Manchester City owners might not match Liverpool’s £5.5bn valuation in forced sale

If Manchester City’s owners do have to sell the club, how much would it be worth?

In the wake of the independent commission’s bombshell verdict last week, in which Manchester City were found guilty in almost all of the 115 charges levelled against them, pressure is growing on Sheikh Mansour and the Abu Dhabi United Group to sell their majority shareholding in the club.

Calls for City’s owners to sell have come from fans and pundits alike, with Jamie Carragher writing in the Telegraph that a sale would be the only way for the club to recover from the ‘shame and guilt’ of its wrongdoing. The pressure has become so acute that Prime Minister Andy Burnham even felt obliged to weigh in, suggesting he would be “really concerned” if the Abu Dhabi United Group were forced to divest.

If the Abu Dhabi United Group were to sell, an obvious question arises: how much is Manchester City worth, given the legal, political and reputational controversy in which the club now finds itself?

If Sheikh Mansour was selling City in normal circumstances, he would be justified in seeking a valuation of above £5billion.

City’s most recent reported revenues were almost £700m, just shy of Liverpool’s £703m turnover. Liverpool recently received investment from an Amit Bhatia-led consortium at a reported valuation of £5.5billion. Liverpool, unlike City, own the freehold of their stadium whilst City operate the Etihad on a long-term lease from Manchester City Council. Regardless, the similar profile and brand status of the clubs would give the Abu Dhabi United Group, in normal circumstances, grounds to seek a similar revenue multiple to that which Fenway Sports Group achieved.

The aftermath of the independent commission’s verdict, however, are not normal circumstances. City now face the genuine prospect of being expelled from the Premier League, and perhaps even from the professional football pyramid altogether. An independent commission declared their sponsorship contracts as a “sham” designed to artificially inflate the club’s commercial revenues.

The risks that any potential purchaser of the club would inherit – and would have to price into any potential acquisition of the club – are consequently huge.

Expulsion from the Premier League, without any form of parachute payment, would almost entirely eradicate the club’s broadcast revenues, which amounted to £276m in the club’s last reported financial accounts. Current sponsorship agreements will most likely contain clauses which allow sponsors to either terminate contracts, or radically reduce payments, if City are removed from the Premier League. 90% of City’s turnover currently comes from broadcasting and sponsorship deals – all of which are put under threat by the independent commission’s ruling.

The risks, however, go beyond simply a loss of revenue. There is a very real prospect that City may be subject to further legal challenges from other clubs, which could require the payment of hefty compensation. In September 2024, Tottenham, Arsenal, Manchester United and Liverpool all reserved the right to seek compensation from City if any of the 115 charges were upheld.

Precedent exists for such compensation to be paid. Everton were forced to pay £35m to Burnley earlier this summer, after an independent commission deemed that their breach of Premier League rules had given them an unfair advantage which had contributed to Burnley’s  relegation in 2022.

Any potential purchaser of the Cityzens would therefore face a daunting set of risks: the possible erosion of almost all the club’s revenues in addition to an indeterminate amount of compensation that may be required to be paid out over the coming years.

The scale of these risks could conceivably create a scenario where no purchaser is willing to pay any money for Sheikh Mansour’s ownership stake in City. The assumption of these risks, and the commitment to the substantial amounts that will be required to rebuild City in the aftermath of the verdict, could very possibly be sufficient for the Abu Dhabi United Group to hand over the keys to the Etihad for little or no money in return.

Of course, this eventuality is the worst-case scenario which may not come to pass. City may potentially win on appeal, and consequently all of the potential sanctions that could be passed down on them remain hypothetical. Similarly, there may be a number of buyers willing to offer the Abu Dhabi United Group an above market exit price to gain political influence and favour in the Gulf.

Regardless, the fact that there is a world in which City’s Abu Dhabi-based ownership group may be forced to accept a sale of the club for little or no money underlines the seismic impact which the independent commission’s ruling has had.

Oliver Cantrill

Insight Eleven is a boutique M&A advisory firm specialising in football club transactions. You can follow them on LinkedIn.