OK, so how about those dual-class share structure IPOs! There is another hot IPO coming to market. This one has literally hundreds of millions of fans, will be a billion-dollar-plus IPO, is extremely followed by the public, almost everyone knows its name and what it does, and it seems that the public just can’t wait to get its hands on it. No, this is not some crummy Web 3.0 (or it just Web 2.0 still?) outfit run by young guys who don’t chase profits the same way that investors prefer. This is Manchester United.
In America we call it Soccer. Elsewhere it is Football, and if you look at what America calls football and what the world calls football it is pretty evident that we in America have hijacked a sports name. At any rate, Manchester United will be public in about a month and this will challenge London for the top sporting news of the summer.
CNBC said that fans are probably willing to overpay to get shares.
Manchester United has a fan base of supposedly over 600 million. Malcom Glazer paid about $1.2 billion back in 2005. By conducting an IPO he will raise funds and limit some of his financial risks, while still maintaining absolute control. For all practical purposes this structure is almost no different from Mark Zuckerberg at Facebook, Inc. (NASDAQ: FB). It is also like the Murdoch stake at News Corp. (NASDAQ: NWSA).
Manchester United shares will trade in New York because the London Stock Exchange is more strict on share classifications. In some ways this will just be a tracking stock. The team is profitable, but it also has a large debt-load as well now.
You can buy a piece of the Green Bay Packers. Maybe, if someone will sell their shares to you. You can get indirect team ownership of the Atlanta Braves by buying Liberty Media Corporation (NASDAQ: LMCA) or a piece of the Knicks by buying The Madison Square Garden Company (NASDAQ: MSG). Those shareholders in MSG or in Liberty might not have much in the way of rights in determining how the clubs are run, but they also have other operations outside of one team.
Look for Manchester United’s IPO to price some time in August. If the deal is carried out like the shenanigans of the Facebook IPO, go ahead and look for shareholders to get screwed here too.
JON C. OGG