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.
Dec 21, 2014, 10:26 AM EST
The boyhood Newcastle fan scored at St. James Park for the third year in a row as Sunderland stole the Tyne-Wear derby late.
Dec 21, 2014, 10:16 AM EST
Raheem Sterling looks to be the lone attacking option for Liverpool as Brendan Rodgers has left both his available strikers on the bench.
Dec 21, 2014, 8:52 AM EST
A magnetizing first touch leads to a meaningless but nonetheless beautiful goal by the man who gives us magic weekly.
Dec 21, 2014, 7:53 AM EST
The heated Tyne-Wear derby has brought us goals and fireworks of many kinds, and will be no different today as Sunderland looks to win four in a row over Newcastle for the first time ever.
Dec 20, 2014, 10:54 PM EST
Howard doesn’t think Lampard will start the MLS season with NYCFC, although he says he should.
Dec 20, 2014, 9:51 PM EST
Doneil Henry is reportedly close to joining West Ham, which is a surprise, to say the least.
Dec 20, 2014, 8:46 PM EST
After logging lots of miles the last 16 months, Raheem Sterling is going to get a short rest very soon.
Dec 20, 2014, 8:04 PM EST
NYCFC won’t be calling the Bronx home, but they’re still hopeful a deal can be done elsewhere in the city.
Dec 20, 2014, 7:13 PM EST
Arsene Wenger says he’s not cheap, and that you should join him for a night out if you don’t believe him.
Dec 20, 2014, 5:56 PM EST
Barcelona are keeping things tight in Spain, while Roma are losing sight of Juventus once again.
Dec 20, 2014, 4:33 PM EST
Four trophies in one calendar year — it’s a good time to be Real Madrid.
Dec 20, 2014, 3:42 PM EST
After collapsing on the field in a game back in July 2013, Engelbrecht had undergone four heart surgeries to get back on the pitch.
Dec 20, 2014, 3:16 PM EST
Things are going to be extra intense all Sunday morning, so put on a pot of coffee and enjoy the rush.
Dec 20, 2014, 2:25 PM EST
Pep Guardiola’s side carries a gaudy plus-37 goal differential, is 9-0 at home and has five wins and three draws on the road.
Dec 20, 2014, 2:15 PM EST
Martinez can’t put his finger on Everton’s struggles, but does think his side must defend better.
Dec 20, 2014, 1:40 PM EST
Mumbai was the home of the title match, with Atletico de Kolkata knocking off the Kerala Blasters 1-0.
Dec 20, 2014, 1:33 PM EST
Seven games took place in the PL on Saturday. Here’s videos, analysis, recaps and more.
Dec 20, 2014, 12:45 PM EST
Benteke dances for space before lashing a curler into the goal to give Villa a 1-0 lead. It’s one of those “Why we watch” goals.
Dec 20, 2014, 12:40 PM EST
Match of the Day begins at 12:30 p.m. ET on NBC. Watch it live online, here.
Dec 20, 2014, 12:34 PM EST
Watch Lamela scored a stunning strike to give Spurs another win.
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