Global Economics

U.S. Owners See Manchester United's Fortunes Fall as the Team Slips on the Pitch


Phil Jones of Manchester United misses with his penalty attempt during the Capital One Cup semi-final on Jan. 22

Photograph by Clive Mason/Getty Images

Phil Jones of Manchester United misses with his penalty attempt during the Capital One Cup semi-final on Jan. 22

(Corrects to remove erroneous information about short-selling of Manchester United shares, after sixth paragraph.)

Fans of one of the most successful and valuable sports franchises in the world, the English soccer club Manchester United (MANU), are not used to suffering. So they’re not doing it silently this year (just check Twitter (TWTR) or the English sports pages) as they watch their team stumble through one of its worst runs in recent memory. Now those woes are mirrored in financial tables for the team’s owners, including those who have stakes in the club via the New York Stock Exchange.

On Thursday, Deloitte released its annual ranking of the highest-earning teams in the world’s most popular sport, which is soccer. Manchester United, which has won a record 20 English championships, slipped from the top-three spots for only the second time in the 17-year history of the Deloitte index.

Even though Manchester United increased its revenue 7 percent last year, to €423.8 million ($580.1 million), it was nudged from the third spot by the surging fortunes of Germany’s Bayern Munich. (Spain continued its four-year dominance of the top two spots, via Real Madrid and Barcelona.)

Deloitte said Manchester United could quickly bump its way back into the upper reaches of the earnings bracket thanks to a sponsorship deal with Aon (AON) and a new broadcasting contract. But it also warned that the club’s fortunes will be influenced by its performance on the field. Of particular financial value will be whether it’s good enough this year to keep its spot in the Europeanwide UEFA Champions League, which will require it to finish among the top four of England’s Premier League.

Deloitte said what every fan knows, which is that the prospect of finishing in the top four “is in jeopardy after an inconsistent start” to this season.

The team’s shareholders also are suffering. Manchester United’s value on the NYSE has declined 15 percent in the past seven weeks. After Thursday’s opening bell, the stock was trading below $15 and nearing its one-year low of $14.75 (reached on Jan. 16). The public picked up the equivalent of a 10 percent stake in the club through an August 2012 initial public offering, but the team is majority-owned and run by an 85-year-old American, Malcolm Glazer, and his family. The Palm Beach (Fla.) businessman also owns the National Football League’s Tampa Bay Buccaneers. Two of his sons, Avram and Joel Glazer, are co-chairmen of Manchester United.

Things are looking quite different across the English Channel, where Deloitte’s rankings put a French team in the top 10 for the first time in the index’s history. Paris Saint-Germain, the French champions, ranked just behind Manchester United in the fifth global earnings spot, with almost €400 million in revenue. The club has quadrupled its revenue since a company formed by Tamim bin Hamad Al Thani, the emir of Qatar, bought a controlling stake in 2011. Deloitte said the Paris club got a boost from the high-profile signing last year of David Beckham.

Simpson is a senior international correspondent for Bloomberg News and Bloomberg Businessweek in London. Follow him at @CamSimpsonNews.

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Companies Mentioned

  • MANU
    (Manchester United Plc)
    • $17.58 USD
    • -0.05
    • -0.28%
  • TWTR
    (Twitter Inc)
    • $45.11 USD
    • 0.05
    • 0.11%
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