Manchester United plays for dollars in US IPO
NEW YORK - Storied British football club Manchester United, overloaded with debt since their takeover by a billionaire American family of investors, is moving to raise cash through a US share sale.
The US-controlled Red Devils, Britain's all-time top team, filed papers in the United States on Tuesday for an initial public share offering, with the owners touting its value as one of the world's most recognized sports brands.
The papers gave a pro-forma amount of $100 million as the target for the share issue, but recent reports about abortive attempts to list it in Hong Kong or Singapore said the owners aim to bring in $1 billion.
The team, controlled since 2005 by the Glazer family -- billionaire US sports investors -- has struggled in recent years with heavy debts from the takeover despite what is arguably the world's strongest global fan base for a football club.
"We intend to use all of our net proceeds from this offering to reduce our indebtedness," the IPO prospectus said.
United fans mounted protests against the Glazers from the moment the Americans bought the Premier League club in 2005, loading it up with debt to finance the deal.
Tensions over their management and finances hit a peak in 2010, when the club's liabilities topped one billion pounds ($1.55 billion) and fans rebelled at their management, launching protests aimed at denying the club revenues.
But the debts have been slashed in the past two years, and profits have grown despite the team's narrow loss of the Premier League title to cross-town rival Manchester City this year.
The club's name and fame underpin massive stored value that the owners hope will bring in strong support for the IPO.
"We believe that we are one of the world's most recognizable global brands with a community of 659 million followers," the prospectus said.
"The global sports industry is expected to grow from $119 billion in 2011 to $145 billion by 2015. Manchester United is at the forefront of live football, which is a key component of this market.
"While our business represents only a small portion of our addressable markets and may not grow at corresponding rates, we believe our global reach and access to emerging markets positions us for continued growth," it added.
The prospectus said that as of March 31, liabilities were down to 606 million pounds and debt was 423 billion pounds, and profits for the nine months to March 31 were 38 million pounds, nearly triple a year earlier.
The listed company would be the newly-created Manchester United Ltd, established in April this year in the tax haven of Cayman Islands.
Manchester United is wholly controlled by Red Football LLC, a Glazer-led company registered in the US state of Delaware, which manages the team through British-incorporated Red Football Shareholder Ltd.
Before the offering goes ahead, Red Football Shareholder will be injected into the Cayman unit, and the business of the team "will be conducted through Manchester United Ltd. and its subsidiaries," the prospectus said.
The listing is unlikely to water down the Glazers' control. According to the prospectus, their Red Football LLC holds 100 percent of class A shares and 100 percent of class B shares in the Cayman unit to be listed.
In the offering, they will sell off some of the A shares while retaining the B shares, which have 10 times the voting rights of the A shares.
Family-controlled entities like Red Football took in more than 10 million pounds in management and consultancy fees in 2011.
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