Manchester United, the British soccer team owned by the Florida-based Glazer family, came in under its projected IPO range of $16–$20 per share to sell at $14 per share, raising $233.3 million and giving it an enterprise value of $2.9 billion.
Bloomberg reported late Thursday that the team failed to draw as much attention at its U.S. IPO as the Glazers had hoped. Even though the valuation came out around $1 billion higher than that of Spain’s Real Madrid soccer team, the world’s second most valuable sports franchise valued at $1.88 billion, the family had hoped to raise considerably more. Even the New York Yankees only come in third in this competition, valued at $1.85 billion.
Still, because of a two-tier share structure, the Glazers retain nearly 99% of voting rights thanks to their Class B shares, while purchasers of the Class A shares sold together account for only 1.3%. The B shares carry 10 votes each.
Kenneth Perkins of Morningstar, a Chicago-based analyst who covers consumer companies, valued the stock lower still, at $10 per share. He said that stiffer competition for fans and corporate sponsorships from other teams, together with a costly debt load, could take a toll on earnings. In the report he was quoted saying that the company “was asking investors to pay a pretty high price and take on a lot of risk.” He added, “It could work out, but the risk is to the downside.”