Loath as we are to writing stories about tweets that “go viral”, there was a good one posted by a theatre director from Lancaster called Carl Woodward during Elton John’s recent Glastonbury farewell.
As the Rocket Man approached the climax of his set, Woodward tweeted, “I often think about Elton John’s memoir”, above a picture of a paragraph from the superstar’s 2019 autobiography, Me.
“I don’t need a psychiatrist to tell me that material possessions aren’t a replacement for love or personal happiness,” wrote Watford’s famous former owner and honorary life president. “I have spent enough miserable, lonely nights in houses with beautiful things to have worked that out for myself a long time ago.”
The passage then continues with a warning about shopping after “three-day cocaine binges”, as you might wake up “confronted by bags and bags filled with absolute crap you will not remember buying”.
Or, in his case, a tram. Not a model tram, “an actual tram… that the voice at the end of the phone is now informing you has to be shipped from Australia to Britain, where it can only be delivered to your house by two Chinook helicopters”.
Reading it made me wish more football club owners would write books about what motivates them. So you can imagine my delight when I was sent an advance copy of Grit, Rigour & Humour: The INEOS story.
It is published next week to mark the 25th anniversary of the founding of INEOS, the chemicals to bicycles conglomerate co-founded and run by Sir Jim Ratcliffe.
Pre-orders have taken it to the top of the Amazon best-sellers chart for “business ethics”, but it is not deemed eligible for the “sports” chart, which is a missed trick as the book tells us more about why Ratcliffe wants to buy Manchester United, how he would fund it and what an INEOS-run United would look like than anything produced in the past eight months of best-intentioned guesswork.
In short, the book is a Ratcliffe-approved manual for success, INEOS-style, and, in the absence of any real new news on the takeover, it is the most significant set of clues as to what might happen since INEOS and Qatari royal Sheikh Jassim, Ratcliffe’s only rival for a change of control at Old Trafford, released statements to announce their bids in February.
So, without further detours through pop history, let us dive in and see what United-related pearls we can find…
Why does Ratcliffe want to buy United?
Simple, he has been a supporter since childhood — doesn’t every fan wish they could own their club?
Born in Failsworth, a town halfway between Manchester and Oldham, Ratcliffe lived in what is now part of Greater Manchester until his family moved to Hull, a hundred miles away on the other side of England, when he was 10.
His dad was a Manchester United fan and had the family’s only ticket at Wembley in 1968 when Sir Matt Busby’s team became the first English side to win the European Cup. A 15-year-old Ratcliffe Jr was left stewing at home, which presumably made his attendance at the 1999 Champions League final in Barcelona, where United sealed the treble, all the sweeter.
In the book’s chapter on sport, Ratcliffe tells journalist Patrick Barclay about trips to United away games in Yorkshire with his father and younger brother, including one game at Leeds United where, ticketless, he climbed over the wall to get in but then had to help as female fans were passed over the heads of the crowd to escape the crush.
His favourite player, however, is not from that era. It is Eric Cantona, who contributed to a video for Ratcliffe’s 70th birthday last year, along with David Beckham and Sir Alex Ferguson.
“Eric transformed the club… he had presence,” Ratcliffe explains. “He was the figurehead of Manchester United.”
Eric Cantona (Photo: Anton Want/Allsport via Getty Images)
Why now, then?
INEOS co-founder and chief financial officer John Reece gives the best answer to this question in a chapter on the company’s extraordinary growth, occasional wobbles and recent forays into more consumer-facing products such as building 4x4s, fashion and football.
“The logic was that we were very successful generating a lot of cash,” says Reece, who supports his hometown team, Doncaster Rovers of League Two, English football’s fourth tier. “(But) you need to have a bit of fun — you can’t spend your whole life in chemicals.”
Some might suggest INEOS, bored of making money from polyethylene, is going through a midlife crisis, but the importance of sport — and competition — to the company is one of the book’s central themes. While other firms offer their graduate trainees flexible working hours or subsidised food, INEOS will provide a nine-month programme to get them ready for a 320km (200-mile) hike, ride and run through the Namibian desert.
On the wall of the lift in the company’s headquarters in London, there is a giant compass covered with words and slogans “we like” in its northern half, and ones “we don’t like” in its southern half. An attempt to explain the company’s DNA, “kids and sport”, “team players” and “work hard, play hard” are all in the northern half, as are “a beer” and “northerners”.
Having spent two decades buying unfashionable businesses, factories and refineries that make essential but boring (and controversial) ingredients for other companies, INEOS has been acquiring things regular folk do notice since 2017.
A conversation about sponsoring the sports team closest to the company’s then-HQ became a decision to buy Swiss side FC Lausanne-Sport. Two years later, Ratcliffe bought OGC Nice, the French club nearest to his new home in Cap Ferrat.
In between, he teamed up with British Olympic sailing great Sir Ben Ainslie to launch INEOS Team UK, Britain’s latest attempt to win the America’s Cup and break the longest losing streak in sport, then bought serial cycling champions Team Sky, rebranding them Team INEOS.
