Manchester United Said to Look at Options to Improve Finances, Buy Players
Manchester United Said to Discuss Finance Options
Laurence Griffiths/Getty Images
The Sunday Times reported yesterday the team is considering selling shares on the Hong Kong stock exchange after holding talks with several investment banks about a listing.
The Sunday Times reported yesterday the team is considering selling shares on the Hong Kong stock exchange after holding talks with several investment banks about a listing.Photographer: Laurence Griffiths/Getty Images
Manchester United, the record 19- time English soccer champion, is considering ways to cut financing costs in order to use savings to expand and make funds available for player purchases, according to a person familiar with the matter.
The club’s chief operating officer, Edward Woodward, a former banker with J.P. Morgan Chase & Co., has discussed several ways to cut financing costs, said the person, who declined to be identified because the discussions are private. The Sunday Times reported yesterday the team is considering selling shares on the Hong Kong stock exchange after holding talks with several investment banks about a listing.
“The club does not comment on speculation,” Manchester United said in a statement to Bloomberg News. The Sunday Times story said talks about a share issue were at an early stage and may amount to nothing. The newspaper didn’t provide any details about how much of the club might be offered in the sale.
The club isn’t concerned about its finances, but wants to ensure it has the most efficient funding policy, said the person. It’s not close to making any definitive decision about changing its current terms, the person said.
Manchester United this season won its fourth league title since the Glazer family’s 2005 buyout. It failed to secure a second European Cup under the American owners after losing 3-1 in the Champions League final to Barcelona on May 28.
Record Loss
In March the team’s parent company Red Football Joint Venture Ltd. announced a record 104.7 million-pound ($170 million) fiscal-year loss because of costs related to swapping a long-term bank loan for a dollar and sterling bond last year and lower income from player sales.
The Glazers, who also own the National Football League’s Tampa Bay Buccaneers, bought United for 790 million pounds in a leveraged buyout. Forbes magazine estimates the team is now worth $1.8 billion.
The club spends about 45 million pounds a year on its bonds, which mature in 2017. All of the debt is linked to the Glazer acquisition. The team was debt-free when it was run as a public limited company before the takeover. Still, its sales under the Americans have doubled to about 300 million pounds.
As well as a 500 million-pound loan secured against the team, the ownership also had a 220 million-pound payment-in-kind loan that accrued rolled-up interest of as much as 16.25 percent. The owners paid off the lenders, although neither the club nor the Glazers have said how the loan was repaid.
Two seasons ago United sold Portuguese forward Cristiano Ronaldo to Real Madrid for a world record 80 million pounds. That helped boost its cash surplus to more than 100 million pounds. It has spent about 30 million pounds of that in the past two quarters by buying back some of its bonds.
Much of the rest is available to manager Alex Ferguson to buy new talent, said the person. United has already agreed to deals totaling about 40 million pounds for Spanish goalkeeper David De Gea and English defender Phil Jones, according to reports in U.K. media.
To contact the reporter for this story: Tariq Panja in London at tpanja@bloomberg.net.
To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net
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