Manchester United lowers stock float value

Manchester United executives ring the opening bell at the New York Stock Exchange Manchester United executives rang the opening bell at the New York Stock Exchange

Manchester United has been forced to cut the value of its share flotation in New York.

The football club said it would sell shares at $14 each, below the $16-$20 range that it announced just weeks ago.

The club is selling shares representing 10% of the club, which will raise $233m (£150m) to pay off some debt, below the $333m hoped for.

The shares will begin trading shortly on the New York Stock Exchange.

The exchange's opening bell was rung by executives from the club, and some traders wore the club's shirts.

'Priced to fail'

The lowering of the debut share price suggests the club could not find buyers at the higher prices.

The shares will pay no dividend, and some analysts say that floating just 10% of the club does not give institutional investors enough of a return opportunity.

"I don't know who will buy these shares," Mike Jarman, chief market strategist for H20 Markets - a former professional footballer and a Manchester United fan himself - told the BBC.

"Maybe a few hedge funds will take a small punt of $5m-$10m, which if it goes bad, they can easily write off. But it's not going to be a long-term investment for those guys.

Start Quote

It is a testament to the strength of Manchester United as a football club and its popularity internationally, that they have managed to do this well”

End Quote Stefan Szymanski University of Michigan

"Maybe for some super wealthy Asia or Russian investors having a slice of Man U in the portfolio is a bit sexy... but the deal is priced to fail."

Pete Hackleton, a partner in the London office of accounting firm Saffery Champness who specialises in the sport and entertainment businesses, agrees.

"If you are wealthy and want to buy a football club then I can see the attraction, but I don't know of any interest in the deal - and most football clubs that have floated are now back in private hands," says Mr Hackleton.

"UK fans will mostly still be wondering what will be done with the cash from the deal and how much of it will go to the club."

But Stefan Szymanski, an expert in sports economics from the University of Michigan, told the BBC that even with the lower share price, Manchester United is still "the most valuable sports franchise in the world, and the American investors are looking at this as a franchise".

"Given the way they have tried to sell this off, with no voting rights, no dividends, and limited disclosure [of financial information], it is a testament to the strength of Manchester United as a football club and its popularity internationally, that they have managed to do this well," he said.

Overseas expansion

In its prospectus, the 134-year-old club outlined its success on the pitch and the size of its fanbase, which generated a total global audience of four billion viewers in the 2010-11 season. Much of its future strategy is based on exploiting opportunities outside of the UK.

Start Quote

We have made it clear that on the Glazers' terms, the share sale is a bad deal for fans, investors and the club”

End Quote Manchester United Supporters Trust

The club said its commercial revenue had grown from £66m in 2009 to £103m in 2011, thanks to sponsorship and merchandising deals.

It made a profit of £13m on continuing operations in 2011. It estimates that it will have made profits of £23m in 2012, but this includes a tax credit of almost £30m. Without that it would have made a loss, it said.

The Old Trafford-based firm said it intended to increase revenue and profits in coming years from sponsorship deals, sales of Manchester United branded products, broadcasting rights and improving its new media and mobile offerings.

It has opened an office in Asia to try to attract new sponsors there, and is in the process of opening another one in North America.

It already has retail shops in Singapore, Macao, India and Thailand to try to capitalise on its popularity in Asia, and intends to open more in the coming years, the club said.


Some supporters had hoped that the money raised by selling shares in the club would all go towards reducing the debt load.

A statement from the Manchester United Supporters Trust (MUST) criticised the money-raising plan: "We have made it clear that on the Glazers' terms, the share sale is a bad deal for fans, investors and the club.

Manchester United fans Manchester United has a huge global fan base that they are seeking to capitalise on

"For the club, this is a bad deal because more than half of the funds raised will now be paid direct to the Glazer family, with a smaller portion being used to pay down some of their debt which they have saddled the club with since 2005."

Earlier this month, MUST called for a boycott of the club's sponsors in protest at the planned share issue.

It said this was intended to send "a loud and clear message to the Glazer family and club sponsors that, without the support and purchasing power of the fans, the global strength of the Manchester United brand doesn't actually exist".

High debts

Manchester United has been controlled since 2005 by billionaire US sports investors the Glazer family, which paid £800m for the club.

They also own the Tampa Bay Buccaneers American football team.

The shares will begin trading in New York on Friday under the ticker name Manu.

It estimates that as a result of the share sale it will be able to reduce its debts from £423m to £345m.

Sir Alex Ferguson, the manager, recently denied speculation that he stands to benefit financially from the imminent share flotation, after reports that club employees would benefit from a share incentive scheme.

"There is not a single grain of truth in this allegation," he said in a statement.

The Premier League giant came second last season and has won a record 19 titles.


