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Henry Mauriss says he was ‘at the finish line’ to buy Newcastle. Will Sheffield United be different?
Adam Crafton and
Matt Slater
Jun 2, 2022
Henry Mauriss is an American businessman who has lodged a £115-million takeover bid for the Championship club
Sheffield United yet, to many within the football industry, the source of the funding and how that would impact the club remains something of a mystery.
On April 21 this year,
The Athletic revealed that
the English Football League (EFL) is reviewing Mauriss’ offer as he attempts to purchase Sheffield United from the Saudi Prince Abdullah bin Mosaad bin Abdul Aziz Al Saud. The deal is subject to the EFL’s owners’ and directors’ test and Mauriss needs to satisfy the EFL by demonstrating the source and sustainability of his funding.
Mauriss has told
The Athletic that he has “provided evidence of sufficient resources already, which has led the EFL to proceed with the remainder of its normal fit and proper examinations”.
Mauriss’ period of exclusivity has lapsed, although talks over a takeover are ongoing between his representatives and Sheffield United.
With his potential takeover of the Championship club still live, for the first time we can chronicle the intimate details of Mauriss’ previous attempts to purchase
Newcastle United, which may be of interest to those watching this latest bid take shape.
Sheffield United’s Enda Stevens celebrates scoring against Fulham in May (Photo: James Williamson – AMA/Getty Images)
At Newcastle, for example, we have seen evidence to say advisors to former owner Mike Ashley grew tired of the repeated delays, while Mauriss also appeared to explore the possibility of taking high-interest loans to purchase the club, as well as the potential of taking investment from an Emirati fund chaired by Sheikh Khaled, who is a distant relative of
Manchester City’s majority shareholder Sheikh Mansour. A consortium led by
Saudi Arabia’s Public Investment Fund ultimately
purchased Newcastle for around £305 million last October.
Mauriss has insisted, on the record, that this takeover will not be leveraged as a loan against Sheffield United and he insists there will not be a minority partner. The deal, he says, will instead be funded via a bond for his company ClearTV Media, which will need to be repaid in time.
As a result, we submitted a number of questions to Mauriss, and publish several documents within this article, so that football supporters are fully aware of what may lie ahead for a prized community asset in Sheffield United, and to ask whether the delays and eventual failure of his Newcastle takeover may be repeated once more.
What is the state of play at Sheffield United?
Sheffield United are currently owned by
Saudi Arabia’s Prince Abdullah bin Mosaad bin Abdul Aziz Al Saud. He bought 50 per cent of the club in 2013 before assuming full control in 2019 after
winning a legal case against Kevin McCabe, who owned the other 50 per cent. The club recently spent two years in the
Premier League before dropping back into the Championship, where they finished fifth last season and lost out on promotion via the play-offs.
Prince Abdullah meets fans at Bramall Lane in 2013 (Photo: Anna Gowthorpe/PA Images via Getty Images)
Prince Abdullah is open to selling the club and is said to be particularly pleased by the £115 million valuation of Sheffield United. Under the multi-club
United World Holdings structure, he also owns Beerschot in Belgium, LB Chateauroux in France, Al-Hilal United in the UAE and Kerala United in India. This proposed takeover would solely be for Sheffield United.
Representatives of Mauriss attended Sheffield United games towards the end of the season but initial discussions began late last year before the framework of a price was agreed in January. Sources close to the takeover, on both sides of the deal, insist that while the American’s exclusivity period has lapsed, he still wishes to buy the club despite the team failing to reach the Premier League. Additionally, Mauriss has earmarked Stephen Bettis, the club’s current chief executive, to continue in his role if the takeover is successful.
Just how wealthy is Mauriss?
This is where it becomes unclear. For context, Mauriss is based in California and he owns a company called ClearTV. As ClearTV is a private company, it is difficult to know the true extent of Mauriss’ wealth. There is very little of note beyond the company’s website and some press releases online that details the work of ClearTV.
The Athletic has seen brochures promoting the company that say that the firm is headquartered in Los Angeles and “owns and operates a proprietary television platform that delivers highly relevant content to targeted audiences inside airports & healthcare venues (hospitals, et al)”.
