Over 16 million shares in Manchester United are now available for sale on the New York Stock Exchange. The sale of around 10% of the club will take the form of 16,666,667 Class A Ordinary Shares at a price of $14.00 per share. Manchester United is offering 8,333,334 Class A Ordinary Shares and the selling shareholder is offering 8,333,333 Class A Ordinary Shares.
The IPO price was down from the $16 originally estimated by the club. The proceeds from the sale will be split equally between the Glazer family and the club with much of the club’s money thought to be destined to pay down debt.
Manchester United was purchased in 2005 for around £800 million by the American Glazer family, who had made their fortunes in property. The family has experience of sports club ownership – Malcolm Glazer bought the Tampa Bay Buccaneers in the late 1990’s for $192 million and installed his three sons in the club in charge of financial affairs.
Fans of the football club have baulked at the new share sale, claiming that it represents an attempt by the Glazers to cash out of their soccer purchase. Manchester United Shareholders’ Trust said on 8th August, two days before the IPO:
“We have made it clear that on the Glazers’ terms, the share sale is a bad deal for fans, investors and the club. 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. For fans, it is a bad deal because it is a missed opportunity for more equitable ownership of our club, with proper distribution of voting rights; and by floating shares at this inflated price, it provides a poisoned pill which might deter any more enlightened owners from buying the club in future.
“Yet above all this share sale is a bad deal for investors – to whom we’d say ‘buyer beware’. Not only are the shares overpriced, coming with minimal voting rights and poor corporate governance – but we are highly doubtful of the misleading marketing claims of the club’s management, upon which their highly ambitious float price is predicated.
“The club is claiming that 659 million people – one in ten of the world’s population – is a United follower. To put that in context, Facebook has 901m users. While we’d love to think so, in reality I doubt if one in ten people in Stockport, let alone Jakarta, supports United actively to the extent they would pay money to the club. The club should justify that figure and clarify how it is counting ‘fans’ and ‘followers’.
“Secondly, we feel the club should give proper guidance on ticket sales. United season ticket holders and members who have been contacted by the club recently will know it has had to try harder than ever before to sell tickets – not least because of the economic situation, and the inflation busting price rises particularly under the earlier years of the Glazers’ ownership. Match-going United fans continue to be the commercial lifeblood of the club, but we will not have our loyalty milked so contemptuously forever – and we are sure broadcast partners and investors will not want to see empty seats in Old Trafford this season. Again, we’d like to see the club come clean on its claims.”
Juventus and Ajax are also listed on the stock exchange. Ajax is currently trading at €7 per share and Juventus at €0.19.