Teh One Who Knocks
08-10-2012, 12:32 PM
The Associated Press
http://i.imgur.com/ol1C0.jpg
The world's most popular sports team is getting ready to list its stock on the world's largest exchange.
British soccer club Manchester United has priced its initial public offering at $14 per share, below the $16 to $20 per share price range that had been widely anticipated. The club said Thursday that the stock will begin trading on the New York Stock Exchange today with the ticker MANU.
Manchester United is trying to pay off more of the heavy debt piled on the club in its 2005 takeover. The 134-year-old club, with a record 19 English championships, is one of the most well-known teams on the planet.
That's made its IPO a widely anticipated event. But some analysts say the debt-ridden team is overvalued and the offering is dependent on investors wearing their fan colors rather than their financial thinking caps.
"It's really trading on the level of fan interest as opposed to any sort of financial interest," said Sam Hamadeh, CEO of PrivCo, which researches privately held companies. "A winning team does not make a winning investment."
Half of the 16.7 million shares are being sold by the team, and half by the team's owner, a company controlled by the Glazer family. The team expects to get $141 million out of the deal, which it will use to pay down debt. About 10% of the team's shares are being sold.
The family's 2005 leveraged takeover was valued at $1.47 billion, much of it borrowed. United carried 416.7 million pounds ($666.2 million) in debt as of March 31. It had no debt when the Glazer family bought it in 2005.
The Glazers are a U.S. family who also own the National Football League's Tampa Bay Buccaneers. Malcolm Glazer is CEO of First Allied, a holding company with many business interests. His two sons, Avram and Joel, are co-chairmen of Manchester United.
After the IPO, the Glazers will keep control of the team through class B shares with 10 times the voting power of the stock that would be sold to the public.
The team is one of the most celebrated in the world. It claims 659 million followers and 26.9 million Facebook fans. It is especially popular in Asia, where its games are televised and its replica shirts and other products are huge sellers. But analysts are more skeptical when it comes to how viable as a financial commodity the team known as The Red Devils will be, because it is not a high-growth company like a tech start-up and is heavily in debt.
Manchester United is hoping to expand its lucrative sponsorships and licensing deals. The team sold 2 million jerseys alone last year, and in total 5 million branded licensed products. And earlier this month it announced a $559 million, seven-year shirt sponsorship agreement with Chevrolet. Commercial revenue rose 34% in 2011 to total 103.4 million pounds ($159.8 million).
But deals such as these are only one-third of the business, said Renaissance Capital analyst Nick Einhorn. The other two-thirds comes from less-glamorous broadcast and ticket sales. Those aren't as high-growth areas as commercial revenue because prices increase more gradually over time. And ticket and broadcast revenue depends on how far the team goes in English and European cup competitions.
http://i.imgur.com/ol1C0.jpg
The world's most popular sports team is getting ready to list its stock on the world's largest exchange.
British soccer club Manchester United has priced its initial public offering at $14 per share, below the $16 to $20 per share price range that had been widely anticipated. The club said Thursday that the stock will begin trading on the New York Stock Exchange today with the ticker MANU.
Manchester United is trying to pay off more of the heavy debt piled on the club in its 2005 takeover. The 134-year-old club, with a record 19 English championships, is one of the most well-known teams on the planet.
That's made its IPO a widely anticipated event. But some analysts say the debt-ridden team is overvalued and the offering is dependent on investors wearing their fan colors rather than their financial thinking caps.
"It's really trading on the level of fan interest as opposed to any sort of financial interest," said Sam Hamadeh, CEO of PrivCo, which researches privately held companies. "A winning team does not make a winning investment."
Half of the 16.7 million shares are being sold by the team, and half by the team's owner, a company controlled by the Glazer family. The team expects to get $141 million out of the deal, which it will use to pay down debt. About 10% of the team's shares are being sold.
The family's 2005 leveraged takeover was valued at $1.47 billion, much of it borrowed. United carried 416.7 million pounds ($666.2 million) in debt as of March 31. It had no debt when the Glazer family bought it in 2005.
The Glazers are a U.S. family who also own the National Football League's Tampa Bay Buccaneers. Malcolm Glazer is CEO of First Allied, a holding company with many business interests. His two sons, Avram and Joel, are co-chairmen of Manchester United.
After the IPO, the Glazers will keep control of the team through class B shares with 10 times the voting power of the stock that would be sold to the public.
The team is one of the most celebrated in the world. It claims 659 million followers and 26.9 million Facebook fans. It is especially popular in Asia, where its games are televised and its replica shirts and other products are huge sellers. But analysts are more skeptical when it comes to how viable as a financial commodity the team known as The Red Devils will be, because it is not a high-growth company like a tech start-up and is heavily in debt.
Manchester United is hoping to expand its lucrative sponsorships and licensing deals. The team sold 2 million jerseys alone last year, and in total 5 million branded licensed products. And earlier this month it announced a $559 million, seven-year shirt sponsorship agreement with Chevrolet. Commercial revenue rose 34% in 2011 to total 103.4 million pounds ($159.8 million).
But deals such as these are only one-third of the business, said Renaissance Capital analyst Nick Einhorn. The other two-thirds comes from less-glamorous broadcast and ticket sales. Those aren't as high-growth areas as commercial revenue because prices increase more gradually over time. And ticket and broadcast revenue depends on how far the team goes in English and European cup competitions.