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.
Sep 30, 2014, 5:58 PM EDT
Cardiff City’s owner set to invest in Chivas USA?
Sep 30, 2014, 5:35 PM EDT
The Belgian international was taken off the pitch on a stretcher this weekend with an apparent hamstring injury.
Sep 30, 2014, 5:15 PM EDT
Want a recap of all eight UCL games that took place across Europe on Tuesday? Look no further…
Sep 30, 2014, 4:40 PM EDT
Totti, Aguero trade goals as City lose more ground in Group E.
Sep 30, 2014, 4:36 PM EDT
Only Nemanja Matic, much to the chagrin of the Sporting crowd, could beat a fantastic Rui Patricio.
Sep 30, 2014, 3:46 PM EDT
What’s happening around Europe? Find out, here.
Sep 30, 2014, 3:37 PM EDT
Magnifico from Totti, as Italian legend writes his name in the history books.
Sep 30, 2014, 2:18 PM EDT
Moscow was skunked by Roma 5-1 in the first round of group matches, while City fell 1-0 to Bayern.
Sep 30, 2014, 2:11 PM EDT
Check out if your favorite player made it onto Round 6’s Team of the Week.
Sep 30, 2014, 1:58 PM EDT
Mario Gotze drew a penalty that Thomas Muller finished, and Bayern Munich emerged victorious from a relatively-quiet stadium.
Sep 30, 2014, 1:30 PM EDT
A tough break, indeed (pun absolutely intended).
Sep 30, 2014, 12:31 PM EDT
The Los Angeles Galaxy are really, really good, while Chivas USA is across town and the PR table.
Sep 30, 2014, 11:25 AM EDT
Fulham owner Shahid Khan is taking his time to make sure he gets things right this time around.
Sep 30, 2014, 10:38 AM EDT
Some called for his Manchester United captaincy over his lack of discipline, but two words: Roy Keane.
Sep 30, 2014, 10:00 AM EDT
Which player ensured it would be back-to-back honors for a single team in the Premier League’s player of the week battle?
Sep 30, 2014, 9:13 AM EDT
The result of the weekend, however, was L.A.’s 4-0 defeat of the New York Red Bulls, and several players deserved Man of the Match honors.
Sep 30, 2014, 8:30 AM EDT
Maybe, just maybe, Newcastle will win against Swansea City this week and take another step toward getting well.
Sep 30, 2014, 7:52 AM EDT
FC Santa Claus is bringing soccer matches to the good boys and girls of the Ykkonen.
Sep 29, 2014, 11:44 PM EDT
Sepp Blatter confirmed FIFA voted strongly to eliminate third-party ownership in all professional settings, with a transitional period of a few years to be instituted immediately.
Sep 29, 2014, 11:00 PM EDT
The Men discussed all things Premier League on this week’s episode, including Phil Jagielka, Wayne Rooney, and a Peter Crouch chicken dance.
- UEFA Champions League roundup: PSG beat Barcelona, Chelsea top Sporting 0
- Manchester City 1-1 AS Roma: Italians frustrate City as European woe continues 0
- Sporting CP 0-1 Chelsea: Blues win chippy UCL affair in Lisbon 0
- Follow live – UEFA Champions League: Manchester City vs. AS Roma 0
- PST’s Major League Soccer power rankings: More movement, just not No.1 1
- USMNT legend McBride, Jaguars president helping select Fulham manager 1