Shares of the English football team, which were offered to the public last August at $14, did poorly at first but have soared the past few days.
The recent increase in its stock price has pushed up Manchester Untied’s enterprise value (equity plus debt) to $ $3.3 billion, the highest value of any team in the world. The second most valuable sports team in the world are the NFL’s Dallas Cowboys, worth $2.1 billion.
Despite a drop in first quarter earnings because of a reduction in television revenue, (Manchester United got kicked out of Champions League earlier this season), the appetite for shares of the 19-time English champion has increased due to brighter earnings prospects from new sponsorship deals with Japan‘s Kansai, and China Construction Bank, and the potential of much more lucrative English Premiership (Manchester United currently is in first place) and Champions League payouts this year.
Publicly traded sports teams have traditionally been bad investments. But thus far the Red Devils are bucking history. [Source: Forbes.com]
Earlier this week, Deloitte outlined that Real Madrid surpassed the €500 million revenue in a single year. Now, Manchester United have a valuation of $3 Billion. Who’s next?