The Glazer family is seeking an enterprise value of $3.8 billion for the 134-year-old team in tomorrow’s IPO, about $1.9 billion more than the value of Spain’s Real Madrid, according to data compiled by Bloomberg and Forbes. The $333 million U.S. offering would also make United about 10 times as expensive relative to sales as publicly traded European teams such as Juventus Football Club SpA (JUVE), while leaving the Glazers with almost all the voting control.
Some believe the valuation ensures the price will plummet shortly after trading begins, but it seems to me the Glazers are going for the heart strings with this offering, not the pocketbook. Which is about as cynical as the modern ownership in European football can be. The Glazers are selling half the stock, and the club the other half. Meaning the American owners are banking that the passion, dedication and, sadly, naivete of United’s worldwide fan base will mean they will willingly give them money.
And it seems to be working; the Financial Times are reporting initial demand for the stock has been “robust.” Morever, the club is exploiting US legislation meant to create jobs in America to waive the requirement to submit quarterly reports.
So the club is asking fans to buy stock that offers no voting rights, no dividends, represents only 10% of the total company, is generally considered to be vastly overpriced and 50% of which will go directly to the Glazer family. Because, you know, you’ve got to “support the team.”