Manchester United Out of Champions League Amidst Stake Sale Saga
Poor Season & European Elimination
Manchester United (MANU.us) is one of the most successful British football clubs, but has steered clear of triumphs in recent years and the last time it conquered the Premier League was in the distant 2013. Adding to the dismay, it has seen same-city rival Manchester City dominating the top domestic league, winning seven titles since the start of the previous decade.
This year's performance has been very poor, with coach Erik Ten Hag and some players receiving heavy criticism. The Red Devils currently occupy the sixth place in the Premier League with just nine victories and seven losses [1], while their presence on the European competition has also been disappointing.
The terrible showing in the 2023/2024 UEFA Champions League came to an end on Tuesday, after a bitter defeat from German Bayern Munich at Old Trafford. Manchester United was eliminated from the next stage (round of 16), finishing at the bottom of Group A, with only one victory and a draw. [2]
Economic Impact
The lack of success at the group stage and the failure to advance to the knockout phase, means less money for the NYSE listed club. Teams receive €2.8 million each for every win in the group stage of the UEFA Champions League and €930,000 for every draw, in the current 2023/2024 season. Furthermore, Manchester United missed out on at least €9.6 million, which it would receive if it had advanced on the next round. Coming in last also means that it won't make it to the second-tier Europa League either, which would have resulted in a €500,000 influx. [3]
The last time the clubparticipated in the top European competition was in the 2021-2022 season, when it had managed to advance on the round of 16 teams, playing two extra matches. It did not participate last year (2022-20230) though, resulting in lower Broadcasting revenue. Although Manchester United (MANU.us) achieved record revenues in Fiscal 2023 (July 2022-June 2023), Broadcasting dropped 2.7% y/y, to £209.1 million (roughly €240 mln). [4]
Stake Sale Saga
Manchester United (MANU.us) is one of the most famous and valuable clubs in the world, while being publicly traded on the New York Stock Exchange for more than a decade and as of Tuesday's close it had a market capitalization in excess of $3 billion. It generated record revenues of £648.4 million in FY2023, up 11.2% y/y, expecting to set new all-time highs in current fiscal 2024 (£650-£680 million).
The lackluster on-field presence in recent years though, does not sit well with fans and there are constant calls for an ownership change. Former player and team icon David Beckham favors such outcome, saying a couple of months back on CNBC that "it's the right time for somebody else to take over" and return the Red Devils to glory.
A year ago, the Glazer family formally announced it was exploring "strategic alternatives" that included a sale of the club. Despite news that a deal is close, no agreement has been announced yet and it looks like it won't lead to a majority ownership change. According to a recent report from Sky News, INEOS founder Sir Jim Ratcliffe is set to acquire a 25% stake in the company in a 1.25bn deal [5]. It will be interesting to see if the team's elimination form Champions League acts as an accelerator.
The stock of Manchester United had posted its best month In November of 2022, after the club opened the door to a potential sale. It runs a losing 2023 though and news around this process have created volatility.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 13 Dec 2023 https://www.premierleague.com/tables | |
| Retrieved 13 Dec 2023 https://www.uefa.com/uefachampionsleague/match/2039164--man-united-vs-bayern/standings/ | |
| Retrieved 13 Dec 2023 https://editorial.uefa.com/resources/0283-1874e21d8957-30a439a30e08-1000/20230707_circular_2023_35_en.pdf | |
| Retrieved 13 Dec 2023 https://ir.manutd.com/~/media/Files/M/Manutd-IR/Governance Document/june-2023-mu-plc-earnings-release.pdf | |
| Retrieved 18 May 2024 https://news.sky.com/story/manchester-united-and-ratcliffe-to-confirm-stake-sale-next-week-13022660 |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.