Wednesday, July 4, 2012

Glazers File IPO for Manchester United

As first reported a month ago, the Glazer family will sell shares of Manchester United on the NYSE after filing an IPO on Tuesday, according to the New York Times:
The club set a preliminary fund-raising target of $100 million to determine registration fees. It had previously hoped to raise about $1 billion in either Hong Kong or Singapore. Manchester United had traded on the London Stock Exchange before Malcolm Glazer, an American who also controls the Tampa Bay Buccaneers football team, took the company private in a $1.45 billion buyout in 2005.

In its prospectus on Tuesday, Manchester United, a soccer team founded by railway workers in 1878, says it qualifies as an “emerging growth company” under the Jumpstart Our Business Start-Ups Act of 2012 because it generated less than $1 billion in revenue in its last fiscal year. That exempts the team from some financial reporting requirements for up to five years, including having its internal controls approved by an auditor.

The filing also lays out a share structure that would allow the Glazer family to keep control of the team even while selling equity. Manchester United plans to sell an undisclosed number of Class A shares, which have one vote each. The Glazer family will hold Class B shares, which will have 10 votes apiece, effectively keeping the club’s management within its control.
The potential for Man. U - the most valuable sports franchise in the world - is great, even though the club hasn't profited very much the last few years. Part of the problem is the Glazers were paying outrageous interest rates on the majority of the team they financed, but a large 2010 payment helped alleviate the burden.

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