Man United files to list on NY Stock Exchange
Manchester United announced plans on Tuesday to list on the New York Stock Exchange, an attempt to reduce debt and increase its ability to compete with wealthier owners in European football.
The record 19-time English champions hope to raise a maximum of $100 million, according to a filing with the Securities and Exchange Commission, although that figure could change before the initial public offering becomes effective.
United has been looking to raise funds to help reduce debt from the 2005 takeover that was worth 423 million pounds ($663 million) as of March 31, having previously scrapped plans to sell shares on the Singapore stock market.
United has given no details of the stock price in New York or the number of shares that will be listed, but said that it does not intend to pay dividends to shareholders.
“We intend to use all of our net proceeds from this offering to reduce our indebtedness,” United’s filing with the US government said.
The Glazer family, which bought the club in 2005, would retain control through Class B shares, which would have 10 times the voting power of the stock sold to the public.
Under the reorganisation, the team would become a wholly owned subsidiary of Manchester United Ltd., a newly formed holding company based in the Cayman Islands.
The team was listed on the London Stock Exchange from 1991 until June 2005, when the Glazers completed a leveraged buyout valued at $1.47 billion that sparked fan protests at Old Trafford.
A nearly 300-page prospectus to the SEC contains a series of warnings about the state of the club’s finances.
The filing says “our indebtedness could adversely affect our financial health and competitive position” and reduce “the availability of our cash flow to fund the hiring and retention of players and coaching staff.”
The Red Devils were on track to win their 20th league title this year, taking an eight-point lead into the final weeks of the season. But crosstown rival Manchester City, which became football’s biggest spender following its purchase by Sheikh Mansour bin Zayed bin Sultan Al Nahyan of Abu Dhabi, won the title on goal difference on the final day of the season.
“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,” United’s filing said.
United also warned that new UEFA spending restrictions “could negatively affect our business.” European football’s governing body is phasing in spending restrictions over several seasons, known as Financial Fair Play.
Under the rules, clubs have to break even from football operations, or they risk being excluded from European competitions starting with the 2014-15 season.
But the three-time European champions have been valued at $2.24 billion by Forbes magazine, ranking it as football’s most valuable club for the eighth year in a row.
And United is by far English football’s biggest moneymaker, helping to soften the impact of its debt.
The filing revealed the club received 25.6 million pounds from Nike in 2010-11 under its 303 million pound, 13-year deal with the equipment supplier, which has three years remaining, and another 5.7 million pounds as its split of the profits.
Its shirt sponsorship with the insurance company AON, which runs through the 2013-14 season, and a separate agreement with the company that runs through June 2015 guarantees 88 million pounds, up from a 14 million pound-a-year deal with AIG that ran for three years through the 2009-10 season.
New media and mobile revenue alone was worth 17.2 million pounds in 2011.
Managers of the offering are Jefferies & Co. Inc., Credit Suisse Securities (U.S.A.) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and Deutsche Bank Securities Inc.
Several other Premier League teams have US owners, including Arsenal (controlled by Stan Kroenke), Liverpool (by the parent company of the Boston Red Sox), Aston Villa (Randy Lerner) and Sunderland (Ellis Short).
The Glazers also own the NFL’s Tampa Bay Buccaneers.