Flotation could lead to United sale

Manchester United’s proposed flotation on the New York Stock Exchange could be a precursor to the club’s eventual sale, according to a financial expert.

United have applied to be listed in the US in the hope of raising $100 million (€79.7m) from selling shares in the club.

But while the Glazer family have structured the plan to ensure they retain priority voting rights over any new investors, it could ultimately open the door to the Americans relinquishing control.

“Most clubs are available at a price, if the truth be told,” Karish Andrews, senior associate in the Sports Group at Lewis Silkin LLP, said.

“There is only possibly Manchester City and Chelsea where there is no amount of money when the owners would be inclined to sell.

“I think that is the case with Manchester United and the Glazers.”

Andrews believes the decision to list on the New York Stock Exchange is finally an admission by Malcolm Glazer that he saddled the club with too much debt. Proceeds from the sale will go to pay an unspecified portion of United’s £423m (€526.4m) debts which were loaded on to the club when the Glazers bought it in 2005.

Interest payments and associated costs on those loans have amounted to more than £500m (€622m) in interest.

“It is an admission by the Glazers,” said Andrews of the decision to float the club, after a similar plan in Singapore last year was halted because of the volatile global economy.

“They have always not taken responsibility for admitting their takeover saddled the club with debt and massive interest payments.

“From what I have seen in the risk factors they have admitted that has been the case.”

Andrews said supporters, who have been opposed to the way the club’s debts have risen since the takeover, should welcome the latest move.

“I think Manchester United fans will appreciate that the Glazers have come clean and admitted that has been an issue for the club,” he said.

“I think they should see it as a positive step. They (the club) have said the sole purpose of raising the money is to pay off the debt simply because of high interest payments.

“That money has stopped them being so buoyant in the transfer market.’’

While no dividend will be paid to investors, who will hope to make their money from resale of their shares, the chance to own a part of one of the world’s most famous clubs is bound to be a draw.

However, those thinking of taking the plunge must take into account certain factors, according to Andrews.

“Manchester United’s success is based on having the best manager of all time which has led them to be successful on the pitch and that generates interest from fans, particularly overseas,” he added.

“If you take a pessimistic view, then Sir Alex can’t go on forever and their ‘noisy neighbours’ City have just beaten them to the Premier League title.

“If that developed into consistent success for City at the expense of United, that would have some effect in terms of their commercial future.”