NEW YORK (VOA) — Britain’s Manchester United soccer team is in deep financial trouble despite its winning tradition that dates to 1878. Its fans are known to resent the club’s American owners, the Florida-based Glazer family, which wants to sell stock in the team to help manage its huge debt.
Manchester United fans protested in 2005 against the sale of their team to American billionaire Malcom Glazer. Many considered him a financial predator who would not invest in quality players to remain competitive. Today, the team may be looking to investors to raise capital to offset the team’s debt of more than half a billion dollars. Analysts say much of it stems from Glazer’s leveraged purchase of the club.
Initial market reaction appears muted. Jeffrey Sica, president of Sica Wealth Management in Morristown, New Jersey, advises caution for clients who invest in sports teams.
“You have to think like an investor. An investor thinks about what is the profit going to be at the end of the road. The fan thinks about winning games. And if the two don’t correspond with each other, then it’s not worth investing in,” he said.
The Glazer family recently filed for an IPO, or Initial Public Offering, on the New York Stock Exchange. Sica says the New York Exchange represents a larger market than the Singapore or Hong Kong exchanges, which the family previously considered. But the timing, price and number of shares remain unclear.
Glazer’s other sports franchise, the Tampa Bay Buccaneers American-style football team, is privately owned.
Fans reacted last year when word first spread of a Manchester United IPO.
"It's a good way of reducing the debt and providing funds for future players," said one man.
"If the Glazers just take the money, they will be vilified even more by United fans, but if they wipe out the debt, I don't see a problem," said another fan.
Sica says Manchester United could continue its winning tradition, but that does not mean investors will profit from it. He notes that the IPO is meant to address the team’s debt, not necessarily its performance on the field.