Manchester United: win on Wall Street despite struggles on the pitch | CNN Business


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Fans of the Manchester United Football Club are not happy to see their squad at the center of the English Premier League peloton so far this season, especially after a disappointing run in 2021.

Make things worse? The once mighty Man United’s last major championship was a UEFA Europa League win in 2017 and the last Premier League crown came way back in 2013.

But despite the Red Devils’ lack of recent success on the pitch, Manchester United (MANU), which is traded on the New York Stock Exchange, is up 3% this year – no easy feat in this tough market.

In addition, stocks are up nearly 35% in the past three months. So why are Manchester United stocks doing so well?

One reason for the pop is an August tweet from Tesla (TSLA) and SpaceX CEO Elon Musk who joked that he bought the team.

The world’s richest person isn’t quite adding the team to his business empire — which could eventually include Twitter (TWTR) if a judge forces him to go ahead with the shareholder approve a $44 billion deal. But there is legitimate speculation that the team’s current U.S. owners could put the squad — or at least a stake in it — up for sale.

Sir Jim Ratcliffe, CEO of chemical giant Ineos, said last month he would be interested in buying the team if the Glazer family, which also owns the NFL’s Tampa Bay Buccaneers, wants to sell.

And it would make sense that some other global billionaires would be interested in owning United. The team has a hugely loyal fan base and one of the world’s most popular players in Cristiano Ronaldo.

Top sports franchises such as Man United generate huge revenue streams from the sale of merchandising and broadcasting rights.

At a time when many consumers are cutting the cord or using DVRs to skip commercials, live sporting events continue to be a big draw for networks like Disney’s (DIS) ESPN, Fox, Comcast’s (CMCSA) NBC, Paramount’s CBS, and CNN’s mother Warner Bros. Discovery’s TNT and TBS. Tech giants Amazon (AMZN) and Apple (AAPL) also recently signed major sports rights deals.

United will announce its final results on September 22. Sales are expected to rise more than 40% from a year ago and the club’s passionate fans are unlikely to let the team down just because Premier League rivals Manchester City, Chelsea, Arsenal and Tottenham entered the better in recent years.

“Definitely if you have enough last seats, it affects ticket sales,” said Christopher Zook, chairman and chief investment officer at CAZ Investments, a private equity firm that invests in sports franchises. “But the reason we’re attracted to sports in the first place is because they make a lot of money.”

Zook’s company has an investment in the Fenway Sports Group, the company that owns the Boston Red Sox and Liverpool football club, another Premier League favorite.

Man United are a rarity in the sports and finance world. It is one of the few major sports franchises listed on the stock exchange. But there are more.

Madison Square Garden Sports, owner of the New York Knicks and New York Rangers, also trades on the NYSE.

The Atlanta Braves (BATRA) MLB team is a tracking stock (FWONA) of Liberty Media, which is traded on the Nasdaq. Liberty Media also owns the popular (FWONA)-liberty-media/index.html” target=”_blank”>Formula 1 racing league and has a tracking stock (FWONA) for it. (Tracking stock (FWONA), as the name implies, tracks a company’s sales and earnings, but doesn’t give shareholders voting rights like common stock (FWONA) do.)

And shares of two of United’s top rivals are publicly traded on European exchanges: Germany’s Borussia Dortmund trades in Frankfurt, while Italy’s Juventus is listed in Milan.

Zook said he wouldn’t be surprised if more American and international sports giants want to go public. He called their built-in long-term demand because of “multi-generational fan loyalty” and noted that the rise of legal sports gambling, fueled by popular apps like DraftKings and FanDuel, should also increase fan engagement — and team ratings.

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