Old Trafford may be shrouded in dark clouds, but one group of experts predicts a bright future for Manchester United.
Global investment bankers UBS say the arrival of Sir Jim Ratcliffe and INEOS following their acquisition of 29 per cent of the embattled Premier League giants “should (eventually)” see the fallen giants return to the top.
The Switzerland-based group has carried out a 41-page in-depth analysis of the business, seen by sport mail – and its findings may come as a surprise given INEOS' rocky start.
UBS predicts a return to the top four and the Champions League within four seasons for United and huge revenues that could break the £1 billion barrier.
In fact, they believe that the club's share price is currently undervalued and recommend that potential investors buy now.
Ratcliffe's group, which arrived about a year ago, has come under severe criticism following a series of cost-cutting measures that have seen around 250 staff made redundant and a series of savage cuts across several departments.
Expert group predicts bright future for Manchester United despite terrible form
Sir Jim Ratcliffe and INEOS have had a rocky start since their 29 per cent acquisition.
United has made extensive cuts, including 250 layoffs, in a cost-cutting exercise.
On-field performance is also a major cause for concern, with new manager Ruben Amorim left in no doubt about the size of the task ahead of him following Monday night's 2-0 home defeat to Newcastle, which left fans nervously looking over their shoulders given United were sitting. Next up is 14th place with Liverpool.
However, the forensic report titled “The Red Devils Will Rise Again” offers many reasons for optimism.
UBS claims the cuts could help trigger a revival in the field, stating that “new management and focus on cost management should support investment to improve sporting performance as well as a return to net profitability.”
United's latest figures, before the controversial measures, saw them make record revenues of £662m but suffer a net loss of around £113m.
However, if Amorim achieves a turnaround, United could see its revenue rise to more than £800m, says UBS.
And in further good news for a fan base currently in desperate need, analysts also point out that a new stadium, currently being explored, would take that figure to over £1bn thanks to a £200m increase in pounds sterling thanks to increased ticket sales. , hospitality and events.
The analysts recommend that investors buy the shares at their current value of around £18.32, adding that amid “continued interest in sports teams and leagues from private equity and wealthy individuals eyeing trophy assets, we see the Manchester United's valuation is also supported.”
However, there is a note of caution. “This is by no means a foregone conclusion given recent poor results,” the report added, “but the new director offers a potential turning point for change, although it may take time to materialise.”
If Ruben Amorim oversees a recovery, United's revenue could rise to over £800m.
The report has outlined several reasons for investors (and their supporters) to be optimistic.
UBS also notes that United's revenue base is “superior to most of its peers” and offers “the ability to spend more on talent.” And they add: “We assume that performance will change and lead to participation in the Champions League from 2028.”
The group estimates United would need to finish in the bottom five for revenues to fall below £650m and, as such, sees little risk for investors at current prices. A situation like this in the league, they say, is “very unlikely.”
The document says the involvement of Ratcliffe and INEOS “provides a potential turning point for the club's fortunes.”
He adds: “While we do not see a silver bullet to immediately reverse a decline in on-field performance, the change in corporate management, the coaching staff and the increased focus on cost control, as demonstrated by the rationalization of headcount , are indicative of a change in mentality with a view to improving sporting and financial performance. Greater investment, a push for the redevelopment of the old stadium and the potential benefits of multi-club ownership could be positive factors.
Headlined: “Too much revenue generation to stay average for long,” the analysis also notes that despite a disappointing season last year, United earned record revenues “demonstrating its loyal fan base and appeal.” commercial”.
He adds: “Indeed, it is this high revenue base with no direct link to on-field performance that supports our view that the team will remain competitive, especially in light of a growing focus on financial fair play.”
UBS predicts United will finish seventh this season and fail to qualify for Europe. However, they project a fifth-place finish next year and the year after that, before returning to the top four and the lucrative Champions League in 2027-28.
They also warn that if United do not perform at the levels they predict on the pitch, it would have an adverse impact on revenue and suggest proposed financial rules for the Premier League, which set a spending limit as a multiple of the amount the last club receives in transmission. and commercial fees – could limit United's ability to pay top players.
This could “lead to a more competitive league to the potential detriment of Manchester United's revenue,” he adds.