Yahoo Finance In Manchester United bidding war, Ratcliffe’s US$16 billion fortune might not be enough
By Benjamin Stupples, David Hellier and Sabah Meddings
(Bloomberg) — Jim Ratcliffe has all the trappings of the mega-wealthy: a Gulfstream jet, a seafront mansion, residency in Monaco and a superyacht featuring a wine cellar with its own underwater viewing window.
When it comes to sport, though, the UK’s richest person has struggled to match that glamorous success. His French football club finished the season mid-table, his Tour de France cycling team isn’t hitting the heights of old, and his investment in Formula One motor racing has barely moved the needle.
Ratcliffe is now chasing one of the biggest trophy assets in sport, Manchester United. For the 70-year-old, buying the English Premier League giant would elevate his sporting empire to reflect his wealth and enhance his brand. The trouble is that the self-made billionaire from the north of England is competing against a royal from a Gulf state with a US$450 billion (S$594.5 billion) sovereign wealth fund.
Through his chemicals company Ineos, Ratcliffe has amassed a fortune of US$16.4 billion (S$21.8 billion), according to the Bloomberg Billionaires Index. Yet the battle for Manchester United has exposed the new wealth divide in football that even the most moneyed man from a G-7 economy might not be able to bridge.
A member of Qatar’s royal family, Sheikh Jassim Bin Hamad J.J. Al Thani, is offering to buy Manchester United outright for about £5 billion (US$6 billion). Ratcliffe, meanwhile, is initially only seeking a majority stake — a less appealing offer that has upset some minority shareholders, according to people familiar with the transaction.
The US-based Glazer family, which has owned Manchester United since 2005, is expected to decide on a sale imminently or opt to hang on to the club.
“We have a good offer,” Ratcliffe, a lifelong Manchester United fan, said at a media event in London this month. “We still would very much like to do it, and I think we would do a good job if we did.”
After failing to buy London club Chelsea last year, acquiring Manchester United would turbocharge Ratcliffe’s efforts to widen his sprawling business empire. Losing out would be one of his biggest public setbacks in a career spanning more than four decades.
He’s pushed into sports at the same time as expanding Ineos, partly to help bolster awareness of the closely held firm’s brand. He purchased Swiss football team Lausanne for an undisclosed sum in 2017, the same year Ineos acquired UK clothing brand Belstaff and announced plans to build an off-road vehicle to rival Tata Motors Ltd’s Land Rover.
Ineos pledged £110 million (S$190.2 million) the following year to partner with five-time Olympic medalist Ben Ainslie to build a British sailing team for the America’s Cup. In 2019, it acquired French Ligue 1 football club OGC Nice as well as the former Tour de France-winning Team Sky cycling team.
A year later, it announced an investment in Mercedes-Benz’s Formula One racing team, disclosed to be £208.4 million (S$360.4 million) in UK registry filings, while starting a hand-sanitizer business as Covid-19 took hold. Ineos signed a sponsorship agreement with New Zealand’s All Blacks rugby team in 2021.
“The sports that Ineos have chosen to invest in each have different demographics and dynamics — they reach a wide cross-section of people,” said Cristina Philippou, a principal lecturer at the University of Portsmouth who researches economics and finance in sport. “Sometimes success in sport can be judged differently by an investor. People invest in sport for many different reasons, like increasing brand awareness.”
A chemicals graduate who spent his early years in a council house in a district of Manchester, Ratcliffe has also raised his own public profile of late.
At the launch of his book Grit, Rigour & Humour: The Ineos Story this month, he criticized the UK’s energy policy and accused a senior government minister of being unqualified for the job. In an op-ed for the Sun newspaper, he outlined what he would do to fix Britain with “competent management.”
Indeed, Ineos is his model for that. Ratcliffe worked for oil giant ExxonMobil as well as US private equity group Advent International before he formed the company in 1998, partly taking its name from the Latin word for “new beginning.” He gained a reputation for spotting undervalued assets.
Ratcliffe oversees the group alongside two other major shareholders, John Reece, 66, and Andy Currie, 67. They are worth about US$5 billion each through their stakes of roughly 19% in the firm, with Ratcliffe holding the balance, according to the Bloomberg Billionaires Index. Ineos declined to comment on the wealth of the three executives.
Ineos’s group revenue increased more than 60% over the past decade to about US$65 billion by 2022. One of its top holding companies paid out about €4 billion (US$4.5 billion) in dividends during the period, according to data compiled by Bloomberg.
How much exactly flowed through to Ratcliffe is unclear. He and his fellow shareholders control the firm through an entity in the Isle of Man, a British Crown dependency that doesn’t force companies to publish annual accounts.
What’s clear is that Manchester United, one of the world’s biggest clubs in terms of both revenue and fan base, would mark a significant step up in Ineos’s sports investment. The bidding process is now in its ninth month, and Ratcliffe and Al Thani have submitted more than half a dozen bids between them in that time. The Qatari group is now confident it’s the favorite.
In cycling, the Ineos Grenadiers team won the Tour de France with Colombian Egan Bernal in 2019. Riders then finished third in 2021 and 2022, and are winning stages in this year’s event. But before Ineos bought what was Team Sky, it triumphed in six out of seven years.
Lausanne dropped out of the Swiss top division twice during Ratcliffe’s tenure as its owner, but just secured promotion again for the coming season. OGC Nice finished ninth in Ligue 1 in the 2022-23 season, its lowest since the billionaire took over the club, after spending a net of more than €100 million (US$110 million) on players during the period.
“There’s no doubt that results at his largest football club have been a bit underwhelming based on high expectations and the size of that club,” Jordan Gardner, a sports investor who used to run the Danish football club Helsingør, said on Ratcliffe’s record at OGC Nice.
That said, Ratcliffe knows where he can compete and where he can’t, according to Andrea Sartori, founder and chief executive officer of data platform Football Benchmark. French football champion Paris Saint-Germain is owned by a subsidiary of Qatar’s sovereign wealth fund.
PSG “are unreachable financially,” said Sartori. “Jim Ratcliffe hasn’t thrown stupid amounts of money away at Nice to try to create an overnight success.”
In sailing, he’s also been canny with Ineos Britannia. The team narrowly missed out on the America’s Cup final in 2021, with the next instalment of the competition next year.
And across all of his sports investments, Ratcliffe is showcasing the Ineos brand as much as possible. Both OGC Nice and Lausanne have his firm’s name emblazoned on their players’ shirts, as do the cars of the Mercedes-AMG Petronas Formula One team. The Ineos Grenadiers cycling team shares its name with its owner’s off-road vehicle, which takes its name from a London pub Ineos owns.
“We don’t need the public to know who Ineos is when we’re in the chemicals world,” he said at the July 5 media event at Belgravia’s Grenadier pub to launch his book. “But if you’re selling cars, then they need to know about it.”
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