Personal Finance

Man Utd shares: should fans buy 5% stake sold by Glazers?

The Glazer family, Manchester United’s controversial US owners, have announced plans to sell eight million shares – five per cent of the club – on the New York stock exchange in a move expected to net $150m (£88.7m).

It won’t be the first time the family has sold shares in their prized British asset. In 2012 they sold ten per cent of the club, raising up to $330m (£210 m) in the process.

How much will shares cost?

Shares in Manchester United closed yesterday at $19.31 apiece, the BBC reports, down 11 cents for the day, but no price has yet been set for the shares being released.

Is Man U a good investment?

Manchester United’s value is intimately linked to the team’s performance on the pitch. Last year’s failure to qualify for the Champion’s League cost the club £35.5m in revenue from Uefa, the Daily Mail estimates.

But that loss was offset by the ten-year kit sponsorship deal with Adidas announced earlier this month, worth an initial £750m from 2015. General Motors have also signed up to pay approximately £330m over seven years to place the Chevrolet logo on shirts.

Making matters more complicated for the club is the fact that the Adidas deal continues to hinge on the fortunes of the club. The sportswear company’s annual payments will drop by 30 per cent from £75m to £52.5m if United once again fail to qualify for the Champion’s League. Conversely the fee could rise by up to £4m each year if the team wins any of the major trophies – the Premier League, the Champions League or the FA Cup.

Does buying shares come with any perks?

Each share comes with a small voting privilege, which will notionally allow new shareholders to have a say in how the club is run. But even after the latest sale, the Glazer family will own the majority of shares, so they will continue to be free to govern the club as they wish.

Also, the voting rights attached to the Class A stock the Glazers are selling are “worth a fraction of their Class B shares, which have ten votes per share compared to Class A shares that give owners one vote,” Bloomberg notes. So don’t expect to be able to sack the manager or free up money to buy new players after you have bought shares.

If fans buy enough shares, can they boot the Glazers out?

Even after the stock is sold, the late Malcolm Glazer’s six adult children will still control more than 80 per cent of the club, so the short answer is no. But that is not necessarily a bad thing for potential investors. As one reader of the Manchester United fan forum, Talking Reds, recently wrote: “We are dealing with business men who have a good knowledge base of running a sports brand and have done so fairly successfully. I for one would prefer The Glazers to leave but they are not going anywhere soon.”


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