Manchester United, the British soccer club which launched David Beckham, Cristiano Ronaldo and Wayne Rooney to stardom, plans to raise $100 million in a U.S. initial public offering, according to documents filed with the Securities and Exchange Commission yesterday.
Sports franchises don’t offer shares very often—the last major club to go public in the U.S. was the Cleveland Indians, in 1998, according to The Journal—and so the filing documents offer something of a rare view on how United operates as a business. A few worthwhile nuggets:
The club got about $40 million from its sponsorship deal with Nike last year, and another $32 million from Aon, the insurer whose corporate logo graces the front of United jerseys.
Broadcasting revenue was about $183 million in 2011, about 40 percent of which derived from United’s share of television rights from the Champions League, an annual tournament of the top European soccer clubs.
Management’s budget projections for future years factor the assumption that the club will fail to qualify for the Champions League once every five years.
Meanwhile, United may be owned by an American family—the Glazers, who took the club private in 2005 in a $1.45 billion buyout—and it may be offering on an American stock exchange (NYSE), but the risk factors listed on the company’s Form F-1, are decidedly international:
The Glazers are rich, but so are the oil sheiks who’ve taken an interest in European soccer:“In the Premier League, recent investment from wealthy team owners has led to teams with deep financial backing that are able to acquire top players and coaching staff, which could result in improved performance from those teams in domestic and European competitions.”
Europe is broke: “Our Matchday and Broadcasting revenue in part depend on personal disposable income and corporate marketing and hospitality budgets. Further, our sponsorship and Commercial revenue are contingent upon the expenditures of businesses across a wide range of industries, and as these industries continue to cut costs in response to the economic downturn, our revenue may similarly decline.“
Yet the oil sheiks are throwing off transfer fees like the financial crisis never happened: “Our success depends on our ability to attract and retain the highest quality players and coaching staff. As a result, we are obliged to pay salaries generally comparable to our main competitors in England and Europe.”
Manchester United had previously considered a $1 billion offering on the Singapore stock exchange; that prospective float was a bit cheeky, by most accounts, and the club canceled the IPO, citing volatile markets. The more modest offering announced yesterday—Jefferies is the lead underwriter—appears to have a better chance to score.