Perils of a sports team float: shareholders snarl as Man U signs star player

UPDATE AUG 18: The perils of a public float for a sports team have been laid bare over the past two days.

Manchester United fans welcomed the signing of Dutch striker Robin van Persie.

Wall Street was not so impressed by the amount apparently required to lure the Dutchman from Arsenal.

Manager Alex Fergusson refused to reveal details of van Persie's contract, but the Telegraph report implied he could be paid more than ?200,000 a week.

Manchester United [NYSE:MANU] fell 5.48% on the New York Stock Exchange to $US13.42.

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NYSE float confirms Manchester United as world?s most valuable team

AUG 11: Manchester United's shares closed at $US14 on the New York Stock Exchange Friday (Saturday NZ time).

The NYSE listing fell below hopes of $US16 to $US20 a share.

The 10% float raised $US233 million, around half of which went to the Florida-based Glazer family, which bought Man U for ?790 million ($US1.25 billion) in 2005.

The Glazers, who also own US grid iron team the Tampa Bay Buccaneers,?borrowed around $US850 million to finance the highly leveraged deal.

Many fans opposed the float. A vanity owner like Russian billionaire?Roman Abramovich, who owns Chelsea, is seen as being willing to plough all funds back into the club in a bid for title glory. The Glazers will now have to answer to shareholders who also have an eye on the bottom line (in 2011, Man U?made a pre-tax profit of ?29.7 million, compared with a loss of ?15 million in the previous year. Revenue increased ?45 million to? ?334.1 million).

The Glazers had hoped the partial float would raise $US333 million, but even at $US16 a share it was still enough to value the club at $US2.3 billion, maintaining its number one position on Forbes' list of the world's most valuable sports teams (compiled on July 16; all $USD):?

• 1 Manchester United ($2.23 billion [post-float $US2.3 billion])
• 2 Real Madrid ($1.88 billion)
• 3= New York Yankees ($1.85 billion)
• 3= Dallas Cowboys ($1.85 billion)
• 5 Washington Redskins ($1.56 billion)
• 6= Los Angeles Dodgers ($1.4 billion)
• 6= New England Patriots ($1.4 billion)
• 8 Barcelona ($1.31 billion)
• 9 New York Giants ($1.3 billion)
• 10 Arsenal ($1.29 billion)
• 11 Bayern Munich:?$1.23 billion
• 12 New York Jets ($1.23 billion)
• 13 Houston Texans ($1.2 billion)
• 14?Philadelphia Eagles ($1.16 billion)
• 15 Ferrari F1 $1.1 billion

See Forbes full top 50 here.
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Source: http://www.nbr.co.nz/article/perils-sports-team-float-shareholders-snarl-man-u-signs-star-player-ck-125630

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