Ben Ainslie and Ratcliffe in August 2018 (Photo: Lloyd Images/Getty Images)
He backed Kenyan distance runner Eliud Kipchoge’s successful attempt to break the two-hour mark for the marathon in 2019, then, a year later, bought a minority stake in Mercedes F1, before signing a six-year deal with New Zealand Rugby to sponsor the All Blacks, winners of two of that sport’s last three World Cups.
“You get to a point when you’ve wrestled with this business for 25 years, got great people running it, you sort of deserve to enjoy yourself and take up a few new challenges,” says Ratcliffe.
United are not his first big swing at football, are they?
No, and that is true whether you consider Nice to be a big swing or not. For what it’s worth, Ratcliffe says he wants to turn the Ligue 1 side into Champions League regulars.
It is well documented, though, that Ratcliffe tried to buy Chelsea last year when they suddenly became available because former owner Roman Abramovich was placed on the UK’s list of sanctioned individuals following his Russian homeland’s invasion of Ukraine. It is also true that Ratcliffe has had a season ticket at Chelsea, as Stamford Bridge is much handier for his London pad than Old Trafford.
He tells Barclay “we came in late, so we were culpable in that regard”, blaming the delay in joining the Chelsea auction on his busy schedule at INEOS and the company’s need to weigh up the costs and risks associated with a bid for one of football’s biggest clubs.
By the time he and his partners had decided to go for it, the “American mergers and acquisitions house” running the sale “didn’t want to know”, as it was already engaged in talks with three private equity-backed bids from the U.S., one of whom was the eventual winner, the group led by Todd Boehly and Clearlake Capital.
This means the current process at United is not Ratcliffe’s first interaction with Raine Group, as it is the aforementioned mergers and acquisitions “house”. The INEOS bid for United has been personal, professional and punctual, an approach that has been noted by Raine.
The book also reveals this is not Ratcliffe’s first visit to the Glazer family rodeo, as he and his senior team went to meet the current United owners in the U.S. before they made their “strategic alternatives” announcement last November. Exactly when this meeting took place is unclear, but Ratcliffe told Barclay the six Glazer siblings were “charming” and “all very nice, despite the press they get”.
He added that INEOS analysed United’s books but a deal seemed unlikely then, as “the club is owned equally by siblings and you can’t talk to that many siblings, really”. Fans of the hit HBO drama series Succession will sympathise.
But the book has one more — surprising — swing up its sleeve: INEOS tried to stop Barcelona president Joan Laporta, another of Ratcliffe’s business acquaintances, from pulling his “levers” to cut the Spanish club’s debts last year and instead take “two or three billion” from INEOS for a 50 per cent stake in Barca and a promise to never sell up.
“Our interest was in football alone, not making money,” he said. “We talked about it but, in the end, they didn’t think they could go to the fans with it.
“The road they are going down is a disaster. We tried to point that out and they said, ‘We know, but…’. They are all short-termers (Barcelona boards) because the president comes in, does it for five years and hands the mess over to someone else.
“They have now sold a chunk of the TV rights and merchandising rights for the next 25 years. They’ve sold them to American hedge funds. So they’ve got this big slug of cash, which they can now… waste.”
So, he is buying United for fun and ‘football alone’, not financial reasons?
For Ratcliffe, fun, football and finance do not have to be mutually exclusive pursuits, and losing money would definitely impact his fun.
This is how he describes it.
“(The United bid) is in that box of challenges,” he says. “I am not parsimonious but I have never liked the concept of economic failure. There are very few things I have done where I have ended up losing. There are things we have tried at INEOS, some investments we have made, where we were not successful and it is not enjoyable.
“Looking at Manchester United, my general view is that if we invest, even if the price tag is quite high, then in 10 years’ time, not two years’ time, we would probably be in a good place. I don’t think I am throwing my money away.”
He goes on to explain that a club of United’s stature can fund itself. This is both factually correct — and something the Glazers believe, too, although they have gone one step further by thinking United can fund biannual dividends as well, plus the interest on the money their late father Malcolm used to buy the club in 2005 — and in line with where the wider football industry wants to go: sustainability. Ratcliffe does not see the need for any United owner to “keep tipping more money into the bucket”.
Furthermore, Ratcliffe’s interest in sport has increased as INEOS’ need for publicity has grown. When INEOS was only making bulk chemicals for other businesses, he did not need billboards. But now he has decided to start selling stuff to us directly — the Grenadier, which is their take on the Land Rover Defender, anti-bacterial hand gel and so on — slapping INEOS on the jerseys of Tour de France-winning cyclists, Ainslie’s boat and Lewis Hamilton’s car has real value.
“I don’t think Manchester United would be a bad investment for us unless we were a dismal failure,” says Ratcliffe. “And if we were, then we would expect to lose money.”
Right, how is he going to fund this ‘high price tag’, then?
OK, this is the most important lesson from the book and it is also the most controversial issue among United fans.