The presentation says that “ClearTV is partnered with the the highest rated television networks and online producers in the industry”. Between the brochure and his website, they claim these include extremely famous brands, including Bravo, Sony Pictures, CBS Sports, AXS.TV, PGA Tour, Cooking Channel, ABC, Reuters, CNBC, VH1, History Channel, WSJ, Weather Channel, AMC, Disney, 20th Century Fox, NBC, Universal, the BBC and many more.
ClearTV boasts a host of partners on its website (Photo: ClearTV Media Ltd)
While answering a series of questions posed by
The Athletic, Mauriss insisted that, “ClearTV enjoys over 240 content partnerships with major networks, broadcasters, cable and digital content providers.”
Yet when we contacted all of the companies listed above to ask if they do indeed have partnerships with ClearTV, most did not reply, not one responded affirmatively and two replied to say they are not aware of any partnership at all. When informed of this, Mauriss provided correspondence involving two companies — one of which had previously told
The Athletic they were not aware of a partnership — which suggested there are active relations.
Haven’t we heard Mauriss’ name before?
Certainly if you are a Newcastle United fan. In late 2020 and, at various points in 2021, it was widely reported that Mauriss had made substantial attempts to buy Newcastle from the club’s then owner Ashley, before the club was eventually
sold to the Saudi Public Investment Fund, as well as its partners PCP Capital and the Reuben brothers, in October 2021.
But it went so far with Mauriss that his company, ClearTV, twice offered to enter into £250,000 exclusivity periods with Newcastle, payable to MASH Holdings, which is essentially Ashley’s business empire. The second exclusivity period was proposed on January 30, 2020. Mauriss offered to buy the club for £330 million and a 10 per cent deposit would have been immediately payable upon the exchange of contracts.
Yet
The Athletic has seen various pieces of correspondence and documentation that appears to cast doubt on Mauriss’ capacity to complete the takeover.
For example, Justin Barnes, an advisor to Ashley, wrote to Mauriss on January 16, 2020 to state that both he and a second advisor — the broker (and convicted fraudster) Chris Ronnie — had been “extremely patient”. He went on to argue that it was only Ronnie’s proactivity that stopped Ashley’s team from feeling “too frustrated” to make the process worth continuing. He also stated his surprise to have reached “such a detailed acquisition mode when the money was not in place”. This, he pointed out, was after a previous longstop had passed on December 18, 2019.
Mauriss countered to
The Athletic that he, too, was frustrated. He said: “There was a lot to be frustrated over. At moments when we believed we were finally ready to close, a new obstacle would emerge to delay it. Many of these obstacles were caused by the seller, including a third flirtation with Amanda Staveley and her Saudi friends. That caused a delay of many, many months. Along the way, a number of long stop dates were adopted and missed; movements caused by both parties.”
Amanda Staveley and Mehrdad Ghodoussi fronted the successful bid for Newcastle United (Photo: Serena Taylor/Newcastle United via Getty Images)
Mauriss says Ronnie is now working on the Sheffield United bid. Ronnie has been appointed as “lead local executive, to champion the management of legal and financial diligence, and of the sourcing of local executive talent”.
Ronnie, the former chief executive of sportswear firm JJB Sports, was sentenced to four years in prison and banned from being a company director for eight years when a jury unanimously found him guilty of taking around £1 million in backhanders and attempting to cover up his crime in 2014.
Despite the concerns of Ashley’s camp, Mauriss did persist with his efforts to buy Newcastle.
The Athletic has seen a draft document, dated February 7 2020, written by the American investment firm MSD partners. It is titled “senior secured term loan” for ClearTV Media UK, which was the company owned by Mauriss and the vehicle through which he would purchase Newcastle.
This document demonstrates a proposal for the takeover of Newcastle United, which would have featured a £150 million loan from an affiliate of MSD Partners. This was laid out for “discussion purposes” as of February 7 2020, and it included a rate of 7.5 per cent interest per annum, rising to 8.5 per cent in the event of relegation to the Championship and defaulting altogether in the event of relegation to League One. The interest is also “plus LIBOR” (essentially the global reference rate for unsecured short-term borrowing in the interbank market), which tends to add an extra percentage point as well.
The loan was proposed to be secured against the club, the stadium, the training ground, players and all other assets. The club’s parachute payments, in the event of relegation from the Premier League, would also become mandatory prepayments under the terms outlined.
