• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Can Manchester United Investors Finally Make Their Goal?

With the possibility of a sale of MANU getting kicked around, it's game-on for owners of the shares.
By BRAD GINESIN
Nov 26, 2022 | 10:00 AM EST
Stocks quotes in this article: MANU

Manchester United's (MANU)  stock has gone nowhere for the decade since its $14 initial public offering in 2012 -- even as sports franchises have skyrocketed in value.

The reason is simple: There's no real economic value for shareholders. There's no cash flow, no dividends, and no earnings. Sports franchises are trophy properties for owners -- and value for shareholders can often only be garnered upon a sale. The Glazer family, who purchased Manchester United in 2005, have shown no interest in selling the club during their 17 years of ownership.

Until now, that is.

This week when the Glazer family announced their intention to explore strategic alternatives, that included a possible sale. There is no doubt that if the Glazers are serious about selling the club, shareholders will be well rewarded. The stock trades at a steep discount to its trophy value sale price. The 25% stock rise on Wednesday, which brought the enterprise value to around $3.5 billion, partly reflects this potential.

Sir Jim Ratcliffe, a life-life Manchester United fan, was reportedly interested in bidding no greater than $5 billion. His bid would equate to around $30 per share. The scarcity value and the notoriety of owning such a storied club could potentially drive the bidding much higher.

The sale of English soccer club Chelsea for $3.2 billion earlier in the year set a high mark for the valuation potential for the far more popular Manchester United.

Make no mistake, the Glazer family has voting control and is holding all the cards. Shareholders can't force a sale, so no activist investor is coming in to stir the pot if the Glazers don't get their price -- reportedly at $7.25 billion to $9.67 billion. In some respects, there's a Liar's Poker aspect to buying Manchester United's stock -- your hand may look good, but there's a skilled bluffer on the other side who has only their interest at heart. So, no tears are allowed if the board passes on an attractive shareholder offer in the end.

In general, this underscores the problem with owning shares in a sports franchise like Manchester United: Shareholders take on risk and opportunity costs without a clear economic reward; and without the trappings of owning a trophy property. Yet, on the plus side, the shares have been massively discounted in the market to its takeover value; and if the Board pulls the trigger on a fair bid, shareholders can reap the benefits.

Bottom line, MANU offers a unique risk/reward after its owners indicated a willingness to sell the Premier League club. Shareholders and fans alike would be winners. Manchester United reported, "the Board will consider all strategic alternatives, including new investment in the club, a sale, or other transactions involving the company." Clearly, this doesn't ensure a sale, but given the proper investor risk tolerance, it's worth pulling the trigger to own shares with a full understanding of the caveats and perils of playing along the high-stakes game for this trophy property.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Ginesin was long MANU.

TAGS: Mergers and Acquisitions | Investing | Stocks | Sports business

More from Stocks

5 Factors to Watch in an Oversold Bounce

James "Rev Shark" DePorre
Oct 4, 2023 11:35 AM EDT

If you're stalking a counter-trend upswing in the market, then pay attention to how these scenarios play out.

Apple to the Core: Is It Better to Reduce Than Add Here?

Stephen Guilfoyle
Oct 4, 2023 10:45 AM EDT

The firm's products are profitable, but they are just the key. The key that unlocks much higher margin businesses elsewhere and going forward.

What's Next for Bank of America as the Charts Turn Ugly?

Bruce Kamich
Oct 4, 2023 9:50 AM EDT

Future declines may be likely.

The Uglier Equities and Economic Conditions Get, the More Conservative I Become

Bret Jensen
Oct 4, 2023 9:30 AM EDT

My portfolio definitely isn't sexy as it is focused more on preserving capital than aggressively trying to grow it.

Tom Lee: When a Trade Becomes Obvious, That's Often When the Trend Can Reverse

Tom Lee and the FSI Team
Oct 4, 2023 9:15 AM EDT

Is this becoming a 'single issue' market singularly focused on yields? That will eventually change, but the turning point seems a bit away.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:13 PM EDT BRUCE KAMICH

    8 Trading Rules from T. T. Hoyne

    You just read the header for this missive and prob...
  • 08:42 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    How Elite Traders Make Big Profits
  • 02:58 PM EDT BRUCE KAMICH

    Classic Trading Rules From Bernard Baruch

    Bernard Baruch listed the rules (below) in his aut...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login