After a lot of NFL news, this week we look at the football you play with your feet. It’s arguably the most important season ever for the MLS, so we talk to deputy commissioner Gary Stevenson about its plans. And we look at the mess at Manchester United and the sale process of Glasgow Rangers.

Also, in the ever stranger world of football, we had a reporter in Benghazi to watch a match put on by a Libyan warlord. Real Madrid giants Luis Figo, Roberto Carlos and Michael Owen along with ex Barcelona striker Samuel Eto’o and Juventus’s David Trezeguet were there. (In non football news — beards are in.)

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Man, What a Mess

It’s been a year since Jim Ratcliffe completed his deal for a stake in Manchester United, so it’s a perfect time to look at what the hell is going on there.

If you didn’t grow up obsessed with football, it’s hard to understand how big a deal Manchester United are. If you say “United,” everyone knows who you are talking about, which is annoying because I support Sheffield United (Giulia supports Inter Milan and David follows Chelsea FC. We’ve all got our own problems...).

There should be nothing better than watching a once dominant United flounder, but it’s just getting silly now. They can’t stop losing. It must be like supporting the Dallas Cowboys. What’s the point of being one of the richest teams on the planet if you’re not going to win anything?

Jim Ratcliffe at Old Trafford. Thinking about debt ratios probably. Photographer: Ash Donelon/Manchester United

Well, maybe now Manchester United aren’t as rich as they used to be, thanks to a looming debt problem. This sort of stuff is fiddly, but Giulia writes about it for a living, so she breaks it down for us:

• In 2015, Manchester United sold $425 million of bonds in the US private placement market. That’s a niche corner of the finance world, where buyers would typically be insurers and asset managers.

• That debt is coming up for repayment in June 2027. If Manchester United wants to repay that, it will likely have to sell more debt. But borrowing costs are rather higher.

• In fact, back in 2015, Manchester United borrowed at a fixed 3.79% when benchmark interest rates were hovering below zero. Over the last few years these rates jumped. For instance, the owner of Manchester City pays 7.4% on some loans sold in US credit markets.

• Separately, Manchester United also owes money to US and European banks. For instance, Bank of America gave it $225 million in loans. Unlike the bonds, this has an interest cost that fluctuates depending on rates in the US.

• The bonds and the Bank of America loan represent the more permanent type of debt that Manchester United has. There’s also another form of borrowing, which the football club can tap and repay when it needs cash. These lines get drawn quite a bit over the summer transfer window and then get repaid as the club gets money from broadcasting rights and match tickets throughout the season. They are called revolving credit facilities.

• Manchester United has three of those: two of them with Bank of America and one with Spanish bank Santander. These three combined allow the club to draw down a maximum of £300 million at anytime. Like most bank loans, the interest you pay on these fluctuates with headline rates.

• According to the contracts regulating these bonds and loans, Manchester United has to pass a series of financial tests every year. These encompass typical terms you see for debt of other companies across various sectors, but there is at least one aspect that’s unique of a football club. Manchester United needs to have its consolidated Ebitda — earnings before interest and tax payments etc etc  — above or at £65 million for the year (it’s over £100 million for now). However, it can go below this level if the club doesn’t qualify for the Champions League group stage. This free pass can only be tapped however twice in the lifetime of the debt.

• Even though Manchester United didn't qualify for the Champions league this season, it should be able to avoid falling foul of this clause, given there are only two more years left before it needs to refinance. And it should still be able to attract investors interested in lending it money due to the value of its brand.

Got that? So Man City pays 7% when it’s backed by a petrostate and has actually won something recently. Ratcliffe has big dreams. You don’t buy a stake in Manchester United without them. Still, the question remains, who is going to pay for the club to get back to the top? 

Yes, football clubs are worth a lot of money. You’d need over $6 billion to buy Manchester United. But they also cost a lot to run. Ratcliffe wants to build a £2 billion state-of-the-art stadium, and win the league by 2028. Who’s going to pay for it? It’s unlikely to be the Glazer family, who are still the majority owners but have a reputation of taking more money out of United than they put in. 

“Now the Glazers need to agree among themselves what they want to do,” said John Yetimoglu, founder and chief investment officer of Infinitum, a minority shareholder in Manchester United. “Their asset has performed really well. They paid around $100 million in equity for an asset that is now worth around $5 billion.

“But the need for a new stadium means that the only way to create future value is to put billions more into the company or you can take out what you have invested. The logical thing is not to risk the entire family's wealth but to sell the club. All the minority shareholders want the club to be sold.”

Perhaps it all comes down to when Manchester United needs to refinance. If the club isn’t winning by then, the debt costs may become unpalatable, the Glazers want out, and another long, drawn out bidding war for United starts all over again. 

Read more about how Ratcliffe’s promise to turn round the fortunes of one of the world’s biggest football clubs isn’t quite going to plan.

