- Speculation puts club value at up to $5 billion
- Football has largely failed to add value for ordinary investors
- News follows Ronaldo’s contract being cancelled after interview
Manchester United (MANU:NYSE) has effectively put itself up for sale after the board confirmed that it has launched a process to ‘explore strategic alternatives’ for the club.
The New York-listed shares jumped 15% on initial reports that the controlling Glazer family might be open to a full-blown sale of the football club, and they are indicated to open another 10% higher when Wall Street reopens later today (23 Nov), implying $16.53 per share, their highest in more than a year.
Speculation has put the club’s value at up to $5 billion. Chelsea was recently sold for $4 billion.
‘As part of this process, the board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the company,’ a Manchester United statement read. The process will mean assessing several initiatives, including stadium and infrastructure redevelopment as well as expanding commercial operations globally.
‘Throughout this process we will remain fully focused on serving the best interests of our fans, shareholders, and various stakeholders,’ executive co-chairmen and directors Avram Glazer and Joel Glazer said.
FAN UNREST
That news comes after long-run fan discontent with the ownership. Supporters believe the Glazer family has stripped cash from the club at the expense of the team, saddled it with large debts and overseen years of poor operational decisions. Anger among some fans has led to the club’s sponsors being targeted, vandalism and protests outside of Old Trafford and at the homes of club board members.
Yesterday, the club confirmed that it would be cancelling the contract of star player Ronaldo following a controversial interview in which he heavily criticised the club.
Football clubs have generally been poor investments for ordinary shareholders, failing to live up to promises of vast profits from ballooning TV broadcast deals and global commercial agreements.
Manchester United was listed in New York in August 2012 at $14 a share and peaked at more than $26 in 2018. But the stock has struggled since, and as recently as July 2022 changed hands at less than $11.
POOR INVESTMENT
Other clubs have done much worse on stock markets, with Tottenham Hotspur, Southampton, Sheffield Wednesday and Millwall among UK football clubs to delist after prolonged poor share price performance.
The shares of Scottish champions Celtic (CCP) have risen from £72 to £109 since 2017, reflecting the club’s recent dominance of its domestic league. The club has won the league title in eight of the last nine years since the formation of the Scottish Premiership in 2013.
Yet Celtic’s share price performance has been far less impressive since listing on the London Stock Exchange in 1995, having at one point topped £300.
Some of Europe’s top teams have faired little better. Shares in Juventus (JUVE:MTA), listed in Italy, has fallen 57% over the past five years to €0.28, while Germany’s Borussia Dortmund (BVB:XETRA) has lost 41% at €3.50 since 2017.
Dutch champions Ajax (AJAX:EURONEXT), winners of the Eredivisie for the past three seasons, is one of the better stock performers, up 15% over five years, although like Celtic, its share price has lost value since listing in 1998, down around 8%.
