Manchester United’s Share Price Declines by Over 19% in a Week
Manchester United, one of the most iconic soccer clubs globally, has witnessed a substantial drop in its share price, causing a significant dent in its market value. This sharp decline, which amounts to more than 19% over the course of a week, has resulted in a staggering loss of approximately $740 million in the club’s market capitalization. The primary catalyst behind this sudden downturn is a report published by a prominent UK newspaper. The report suggests that the club’s current US-based owners, the Glazer family, have decided to postpone any plans to sell the club, at least for the time being.
Record Daily Decline Since IPO
The most significant single-day decline in Manchester United’s share price since its Initial Public Offering (IPO) in New York back in August 2012 occurred on Tuesday, with the stock plummeting by more than 18%. This alarming drop closely follows the publication of the report by the Daily Mail, which hinted at the Glazers’ intention to halt the process of selling the renowned club. Interestingly, this decline coincided with the Labor Day holiday in the United States, where the stock exchanges were closed on Monday.
Continuous Share Price Erosion
The decline in Manchester United’s shares persisted into the following day, with the stock losing an additional 1% of its value on Wednesday. At the close of trading on Tuesday, the club’s market valuation stood at $3.15 billion.
A Look Back at the Sales Endeavor
It’s worth noting that Manchester United had officially announced its intention to explore the possibility of selling the club in November of the previous year. This announcement had attracted interest from several potential buyers, including British billionaire Jim Ratcliffe and Qatari Sheikh Jassim Bin Hamad Al Thani, among others. However, the Glazer family was unable to secure the “multiple serious bidders” they had initially hoped for, as reported by the Daily Mail. Consequently, they have decided to defer any sale of the club until 2025.
Seeking Strategic Alternatives
In November, the Glazer family, who have been in control of Manchester United since 2005, expressed their willingness to consider “all strategic alternatives,” which included the possibility of bringing in new investors or selling the club outright.
Ambitious Valuation Targets
Various reports earlier in the year indicated that the Glazers were seeking a sale price ranging between $7.2 billion and $9.6 billion from potential buyers. The Daily Mail’s report, however, suggested an even more ambitious range, with the current owners holding out for bids between £7 billion ($8.8 billion) and £10 billion ($12.5 billion).
Lingering Criticism and Performance
The Glazers have faced significant criticism from a substantial portion of Manchester United’s 1.1 billion self-proclaimed fans worldwide. Their leveraged buyout of the club resulted in a substantial debt burden, and the club’s performance on the pitch has also come under scrutiny. Manchester United has not won a trophy since 2017 and currently occupies the 11th spot in the English Premier League.
Financial Outlook and Fan Expectations
Despite recent challenges, Manchester United reported revenue of £481 million ($604 million) for the nine months leading up to March 31, 2023. However, the club also revealed an operating loss of nearly £11 million ($14 million) for that period. Looking ahead, Manchester United anticipates achieving record revenue in the range of £630 million to £640 million ($803 million) for the full fiscal year.
Implications and Fan Sentiments
The news of the Glazers postponing the sale of Manchester United will likely disappoint the club’s passionate supporters. Mark Middling, an assistant professor at Newcastle Business School, expressed that this development would be met with disappointment by fans who have criticized the Glazer ownership for several years. They had hoped for a brighter future under new ownership.
A Unique Position in the Sports World
Manchester United stands out as one of the few major sports franchises globally that are publicly traded. While two of its rivals, Germany’s Borussia Dortmund and Italy’s Juventus, also have publicly traded shares, they are listed on European stock exchanges, with Borussia Dortmund in Frankfurt and Juventus in Milan.