But you will need to be a fan of the Glazer family, which bought England’s
most successful club in 2005 for a highly leveraged £790m. As potential
investors await details of the club’s IPO, they should cast a cold eye over
its 2010/11 accounts, released last week.
The numbers offer plenty of reasons for the Glazers to want to sell shares in
Manchester United, and none at all for rational investors to buy them.
Not very profitable
The most striking revelation is that Manchester United is not terribly
profitable. The Glazers’ net profit for the year to June 30 was only £9.8m –
a poor return on group revenue of £331m.
Interest payments of £43m – the issue that enrages fans – consumed two-thirds
of the English Premier League club’s operating profit, while accounting
measures such as an unrealised £16m foreign exchange gain flattered the
bottom line.
True, the pre-tax profit of £30m was an improvement on the loss of £15m the
previous year. Still, the meagre takeaway for the owners suggests that a
reported valuation of $3bn for the club is wildly optimistic.
Not-voting shares
Potential investors may also be asked to accept non-voting shares as part of
the Singapore stock exchange listing - evidence of the Glazers’ reluctance
to cede any degree of control. An inflated valuation and a two-tier
ownership structure would be a turn-off in any other business.
But football is unlike any other business (as investors who lost in the
listings craze of the 1990s will recall at their leisure). Given the club’s
success on the pitch, continued investment in top players and shrinking
acquisition debt, it is time to stop moaning about the Glazers as custodians
of English football’s most glittering prize.
Those who might be thinking of investing in the IPO, however, should realise
that they would not be buying a piece of football history. They would be
buying a piece of the Glazers.
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