May 8, 2013, 12:44 PM EDT
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.
Apr 17, 2014, 12:24 AM EDT
Week one of the NWSL season sees Seattle atop of the league, but an import from Spain snagged her own headlines for Western New York.
Apr 16, 2014, 10:22 PM EDT
It took six-and-a-half weeks, but last year’s Supporters’ Shield winners have their first victory of the season.
Apr 16, 2014, 9:40 PM EDT
Three matches the shoot up the title, Champions League races:
Apr 16, 2014, 8:57 PM EDT
One location is the clear favor for No. 24, but down to one slot, the competition could pick up.
Apr 16, 2014, 7:57 PM EDT
Like his players, City’s boss has plenty of questions to answer after Wednesday’s disappointment.
Apr 16, 2014, 6:52 PM EDT
If Atlanta, Miami aren’t good sports towns, it may not matter. The doubts critics have cast on the league’s Southeast excursion may be irrelevant.
Apr 16, 2014, 6:29 PM EDT
Top four hopes over for Everton?
Apr 16, 2014, 5:40 PM EDT
Real win Copa del Rey as Barcelona’s bad run continues:
Apr 16, 2014, 5:26 PM EDT
One more spot in MLS’s planned expansion is gone, with Atlanta set to begin play in 2017.
Apr 16, 2014, 4:52 PM EDT
Two late goals gave Sunderland a lead, one City pulled back just before full-time.
Apr 16, 2014, 4:51 PM EDT
Eagles soar to safety, but Everton’s Champions League dreams are in ruins:
Apr 16, 2014, 3:37 PM EDT
Two of Serie A’s most productive scorers may not be at this summer’s World Cup. Llorente wonders why.
Apr 16, 2014, 2:56 PM EDT
Which Liverpool player picked up the Player of the Week accolade?
Apr 16, 2014, 2:44 PM EDT
Both sides look to cash in on matches in hand at the Etihad.
Apr 16, 2014, 2:25 PM EDT
Can Tim Howard and the Toffees win their eighth-straight game? Watch live online, right here:
Apr 16, 2014, 2:00 PM EDT
Having MLS teams share their home with NFL sides could be a smart move ahead of the next wave of expansion:
Apr 16, 2014, 1:28 PM EDT
Find out who made the PL Team of the Week, right here:
Apr 16, 2014, 12:35 PM EDT
Two PL matches take place on Wednesday, with both set to impact the top and bottom of the standings:
Apr 16, 2014, 12:04 PM EDT
Are you ready to get ‘Duff-ed?’
Apr 16, 2014, 11:15 AM EDT
Watch all 10 PL games across 10 different channels on final day of the season. All the details, right here:
- NWSL Digest: Reign, Flash flying as we move from past Week 1 0
- Henry, Sam goals see New York break into the win column 0
- Real Madrid beat Barcelona to win Copa del Rey, as Bale’s brilliance seals it 2
- It’s official: Atlanta gets Major League Soccer’s 22nd franchise 1
- Manchester City 2-2 Sunderland: Two Wickham goals, late Nasri equalizer leave sides even (video) 3
- Everton 2-3 Crystal Palace: Toffees’ top four hopes take huge hit 6