January 29 – Already trumpeted as the most valuable sports club in the world by US business magazine Forbes, Manchester United has now become the first sports team in the world with a $3 billion valuation.
Publicly quoted sports franchises have generally been difficult investments for investors, particularly outside the US where on-field performance dictates promotion and relegation, and qualification for regional tournaments – all of which significantly affect stability in the revenue performance.
Manchester United shares were offered to the public last August at $14 and although initially performing poorly, have recently soared to just under $17 – no doubt in response to their commanding lead in the English Premier League and their on-going participation in the Cup competitions, most notably the UEFA Champions League where they face Real Madrid in the next round.
In a Forbes ranking of the world’s most valuable sports franchises last July, Real Madird came in as the second highest value sports franchise.
Manchester United’s stock has outperformed the S&P 500 since it went public, much to the benefit of the controlling Glazer family and legendary investor George Soros who bought a big stake soon after the club went public.
The recent increase in stock price has driven up Manchester United’s enterprise value (equity plus debt) to $3.3 billion. Currently the second most valuable sports team in the world are the NFL’s Dallas Cowboys, worth $2.1 billion.
Manchester United recently reported a drop in television revenue year-on-year, primarily due to exiting the Champions League at the group stage. However, demand for shares has increased recently following a number of new regional sponsorship deals including agreements with Japan’s Kansai and China Construction Bank.
The Forbes ranking of the most valuable sports franchises in the world last July had four football clubs in the top 10. The top 50 comprised all 32 NFL teams. Ferrari was in the list at 15th.
The top 10 were:
1. Manchester United ($2.23 billion)
2. Real Madrid ($1.88 billion)
3= New York Yankees ($1.85 billion)
3= Dallas Cowboys ($1.85 billion)
5. Washington Redskins ($1.56 billion)
6= Los Angeles Dodgers ($1.4 billion)
6= New England Patriots ($1.4 billion)
8. Barcelona ($1.31 billion)
9. New York Giants ($1.3 billion)
10. Arsenal ($1.29 billion)
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