It's Indispensable

Chapter 516 It's Indispensable

Inside the private room, Ernst looked at the light sphere above the ceiling, wondering how the small laser device being developed by Starlight Technology was progressing.

He picked up the lit cigar from the ashtray, took a puff, exhaled a smoke ring, and said, "If you're interested, I happen to have a project here that I guarantee will make you all a fortune."

"What project?" Massim's eyes blazed with an undisguised fervor, his gaze fixed on Ernst like a hawk locking onto its prey. His eagerness and fervor even made him subconsciously adjust his posture, as if the guest wanted to extend the time.

Ernst didn't reply, but instead turned his gaze to Ralf, who remained silent across from him. "Ralf, how's the Manchester United acquisition going?"

Manchester United?

Those present are all seasoned investors in the sports field, although their depth of experience in the sports industry may not be as great as that of professional managers or industry practitioners.

But we also know that Manchester United is a Premier League team.

The other party is not only investing in North American sports events, but also setting their sights on football clubs in Europe?

How optimistic is this about the development trend of the global sports industry?

Otherwise, how could there be such a large-scale, cross-regional capital investment, a full-scale foray into top-level sporting events, and a global sports investment landscape?

Ralph met Ernst's gaze, slowly shook his head, and said with a hint of seriousness, "The situation is far from ideal; in fact, it's much more complicated than we initially anticipated."

Ernst's brow furrowed slightly, and a sharp glint flashed in his deep eyes.

He understood what the other person meant from that brief response alone.

Does that mean it has to be Manchester United? Can't they just acquire other Premier League teams?

"Very unsatisfactory" and "not very ideal" may sound similar, but they convey completely different meanings, indicating that Manchester United's acquisition faces enormous obstacles.

Would it be feasible to acquire other Premier League teams?

of course can.

However, from the perspective of maximizing benefits, Manchester United is definitely the most cost-effective choice.

A wealthy family.

In the world of football, results are not the only measure of success.

While on-field performance is fundamental, it is also a core element in maintaining brand popularity.

But what truly sustains a team's long-term success and allows it to achieve continuous growth in commercial value is its strong ability to generate its own revenue, that is, a stable and continuous source of income.

The most crucial prerequisite for achieving this is having a huge fan base that is spread all over the world and has extremely high loyalty.

This is not only the core guarantee for the sales of team merchandise, but also the key to attracting sponsors and enhancing the value of broadcasting rights.

How many years has Chelsea been spending lavishly on football? How many championships have they won? This has earned them the title of "elite club" among football fans worldwide.

Is it because of grades?

No, it's because Chelsea has fans all over the world.

These fans provide Chelsea with various tangible and intangible benefits, serving as financial support, which encourages star players to join, resulting in a continuous string of victories.

This is the most important condition for a family to rise to prominence.

Manchester United undoubtedly has an inherent advantage in this regard.

With a century of accumulated brand culture, countless glorious memories of classic matches, and its current dominant position, the Premier League carries the hopes of many fans to return to Europe.

Especially next year, the name of Manchester United's Class of '92 will be known all over the world, gaining countless fans. The value of this intangible asset is something that other Premier League teams will find difficult to replicate in the short term.

For Ernst, acquiring star players was easy.

Given his track record, he believes finding a good coach won't be too difficult.

The problem is the time cost, which is something he's unwilling to pay.

"Tell me specifically what problems you encountered?" Ernst's voice turned somber.

Ralf ignored the others in the private room and reported on the acquisition situation with Manchester United.

"The continued reduction of shares by major shareholder Edwards, who cashed out his profits, has had a very negative impact on Manchester United's fan base."

"In two years, Edwards made two large-scale reductions in his holdings, selling 160 million and 220 million Manchester United shares respectively, reducing his stake from 50.06% to 17.2%."

"This makes Manchester United fans feel that capital is destroying Manchester United, that they don't really care about the team's long-term development, and that they are just using Manchester United as a tool to extract profits and constantly squeezing the club's value."

Ralf suddenly showed a hint of helplessness on his face. "Just when we were preparing to contact Manchester United, the CEO of Sky Sports suddenly proposed to Edwards on behalf of media mogul Rupert Murdoch that Manchester United be acquired. This acquisition has caused a huge controversy."

"On the one hand, Manchester United fans strongly protested. They believe that Murdoch and Edwards are essentially the same kind of people, both profit-driven capitalists. Their real purpose in acquiring Manchester United could not be to help the team improve its performance as he claimed, but rather to turn the club into their own cash cow and squeeze its commercial value through excessive exploitation of broadcasting rights and commercial sponsorships."

