky start.
UBS predicts a return to the top four and Champions League football within four seasons for United and huge revenues that could break the £1 billion mark.
They believe that the club's share price is currently undervalued and recommend potential investors to buy now.
Ratcliffe's group, which arrived about a year ago, has come under heavy fire following a raft of cost-cutting measures that have seen around 250 staff made redundant and a series of brutal cuts across several departments.
Performance on the pitch is also a major cause for concern, with new manager Ruben Amorim leaving no doubt about the lead's job after Monday night's 2-0 home defeat to Newcastle, leaving fans looking nervously over their shoulders after United took action. 14th place with Liverpool is next.
However, the forensic report, titled: 'Red Devils will rise again', outlines a wide range of reasons for optimism.
UBS claims the cuts could well help fuel a revival on the pitch, saying the 'new management and focus on cost management should support investments to improve sporting performance, as well as a return to net profitability'.
According to United's latest figures, ahead of the controversial measures, they raked in a record turnover of £662m but made a net loss of around £113m.
However, should Amorim oversee a revival, United could see revenues rise to more than £800 million, UBS says.
And in more good news for a fanbase currently in desperate need, the analysts also point out that a new stadium – currently under investigation – would boost that figure to more than £1 billion thanks to a £200 million boost from the increased ticket sales. , catering and events.
The analysts recommend investors buy shares at their current value of around £18.32 and add that given continued interest in sports teams and leagues from private equity and wealthy individuals seeing trophy assets, we believe Manchester's valuation United also see support.
However, there is a warning. “This is by no means a foregone conclusion given recent poor performance,” the report adds, “but the new manager offers a potential turning point for change, even if it will take some time to materialize.”
UBS also points out that United's revenue base is “superior to most peers” and “offers the opportunity to spend more on talent.” They added: 'We assume that performance will turn around and lead to participation in the Champions League from 2028.'
The group estimates that United would need to finish in the bottom five for turnover to fall below £650 million and therefore sees little risk to investors at current prices. According to them, such a position in the competition is 'very unlikely'.
The document says Ratcliffe and INEOS' involvement 'offers a potential turning point for the club's fortunes'.
It adds: 'While we don't see a silver bullet to immediately reverse a decline in on-field performance, the shift in corporate management, staff coaching and increased focus on cost control, as evidenced by the rationalization of the workforce, indicative of a change in mentality with a view to improving sporting and financial performance. Increased investment, a push for redevelopment of the aging stadium and potential benefits of owning multiple clubs could all provide a positive boost.”
Under the heading: 'Too much revenue to remain average for long', the analysis also points out that despite a disappointing season last year, United brought in record revenues 'demonstrating its loyal fan base and commercial appeal'.
It adds: 'Indeed, it is this high revenue base without a direct link to on-field performance that supports our view that the team will remain competitive, especially in the face of an increasing focus on financial fair play.'
UBS predicts United will finish seventh this season and fail to qualify for Europe. However, they expect a fifth-place finish next year and the year after, before returning to the top four and lucrative Champions League football in 2027-28.
They also warn that if United do not perform at the level they predict on the pitch, it would have a negative impact on revenues and propose proposed financial rules for the Premier League – which would set a spending cap as a multiple of the amount the bottom club receives during broadcasts. and commercial fees – could limit United's ability to pay for the best players.
This could “lead to a more competitive league, potentially at the expense of Manchester United's revenues,” it added.
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