Manchester United will make its New York Stock Exchange debut on Friday after a flotation that disappointed the English soccer club's American owners and has enraged some of its fans.
Soccer is the world's most popular sport, but the setback for the initial public offering underlines the limited appeal of even its biggest names for investors.
The IPO priced at $14, below the $16-20 range the club's bankers had been seeking. It valued the 19-times English champions at only $2.3 billion and shaved as much as $100 million off the proceeds expected for the team and its owners.
The offering raised $233.2 million, to be split equally between the club and its owners, the Florida-based Glazer family.
The loss of as much as $50 million for the club will be a blow as it copes with a heavy debt burden and seeks to buy new players, who cost tens of millions of dollars each.
The 134-year-old club looked at listing in Singapore and Hong Kong last year to tap into its large Asian fan base but pulled out, blaming volatile markets.
A group of United fans who are campaigning for greater involvement in the ownership of the club jeered the Glazers.
“When the news finally came, it was revealed they'd been forced to take $14 a share or let the whole deal collapse. A massive humiliating blow for the Glazers,” the vocal Manchester United Supporters Trust (MUST) said.
In a rare example of fans cheering against their team, MUST said they hoped the share price would fall to around $10 and make the club a takeover target.
“A valuation of MUFC of 1 billion pounds ($1.6 billion) brings it into the same ball park valuation as potential bidders,” it said.
“Supporters will hope an offer from a supporter-friendly consortium, which sees the value of sharing ownership with supporters, is forthcoming and successful,” it added.
The Red Knights, a group of wealthy fans including Goldman Sachs chief economist Jim O'Neill, weighed a bid for United two years ago but were put off by the price.
The Glazers bought United for 790 million pounds in a highly leveraged deal in 2005, taking it private after 14 years on the London Stock Exchange.
Some fans argue that the cost of the debt has forced up ticket prices for the club, which is based in northwest England but claims 659 million followers across the world.
They also say repayments have hindered the team's ability to compete with big-spending rivals on the pitch.
United suffered a rare barren season last year, losing their Premier League title to crosstown rival Manchester City, whose owner is part of Abu Dhabi's ruling family and has pumped 800 million pounds into reviving what had long been United's poor relation.
With so much tied to success on the field, soccer clubs are an inherently risky investment.
“I didn't even look at it. I would never, ever invest in a football club,” said the head of UK equities at an investment house running around 100 billion pounds in assets.
“The first goal of a club is not to make money for shareholders but to win trophies,” said Emmanuel Hembert of management consultancy A.T. Kearney.
Italian champions Juventus is one of the few European soccer clubs with a stock market listing, and it is valued at only around $240 million, according to Reuters data.
“Manchester United itself has a very good business model and has been able to be profitable,” he said.
“If there is one club to invest in it would be Manchester United, but being the best economically among your peers may not be enough.” - Reuters