ICYMI

• The San Francisco 49ers are exploring selling a 10% stake at a valuation of more than $9 billion, potentially making it one of the world’s most expensive sports teams.
• Ticket sales to sporting events could become collateral for the next type of debt securitization, especially as more investment firms snap up shares of professional sports teams.
• Eagle Football Holdings, one of the most active investors in football clubs globally, is working with UBS on its planned initial public offering in New York.
• Left Lane Capital is in advanced talks to lead an investment round in Pro Padel League.
• Major League Baseball and Walt Disney Co.’s ESPN are ending their broadcast relationship at the end of the 2025 season, calling it quits on ties that go back to 1990.
• Mexico’s largest soccer team, Club America, has signed a multi-year partnership with Adidas, bringing its contract with Nike Inc. to an end as of this summer. 
• Finally, how developers in New Zealand want to create a destination to rival Pebble Beach. If they don’t have a Lord of the Rings mini golf course I’m not interested. 

Te Arai Links South Course in Tomarata, New Zealand. Source: /Te Arai Links/Legacy Partners

The Biggest Two Years 

Hi, it’s Vanessa. As a former soccer player (ed. note: ok we can call it soccer just this once) I am pumped to be in the US for once. We’ve got the FIFA Club World Cup this year, the CONCACAF Gold Cup, leading to the 2026 FIFA World Cup. There has never been a more important time for the sport to take off stateside than these next few years and Major League Soccer knows it can’t mess up now. 

“Once those events leave the country, MLS will still be here,” MLS deputy commissioner Gary Stevenson told Bloomberg in an interview earlier this week. “We will be the option for them. And so this is a really important 24 month period for us.”

The last time the US hosted the World Cup was in 1994 before the MLS even played its first game, so the attention from the tournament will be unprecedented for the league. However, maintaining the fans will still prove to be a challenge due to the league’s broadcast deal with Apple TV. 

St. Louis City fans hold up scarves as their team takes the field during a MLS regular season game against DC United. Photographer: Icon Sportswire/Icon Sportswire

They are in year three of a $2.5 billion 10-year deal with the streaming service that has limited their viewership growth. Last year’s MLS Cup broadcast on FOX only drew 468,000 viewers, down 47% from the year before.

The game was also being simulcasted on Apple TV, which could be the reason for the low broadcast numbers, but the streaming numbers were not released. This is a problem. How can we tell if the deal with Apple is a success or not for MLS if we don’t know who’s watching? There needs to be more accountability. 

The league understands the distribution limitations and took measures to increase the accessibility. Comcast Xfinity and DirectTV customers will now have Apple TV ingrained in their systems and be able to subscribe directly from there. The Apple TV app will also now be available for Android devices, which the deputy commissioner pointed out is good for their market in Latin America because over 80% of the region doesn’t use iPhones. 

“If you put all of that together, the distribution of season pass will be significantly more than it was,” said Stevenson. “And we're excited about that.”

This season also brings the league up to an even 30 clubs with the addition of the latest expansion franchise San Diego FC. The MLS has added a new team nearly every year since 2015 but 30 is typically the number that signifies a league is full. 

“We're not actively seeking expansion,” Stevenson said. “It's not something that we put on our list of priorities. But if there is an attractive market with an attractive ownership group that is interested in our league, we of course, will have those conversations.” 

Bloomberg also spoke to the CEO of the newest team San Diego FC on the Bloomberg Business of Sports podcast about leading the introduction of his second expansion franchise. Tom Penn also led LAFC into their inaugural season. Listen to the full interview here.

Hi, it’s David. The 49ers have chosen an interesting time to try to make an investment in Glasgow Rangers, the Scottish footballing giant. Only days ago, Rangers’ footballing fortunes sank to what for many was an unthinkable low. It lost a home cup tie to a team in a lower division for the first time in its 153 year history (Queens Park FC).

The 49ers, who also own Leeds United, want at least 51% of investors to agree to a 25p-a-share proposal before proceeding with a bid, according to a person familiar with the situation.

Glasgow Rangers during the cup match on Feb. 9. Photographer: Ian MacNicol/Getty Images

The deal values the club at around £120 million — incredibly about the same amount as Bill Foley, the billionaire owner of the National Hockey League’s Las Vegas Golden Knights — paid for the successful, but less storied Bournemouth.

Rangers is a big club. It is almost guaranteed to qualify for the Champions League or Europa League each year through virtue of it being one of two perennially top teams in Scotland, alongside its fierce crosstown rival Celtic. It’s hard to know if £120 million is good value or not. 

Still, the 49ers will have plenty of money if they sell their stake in their NFL team, Bloomberg reported earlier this week. The 49ers, who declined to comment, have given investors until March 1 to agree a deal. Rangers told the Press Association: “It is not our policy to comment on speculation. If there were any such discussions, these would remain confidential.” The press officer didn't return calls.

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