After Facebook, Wall Street’s Next Pop IPO: Soccer Team Manchester United Going Public

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The record 19-time English champion Manchester United will be Wall Street’s latest pop IPO, as the team has filed with the Securities and Exchange Commission to list class A ordinary shares on the New York Stock Exchange. The team is the world’s most valuable – according to Forbes, they are worth $385 million more than the New York Yankees and the Dallas Cowboys. The team’s listed placeholder value for the offering is $100 million, though it is unknown how many shares it will sell and at what price. Originally, the club eyed a $1 billion IPO in Singapore last year, and was traded on the London Stock Exchange in the early nineties.

The SEC filing contains the team’s revenue for nine months, ending on March 21, 2012; that is, 245.8 million pounds, a 6.1% increase from the same time period in the year before. Forbes posits that Manchester United is worth $2.24 billion overall, ranking above the two teams tied for second – the New York Yankees and the Dallas Cowboys. The club does, however, carry considerable debt:

“We intend to use all of our net proceeds from this offering to reduce our indebtedness,” the team’s filing said. United is in debt $663 million as of March 31, 2012, with interest rates of 8 3/8 and 8 3/4 percent.

The F-1 Registration Statement includes Jefferies, Credit Suisse, J.P. Morgan, Bank of America, Merrill Lynch and Deutsche Bank Securities as the underwriters of the IPO. Morgan Stanley, originally involved, backed out after disagreements over the team’s value. The Glazer family, owners of the team, believed the team to be worth in the neighborhood of $3 billion, which Morgan Stanley believed to be too high.

Under the reorganization of the team, it would become a wholly owned subsidiary of Manchester United Ltd., a newly created holding company based out of the Cayman Islands. Who knows – perhaps part of the deal to help the world’s largest sports team get out of debt was a backroom agreement to turn their accounts into slush funds for the biggest players in global finance.

That the IPO is a risky endeavor should be clear enough. Nearly two months ago, the Facebook IPO turned into a command-and-control price fixing operation by the major financial institutions that underwrote it. Clearly, the IPO was mismanaged, and an army of emotionally driven investors were skinned of thousands of dollars. They had come to love and even be addicted to Facebook, and so, in their minds, valued it higher than it was worth.

The same holds true for Manchester United. Millions of fans would want a piece of the team, overvaluing them in the process. The high financial underwriters might be interested in sponsoring the sort of hype that surrounded the Facebook IPO, thus adding to the illusion.

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http://www.facebook.com/people/Jonathan-Maher/749383255 Jonathan Maher

As a Man United fan since birth, this all started when our former Chairman had the bright idea to float the club on the London Stock Exchange in 1991 in the middle of a recession in order to fund redevelopment of the Stretford End.
There was no need to float the club as the club had the money already and was debt free.
Anyway, in 1992 the Premier League was launched and United won the inaugral trophy the following year, the club was always successful in merchandise but the Premier League and its global appeal took United’s merchandise revenue to a all new level and so the club already popular overseas particulary Scandanavia, the club began to expand its commercial revenues to a new level, the team visited new markets previously untouched by English football e,g, South Africa, China and North America.
With on field success continuing throughout the 1990′s culminating in the team wining the Treble the popularity of the team and the club expanded, at the same time as did the stock which was gradually being bought by Cubic Expression ( Irish racehorse owners with links to Sir Alex Ferguson the team’s manager and a keen racehorse owner) and the Glazeer family.
After a dispute with the manager Cubic Expression sold out to the Glazer family owners of the Tampa Bay Bucanneers and renowned for their levarged buyout of the NFL franchise… they bought United in 2005 in a highly leveraged buyout much to the anger of the fans… dumping the debt on the club restricting its ability to compete in the transfer market for top class players. Fortunately for the Glazer’s, Sir Alex maintained the club’s success with skillful blending of new and experienced members of the team, a successful youth setup, worldwide scouts and worldwide popularity Sir Alex has been able to buy up and coming quality players cheaply and able to sell quality players surplus to requirements for considerable high transfer fees e.g. Christiano Ronaldo to Real Madrid for £80 million.
The Glazer’s have been unable to match the ambition of the fans demands for top quality players whilst trying to pay down the debt during the Great Depression.
Hopefully the stock isn’t as overpriced as it was in 1991, I should know I bought 50 shares, anyway as a fan it was more sentiment rather than profit.
As our former chairman Martin Edwards sold the club to the Glazers in 2005, he decided to invest some £8million to a convicted fraudster Michael Brown, who gave the largest political donation of some £2.3 million to the Liberal Democrats,(now in a coalition government) who refuse to hand back the money to Martin Edwards and fellow investors, these investors are now taking part of the government to court for accepting stolen money!