"On the other hand, Sky Sports currently holds the exclusive broadcasting rights for the Premier League. If Murdoch successfully acquires Manchester United, it will create a direct link between the media platform and the football club. This means that Manchester United may gain an unfair advantage in areas such as the allocation of broadcasting resources and the promotion of matches, thereby undermining the fair competition environment of the Premier League."

"Fans from other teams, and even some club management, have expressed concern and put pressure on the FA to oppose the takeover."

"The FA will never agree to this takeover," Ernst said with almost no hesitation, his tone certain.

Ralph nodded in agreement, saying, "Our team has made the same judgment; the probability of Murdoch's acquisition being approved is extremely low."

"But the problem is that his actions have created huge obstacles for our acquisition plan."

"After Edwards's sale of his stake and the Murdoch takeover saga, Manchester United's fans have become extremely wary and hostile to any capital intervention. They now view almost all capital attempts to acquire the club as potential predators, fearing that the club's traditions and interests will be eroded by capital."

Ralf's tone grew increasingly serious. "More importantly, Manchester United has a special fan shareholders' association. This organization is composed of core fans, and they hold a total of more than 18.1% of Manchester United's shares. In terms of shareholding percentage, they are currently the largest shareholder of Manchester United in the true sense."

"Moreover, this association has a seat on Manchester United's board of directors and can directly participate in the club's major decisions."

"Without winning the trust and support of this fan shareholder association, our acquisition plan simply cannot proceed. Given the current antagonism of fans towards capital, persuading them to agree to the acquisition in a short period of time is almost an impossible task."

"In addition, price is also an issue. To demonstrate his sincerity in the acquisition, Murdoch offered a total market value of £6.234 million, with each share representing a premium of more than 50% over the current market price."

"Given Edwards's greed, he absolutely will not consider any offer below this price, and he won't even give us a chance to sit down and negotiate."

Although Ralf didn't know why Ernst insisted on finalizing the Manchester United takeover by February next year, given the current situation, it was simply impossible.

"Then let's just throw money at it," Ernst said, something that surprised everyone.

Massim stared wide-eyed, his face filled with disbelief. The others also looked on in astonishment, their gazes towards Ernst filled with doubt and confusion.

Ernst, however, appeared unusually calm, as if he had simply made a routine decision. "The reason why Manchester United fans oppose the acquisition by capital is simply because they worry that capital only cares about profits and ignores the team's performance, and is unwilling to invest sufficiently in the transfer market."

"Manchester United fans are worried about nothing more than the team's performance. After the new capital takes over, Manchester United will not be given enough transfer fees."

"Then tell them that if they agree to our takeover of Manchester United, Manchester United will receive £100 million in transfer spending over three years, and no less than £15 million in transfer spending each year thereafter."

"However, there's a condition," Ernst said, changing the subject. "That is, they must sell their shares to us at market price."

"As for Edwards, whatever price Murdoch offered him, we'll negotiate based on that price."

crazy.

Ernst has gone mad.

Not only Ralph, but everyone else couldn't understand what Ernst's purpose was in doing this.

Ronaldo's transfer to Inter Milan this year cost only £2650 million.

In European football, five million pounds can buy a top-class player.

£100 million over three years, with annual transfer spending no less than £15 million thereafter.

What are they trying to do?

Should Manchester United fill every position with a superstar?

The ultimate goal of acquiring a football team is to make a profit, thereby increasing brand value and economic benefits by improving the team's performance and optimizing business operations.

But Ernst's plan doesn't seem like an investment to make money; rather, it seems like he's recklessly injecting capital into Manchester.

Manchester United's big philanthropist?

This is no longer as simple as not taking money from the team; it means investing huge sums of real money every year and continuously burning money for the team.

Everyone knows that such a large-scale acquisition will inevitably adopt a leveraged buyout model, and huge amounts of loan principal and interest will need to be repaid every year thereafter.

If you can't rely on the team to make the annual loan repayments, you'll have to take the money from your own pocket.

What is this if not madness?

If the team's operating revenue cannot cover these costs, then the difference will have to come out of Ernst's pocket.

With this condition in place, Manchester United fans will probably all be ready to slide on their knees in celebration.

How many fans can resist this temptation?

Put yourself in their shoes; if they were Manchester United fans, they would have agreed to Ernst's offer to buy the property.

"I don't really understand." Coming to his senses, Ralph spoke tactfully, but the doubt in his words was palpable.

Such a huge investment carries too much risk, and in the short term, there is almost no possibility of making a profit.

This isn't an acquisition; isn't this pushing his department to the brink of collapse?

Ernst, however, showed no pride in the shock he had caused these people, and said with a smile, "Always remember this, what we need are fans."