INEOS is actually 36 different businesses, spread over 194 sites, in 29 countries. According to the book’s first chapter, which is written by Ratcliffe, Britain’s largest private company has annual revenues of $65billion (£51.2bn), with earnings before interest, tax, depreciation and amortisation (EBITDA) that have peaked at $10bn but usually range between $6bn and $8bn.
Ratcliffe, chief operating officer Andy Currie and the aforementioned Reece have built this empire via 162 different acquisitions, disposals, joint ventures, joint-venture buyouts and restructurings since 1998, and they have done it without selling a single share. Ratcliffe still owns 60 per cent of the business, with Currie and Reece having 20 per cent each.
INEOS’ Ratcliffe, middle, flanked by chief financial officer Reece, left, and chief operating officer Currie (Photo: INEOS)
So, instead of selling bits of the business to fund its growth or get it through choppy waters, they have built the world’s fourth-largest chemicals company with debt. Not scary, unsustainable, chase-your-losses debt, but 47 different fixed-term loans from major financial institutions or corporate bonds which have given INEOS the capital it has used to find undervalued assets and invest in them.
By doing it this way, Ratcliffe and his partners have retained full control of the business, avoided the often irrational and very short-term impulses of the stock market, and kept nosy analysts and financial journalists at arm’s length.
In fact, INEOS was born out of frustration with so-called experts and share-price movements, as Ratcliffe’s first big move was a chemicals business he bought from BP in 1992 using a combination of money raised by remortgaging his house and contributions from small venture-capital funds. He rebranded it as Inspec and floated the business two years later.
But the stock market did not like his decision to buy a bulk chemicals plant in the Belgian city of Antwerp in 1997, as bulk chemicals are boring, and Inspec’s share price fell. Ratcliffe, Currie and Reece knew the market was wrong, so they borrowed even more money for a management buyout to take the business private. That is the INEOS creation story.
Its gross debt is $16billion, which is a lot to mere mortals but no biggie to a business that generates that much cash, which is why the banks are still so willing to lend INEOS money. They have given Ratcliffe $15bn to invest over the past five years alone, with another $3.5bn secured for an ethylene plant INEOS is building in Antwerp. They do it because INEOS is good for it.
So, INEOS is a company that has ready access to cheaper money — and lots of it — than most other businesses or individuals can obtain, and it has a 25-year track record of growth and profitability. But, most significantly, it also has a long-standing dislike of external shareholders.
Does Ratcliffe sound like a bloke who would be willing to leave a significant chunk of United’s shares on the New York Stock Exchange, with those requirements for quarterly financial reports and investor calls? Or does his entire career suggest he would, at some point fairly soon, buy out United’s minority shareholders, including any Glazer siblings who want to stick around for a bit, and take the club private again?
Anyone who thinks the answer is the former must have read a different Grit, Rigour & Humour to the one I was sent.
OK, but can he really beat Qatar?
No. If Qatar wants another trophy asset, it wins this auction. Every time.
But, as Sheikh Jassim’s bid team keeps telling us, it isn’t Qatar bidding for United, it’s his new Nine Two Foundation. This is not a state-backed bid like the 2011 purchase of Paris Saint-Germain by Qatar Sports Investments, it is the private wealth of his family and others.
Opinions will vary on that, but we do know the Nine Two Foundation has chosen to not bury the INEOS bid beneath a mountain of Qatari fossil-fuel wealth. Instead, Sheikh Jassim, like INEOS, has ignored Raine’s recommended retail price and incrementally raised his bid from a much lower valuation to somewhere still short of what the Glazers really want.
We also know Ratcliffe’s last bid for enough Glazer shares to give him immediate control of the club, before deciding what to do about the rest of the shares, was at a higher valuation of United than Sheikh Jassim’s bid for all the shares, including those not held by the Glazers.
However, it should also be noted that the Qatari’s final, final bid possibly closed that gap to the point there is not much difference at all to the Glazers in terms of how much they get for their shares, only when they would get it, with the Qatari cheque and farewell carriage clock from Old Trafford coming sooner.
That last bid appears to have put Sheikh Jassim in front again, as it would give all those recent investors in United shares an immediate return on their heartfelt commitments to the club’s future, thereby avoiding any nasty legal arguments about minority-shareholder rights, as well as giving those in the Glazer family who want a clean break a great big wedge of cash to enjoy it.
And yet, here we are.
In the meantime, Ratcliffe has returned to the podium positions in The Sunday Times Rich List, jumping 25 places over the past 12 months to be Britain’s second-richest individual with a personal fortune of £29.7billion, up £6.1bn on 2022.
And while his ranking might continue to fluctuate, as global demand for INEOS’ wares ebbs and flows, Ratcliffe thinks his company will grow by “another 50 to 100 per cent in the next five years, given what I can see in the pipeline”.
He does not say whether Manchester United are in that pipeline or not… perhaps that is why he is giving himself so much wiggle room on the growth prediction. But let us all pray he is not suggesting this takeover saga can drag on for five more years.
(Top photo: Peter Byrne/PA Images via Getty Images)
