Soccer club Manchester United has seen its share price jump as much as 24% in the past two weeks, a gain that’s helped it claim the mantle of the first sports franchise to be valued at more than $3 billion.
The stock has pulled back a bit in the past couple of days, but it’s still up about 16% from its Jan. 11 close.
Manchester United, which until this month had hovered around its $14 August IPO price, now has an enterprise value of $3.2 billion. By the reckoning of Forbes — the closest thing to a reliable source for franchise values — the Dallas Cowboys are second with a $2.1 billion valuation.
United’s recent rise is good news for George Soros, who bought 3.1 million shares at the launch; it’s also good, of course, for the Glazer family, who bought the club in 2005 in controversial circumstances, loading a financially secure� institution with $650 million of debt. The IPO price was below the hoped-for $16 to $20 a share, a fact that seemed to cheer supporters opposed to the American owners.
But despite the resistance of many of the club’s die-hard fans, it seems the stock’s now performing more closely to the original expectations, perhaps thanks to its recent off-field successes:
United’s commercial growth appears to be driving the share price up, with the club announcing several new sponsorship deals since August, qualifying for the Champions League knockout stages and with the prospect of the new bumper Premier League television deals that are coming on stream from August.
Publicly-trade sports teams have rarely worked out well for investors, but with ever-rising television revenues, and sponsors lining up to give their money to sports teams, it could be the Glazers found the right formula — at the right time — to buck that trend.
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