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.


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  • rate this

    Comment number 103.

    Indeed if you clever accountants you can use your debt to reduce your tax bill.
    Clever's one word for them - I can think of less flattering terms which are more appropriate.

  • rate this

    Comment number 102.

    18. Some Lingering Fog

    I have never really understood the middle classes eagerness to distance themselves from everyone else.

    That is until a 'middle class' author writes a book about football . . then it's all the rage.

    How easily led they are.

  • rate this

    Comment number 101.

    #52 Man Utd 4 ever

    What examples do you have of Man Utd normally overvaluing anything?
    Veron springs to mind but also Berbatov, Alan Smith and Diego Forlan - probably others, that's just top of the head.

    You do actually support Man U do you?

  • rate this

    Comment number 100.

    I wouldn't pay 2 bob for em.

  • rate this

    Comment number 99.

    I don't think anyone will buy them. 10% of Man United is Wayne Rooney. Who would want that?

  • rate this

    Comment number 98.

    should pay for a few more tattoos !

  • rate this

    Comment number 97.

    More Man U greed. I used to work for this club, what a band of slave-drivers, only interested in raking it in...

  • rate this

    Comment number 96.

    I wouldn`t touch the shares with a bargepole. Football shares have no longevity and like facebook will begin the slide downward. This is just about the Glaziers making a quick buck.

  • rate this

    Comment number 95.


    At the point Man U shares become so diluted that they are worth nothing the Glaziers will sell. The buyer if they can find one will pickup the United shares at a fraction of the price from the idiots who bought them. The clock is ticking.

  • rate this

    Comment number 94.

    Another facebook.

    As an small investor I just simply stay away from companies like facebook, man united, etc: no dividend and no share price increase in the future.

  • rate this

    Comment number 93.

    I'm a Liverpool fc fan, and even I am appalled the way glaziers and other owners are ruining our English clubs!! Time for someone to step in and bail Man u out before its too late!
    By the way...YES ...I am Also concerned about our owners John w Henry!!

  • rate this

    Comment number 92.

    What are you getting for that $2 Billion? A crumbling stadium, an ageing squad and ageing manager which will never win anything again for the next 6 years at least,$300 million debt plus another $900 million bond debt which is due in 2017 . These people need to have their heads checked.These Glazers' think they are very clever !!!!

  • rate this

    Comment number 91.

    This company is not part of the manufacturing base, not part of the infrastructure, not essential to commerce. It's a football club. Who owns the shares, how they perform, whether indeed the company and the club survive, is of very little importance. It is candy-floss. Forget about it.

  • rate this

    Comment number 90.

    Clubs like United still hold their brand name but Clubs like Barcelona are now leading. More Barcelona shirts are worn world wide. So that's where I'd put my money into.

  • rate this

    Comment number 89.

    The time for floating shares on sports teams has come, seen its day, and gone. If you think about it, sports teams are not the material of investment floats. Stock markets and sports mix like oil and water.

  • rate this

    Comment number 88.

    Overpriced,overpaid,overrated,that sums up the Premier League.A few need to go bust and some sanity brought to the game.They're all(bar a few) on the road to ruin.

  • rate this

    Comment number 87.

    Don't care at all mate, look after number 1.

    I mentioned in a previous comment of how we had made our on money on the stock exchange being a PLC, we enjoyed the riches of this, but were always in danger of a 'Glazer' type taking control of the club. Had we stayed as we were pre Glazer, we'd be fine.

  • rate this

    Comment number 86.

    You can't blame anyone for seeking the best price for their labour, when most players will be lucky to have a 15 year career. Olympics and WC's aside, the average athletics meet is watched by a few thousand of thousand. EPL is broadcast to over 600+ million people in over 200 countries worldwide.

  • rate this

    Comment number 85.

    A question 20 years in the making!

    United don't need an owner, the club would have plenty of money if it wasn't effectively having to buy itself.

  • rate this

    Comment number 84.

    "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."

    Said wealthy investor then buys up the rest of the 10% cheaply, becoming a potential takeover player to get the Glazers out of the debt hole they're in.

    They're obviously not as stupid as they look ..... good long-term strategy?


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