Parachute payments are essential for relegated clubs as they receive 55 per cent from the central distribution that every Premier League club receives during their first season after relegation in the EFL and they also bank 45 per cent in year two. If a club has been in the Premier League for more than one year, they take 20 per cent in year three.
In the 2018-19 season, for example, this would have constituted payments of £43 million, £35 million and £16 million respectively, which would be essential funds to allow a relegated club to balance the books and spend on a promotion charge.
The Athletic asked Mauriss, therefore, whether a proposed takeover of Sheffield United would be funded via a loan with interest rates in any way comparable to those proposed for Newcastle United. Additionally, he was asked whether he would contemplate a loan for Sheffield United that would default in the event of relegation to League One or League Two. We also asked whether any future parachute payments may be vulnerable to loan repayments under his proposed takeover.
Mauriss, in response, confirmed to us that he had been speaking to several potential “minority participants” when attempting to buy Newcastle and he said that “MSD was one such offeror, which proposed a debt contribution that I thought was too expensive and constraining”.
He added: “We have not spoken with MSD or anyone associated with Dell since that term sheet was sent to us. And as we approached Sheffield, we did so only as a cash purchase, and with no outside parties playing a role in financing it. To this day, we have spoken with no outside funding sources, and intend for this purchase to be done in cash, unencumbered.”
What does this have to do with a relative of Sheikh Mansour?
It was not only MSD who appear to have attempted to join Mauriss in purchasing Newcastle.
Take, for example, a document dated April 16, 2020 and a piece of correspondence addressed by Midhat Kidwai to Ashley’s advisor Barnes. Kidwai is the group managing director of the Bin Zayed Group in Dubai, chaired by Sheikh Khaled, who is reported to be a relative of Manchester City’s owner Sheikh Mansour.
Khaled had previously failed in a £2-billion bid to buy
Liverpool in 2018 as well as with a £350-million bid to buy Newcastle in 2019. Kidwai met Liverpool chairman Tom Werner in New York for discussions but the proposal never reached the stage where majority shareholder John W. Henry spoke to the Emirati businessman.
The Athletic previously reported first how
Sheikh Khaled and Kidwai sought and failed to buy Derby County.
Now, for the first time, it can be revealed that the group were, it seems, interested once again in investing in Newcastle — this time in joining in the purchasing of the club with Mauriss in April 2020.
Kidwai wrote in the document that the Bin Zayed Group had “on account the sum of £33m in immediately available funds” to assist ClearTV’s acquisition of St James Holdings. He added that “this will also confirm a discrete partnering is being finalized here with ClearTV”.
Mauriss said: “We had taken a few calls from Bin Zayed, and if memory serves, they may even have given us a term sheet offering to fund a portion of the deal. We didn’t accept that one, and haven’t spoken with anyone from the Bin Zayed camp since then.”
When contacted by
The Athletic, Kidwai said: “Myself or Bin Zayed have nothing to do with this, if someone has shown you my signature rest assured it is not real. If it was, I would say so clearly.” When shown the document, he added: “To be very clear and (for the) final time, we have nothing to do with this Henry Mauriss. I never ever met or know (him).”
Additionally, multiple sources close to the Newcastle takeover recall discussions at one stage that implied Mauriss may join forces with Qatar Sports Investment (QSI), which is the sovereign fund that owns French club Paris Saint-Germain, but that talks never reached an advanced stage. Sources close to QSI insist that
PSG president Nasser Al-Khelaifi was never involved.
So, if Mauriss insists there is no loan or partner, how will he fund the takeover?
The first thing to say is that the cost of Sheffield United is almost a third of the £330 million proposed deal to buy Newcastle. If a Mauriss takeover bid is to happen without external involvement, then it will instead be funded via a bond.
There are several ways for the owners of companies to raise money. They can ask their partners, if they have any, to put in more cash via loans or a share issue. Or they can sell shares to new investors, swapping money for a smaller stake in the business. Or they can just borrow it, and when they do there are two options: bonds or loans. The former is what most private companies opt for, as they usually provide the required cash at lower interest rates and with fewer restrictions from the lender.
A bond is basically an IOU (a document that acknowledges the existence of debt) with a fixed term, known as a maturity date, and usually — but not always — a fixed interest rate, known as a coupon. In theory, anyone can buy a bond but, in practice, they are usually bought by banks.
