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English soccer club Manchester United, the world’s most-valuable sports team, is seeking up to $333 million in an initial public offering according to a regulatory filing with the Securities Exchange Commission.
The filing states that 16.7 million Class A shares will be issued, worth between $16 and $20 each. Half of the shares will be issued by the club while the other half will be sold by the Glazer family, which owns the team. Proceeds from the Glazer family’s shares will not go to the team.
Today’s filing suggests a far more valuable IPO than the $100 million one that the team filed for at the beginning of the month. Manchester United intends to use all net proceeds from the IPO to reduce the team’s debt; as of March 31, the team had a total indebtedness of £423.3 million, or about $664.9 million. The midpoint of the IPO offering range would value the club at $2.95 billion, about $715 million more than the $2.24 billion we evaluated it worth in April.
The filing comes on the same day that the team agreed to a new sponsorship deal with General Motors. The American automaker signed the deal one day after the company ousted global marketing chief Joel Ewanick, and some have suggested that the sponsorship agreement may have something to do with his firing.
Financial details of the seven-year deal were not made public, but sources familiar with the contract have pegged the annual value between $60 million and $70 million. After including an initial activation fee of $100 million, the contract is thought to be worth a total $600 million. GM’s deal is set to begin in 2014 and will grant the automaker the Red Devils’ coveted jersey sponsorship; Chevrolet will have its name emblazoned on the crimson jerseys. The new agreement is a massive increase from the estimated $31 million annual payout by current jersey sponsor Aon.
The club claims to have 659 million supporters around the world, and executives at GM clearly believe that direct access to those fans will help make the automaker a much stronger international brand. Between the sponsorship agreement and upcoming IPO, expected to be priced on August 9, the Red Devils have taken massive steps towards greatly increasing annual revenues and erasing team debt.
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With things like this it might look like an unnecessary cost increase at first glance, but I'd always recommend using language professionals for financial translation, the risk you run without them is sure to cost you much more in the end.Luckily, I can't see machines taking over the jobs of human translators in the near future, as they have done with so many other professions.
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