What 'drag-along right' means for Sir Jim Ratcliffe at Manchester United?

Jim Ratcliffe has a 25% stake in Manchester United.

There may come a time when Sir Jim Ratcliffe will have to sell his Manchester United stake and won’t be able to do much about it. That is, after a little over a week, a condition in the agreement that allowed him to invest in the Red Devils went into effect.

After purchasing 25% of Manchester United for £1.3 billion in February 2024, the INEOS head subsequently began restructuring the club. Despite the team’s 15th-place Premier League finish last season, Ratcliffe has managed layoffs, a shift in the club’s sporting hierarchy, and an effort to create a foundation for success.

What the drag-along right could mean for Sir Jim Ratcliffe at United?

The clause referred to as the “drag-along right,” although it is not a term used in football, the clause is so ubiquitous in the business sector that they have three different names.

According to Mail+, a “drag-along right” went into effect on August 13 at United. That implies that Ratcliffe will have to join the Glazers if they ever decide to sell the club, with INEOS having little influence over the decision. The only way Sir Jim Ratcliffe could avoid the sale of the club would be by matching the buyer’s deal.

By eliminating situations in which a minority shareholder might thwart a deal when the majority wants it to proceed, such clauses allow a company to be sold. In this case, the condition ensures that the Glazers have some control over the billionaire’s interest as well. The clause went into force eighteen months after Ratcliffe made his investment.

Ratcliffe is well aware of it, and he even seemed to make reference to it when he announced his investment. “I don’t think we’re going to be taking the legal agreements out of the bottom drawer,” he stated.

There doesn’t seem to be much of a desire to profit from the club right now. The parties appear to get along well. The majority owners are rumoured to have acknowledged that INEOS has done the grunt work of rebuilding the team and relieving some of the Glazers’ pressure while simultaneously handling football-related issues.

As of right now, it seems that the most likely potential buyer is not eager to benefit from the clause. Ratcliffe’s bid for a share in the Premier League club was successful before Sheikh Jassim bin Hamad al-Thani made an attempt to purchase it.

Despite being aware of the circumstances, Sheikh Jassim of the 92 Foundation is reportedly not interested in going back at this time.

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