More on This Story

The BBC is not responsible for the content of external Internet sites


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 83.

    @ 23. Typical_English_No8

    "United need a 'money is no object' owner, and Glazer needs to sod off."

    ^ this, this right here is what's wrong with football!

  • rate this

    Comment number 82.

    What the heck is a football team doing being floated on the stock market? This is wrong on so many levels, and stupid.

  • rate this

    Comment number 81.

    #79 the obvious comparison is between the footballers and the Olympians. While the actual Olympics may be horribly commercial little of that money makes it to the athletes.... the same is not true for premier footballers. Much of the debt these clubs have piled up comes from paying massive transfer fees and lottery win salaries to the players.

  • rate this

    Comment number 80.

    Even the Economist have stated in no uncertain terms that this flotation makes no economic sense whatsoever for the invester.

    The Glazers surrender no voting rights and these are second class shares with little prospect for an increase in value or a share of a dividend.

    They said only fans should apply. For me, if you're a real 'fan', you don't give the Glazers any more money.

  • rate this

    Comment number 79.

    I wish poeple would stop the ridiculous comparisons between football, and the Olympics. Yes football is terribly corporate, but there are no sponsers for the Olympics, right? There is not commercial fascism in and around the Olympic Park?

  • rate this

    Comment number 78.

    Sorry Utd fans, your club is being stuffed by the Glazers yet again. No doubt those shares will drop in value and instead of helping your club could very well result in more debt rather than less.

  • rate this

    Comment number 77.


    every footballer in the team is over valued

  • rate this

    Comment number 76.

    I assume the request to their banks to please lend me some more interest free money without security failed , so they decided to ask the markets for the same. You'd have to be fan or a fool to invest at the prices and terms they are asking.

  • rate this

    Comment number 75.

    Aren't you buying a debt purchasing shares in Man Utd ?

    These Americans have turned one of the greatest clubs in the world to a debt ridden business.

    They dont care about football, they have no passion for it.

    And just what is their reason for keeping half of the monies raised ?

    Wake up before you buy , just look at Facebook floated at $38. Todays valuation $21

  • Comment number 74.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 73.

    This has nothing to do with sport - only Americans making money out of a business. I don't know anyone who has ever had thier company or business bought by a US organisation and ended up better off.The usual story is all the UK management team dissapear within 6 months - then the most of the work gets transferred to US

  • rate this

    Comment number 72.

    67. Peter_Sym

    ah well now youve started bandying figures about to support your stance, my mortgage is a quarter of that and my property is worth more. There was a Uni campus closed down in Cumbria last year throwing quite a few staff out of work. Whichever way you pull and twist it - youre liiving beyond your means.

    Oh and by the way, MPI isnt indefinate. its usually time limited.

  • rate this

    Comment number 71.

    Just watching the American analyst (or what ever he was) talking about the "Man U" brand further displayed how far removed the top of the sport if now from the people that made it in the first place.

    How many of their season ticket holders are from the Salford area anymore?

  • Comment number 70.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 69.

    I have nothing agianst utd, but I really hope this goes belly up. Sport is sport, if owners want to gamble and operate investment engines and hedge funds they should split out the sports trading from the riskier business arms (same way that banks are slowly seperating retail vs investment banking). Using a club, however wealthy, to essentially guarantee personal debt is NOT good for business.

  • rate this

    Comment number 68.

    People talk about how football is 'no longer a sport', footballers are overpaid celebrities etc - there is more to football than the 4 teams in the 'Champions' League every year. The biggest have been run more like corporations than clubs for years now but many smaller clubs are still community orientated.

    Man Utd are the flagship 'corporate club'. I hope the Glazers fail and the fans win.

  • rate this

    Comment number 67.

    #63 I have mortgage protection insurance & ONLY borrowed 3x my salary on a 90% mortage. I could have got 4x at 100% at the time. If you think a £100,000 mortage is unrealistic I wonder where you live.

    I'm a university research scientist by the way, hence I NEED to borrow to buy a house.... I don't have 6 figure sums just lying around.

  • rate this

    Comment number 66.

    the comparison Olympics-Football I don't think is fair. Footballers are overpaid because they attract a lot of money. Few footballers start off their careers on £££ contracts, most start from modest backgrounds and have sacrificed just as much as your Olympic heroes. The payoff is different, sure, but then I don't see why their hard work and toil should be discredited because of that.

  • rate this

    Comment number 65.

    The share price will be lucky to be 10 p at Christmas.

    Why is old Rudolph Red Nose signing so many short players these days. Can he not look up at players taller than him any more, or is he looking for trophies at the midget olympics?

  • Comment number 64.

    This comment was removed because the moderators found it broke the house rules. Explain.


Page 3 of 7


More Business stories



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.