May 8, 2013, 12:44 PM EST
As the news about Sir Alex Ferguson’s retirement continues to reverberate around the globe, one area many will be looking at is the stock market.
With Manchester United registered on the New York Stock Exchange, the club was obligated to inform the NYSE about Ferguson’s decision to retire, which ultimately led to the news being leaked earlier than the club expected.
The news was actually announced while US markets were closed, but when trading began in New York this morning the club’s shares fell as much as 4.5%.
Since the Glazer family bought United in a controversial deal back in 2005, the debt laden club have soared to success commercially. The value of the Manchester United brand is approximately $3.17 billion. They should survive, with or without Ferguson.
However recently there has been a concerted effort by the Glazers to drive down debt, with a bond issue in 2010 raising £500m, and a 10% flotation of the club on the New York Stock Exchange raising some £150m, half of that has gone towards reducing debt.
But with Ferguson on the way out and investors watching intently as to who will replace him, should Manchester United fans worry about future financial problems?
Yes and no. On the plus side, when you scroll through Manchester United’s website no fewer than 33 different sponsors appear and commercial revenue is through the roof.
United recently posted their financial results in sales for the third quarter, a record £91.7m ($143m) was generated through sponsorship deals and Champions League revenue. The clubs debt now stands at $571 million, a lot healthier than the $1.11 billion that rose to in 2009.
But all those numbers don’t mean much, unless you have a winning team.
The Manchester United brand means winning. It has been associated with that since the early 90s, growing up in England during that time period, it seemed like you couldn’t walk down any High Street in the country without the famous “Glory, glory Man United” song blaring out, a Cantona No. 7 shirt being worn and just about every piece of merchandise you can think of adorning their Red Devil mascot.
Fred the Red, as he’s known, gets everywhere.
Sir Alex Ferguson was the main man behind all the on-field success that drove the financial success. Now he is gone, a replacement who can carry on his work seamlessly and without much upheaval is paramount to United’s success as a soccer team, and as a business. Jose Mourinho would ease concerns for United’s financial backers, while David Moyes in charge could send share prices into a spin, as investors panic about the Scotsman’s lack of experience on Europe’s biggest stage.
We can’t judge United’s commercial success over the next few years. But in 2022 we may look back and point to May 8, 2013, as the day the Manchester United brand started to go downhill.
But with Ferguson’s new role as both a director and ambassador for the club, that’s unlikely to happen. He helped build this club up, almost doubling the capacity of Old Trafford and spreading the club from the red half of Manchester to the far flung corners of the globe.
One final number. In the 1992-93 season Manchester United’s revenue was £25.2 million. During the 2011-12 season, it stood at £320.3 million. Safe to say that Ferguson has left United in a much better position than when he arrived at Old Trafford in 1986.
Now it’s up to the new guy to carry on his good work.
Mar 8, 2014, 6:20 PM EST
On his fifth team in five years, Barrett delivered Saturday for Seattle.
Mar 8, 2014, 5:33 PM EST
Late match chaos produced 2014′s first point of drama, with the veteran journeyman giving Seattle a perfect start.
Mar 8, 2014, 4:21 PM EST
Bayern dominated once again, scoring six against Wolfsburg, while Schalke proved they’re still able to dominate matches by scoring four.
Mar 8, 2014, 3:59 PM EST
Four decades of soccer in the Pacific Northwest were celebrated at CenturyLink Field.
Mar 8, 2014, 3:06 PM EST
The Rapids finally confirm the man who guided them through the preseason would replace Óscar Pareja.
Mar 8, 2014, 2:40 PM EST
Big wins for Man United, Chelsea and Cardiff on a stellar Saturday of PL action:
Mar 8, 2014, 2:35 PM EST
Sporting’s title defense begins at CenturyLink Field, with MLS’s first game of the 2014 season available on NBCSN and NBC Sports Live Extra.
Mar 8, 2014, 2:27 PM EST
Goals from Eto’o, Hazard and Ba with two hands Chelsea crucial win, as title race intensifies:
Mar 8, 2014, 1:45 PM EST
Barca could find themselves in third place by the end of the weekend, after losing 1-0 to Valladolid.
Mar 8, 2014, 1:22 PM EST
American forward Johannsson does it again, scores beauty to put AZ ahead:
Mar 8, 2014, 1:01 PM EST
The Fulham manager is convinced that his side can avoid the drop. But is that sort of optimism misplaced?
Mar 8, 2014, 12:10 PM EST
Other sides fighting the drop will be thrilled that Stoke and Norwich split the points available at Carrow Road.
Mar 8, 2014, 12:05 PM EST
Massive London derby at the Bridge, can Chelsea extend their lead at the top? Watch live, here:
Mar 8, 2014, 12:04 PM EST
Fulham remain dead last in the league after losing to fellow strugglers Cardiff – who themselves aren’t yet out of the woods.
Mar 8, 2014, 12:03 PM EST
Saints seal hard-fought win, as Eagles continue to battle at the wrong end of the table:
Mar 8, 2014, 11:32 AM EST
Moyes’ offense clicks as United turn on the style against the Baggies:
Mar 8, 2014, 9:42 AM EST
West Brom are in real danger of being relegated after losing to Manchester United at the Hawthorns.
Mar 8, 2014, 9:38 AM EST
Gunners seals FA Cup semi spot for first time since 2009:
Mar 8, 2014, 9:30 AM EST
Both Cardiff and Fulham are in desperate need of all three points – but will either manage to claim victory?
Mar 8, 2014, 9:25 AM EST
Is it a relegation dogfight or simple pursuit of safety? Check out Norwich – Stoke and decide for yourself.
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