News was revealed yesterday that legendary investor George Soros has taken a large position in the soccer team Manchester United (MANU). This announcement came on the day Manchester United opened league play in the English Premier League. The team had a surprising 1-0 loss to Everton, while shareholders had an unexpected rally in the after hours trading session on the heels of the Soros announcement.
According to a recent filing, Soros now owns 3.1 million shares of Manchester United. Soros' stake is equivalent to owning 7.85% of Class A shares of Manchester United. Despite the large ownership of Class A shares, Soros stake is about 2% of total ownership of the soccer team. The company's Class B shares are 100% owned by Malcolm Glazer and his family.
Back in July, I highlighted the future IPO of Manchester United, the popular soccer team from England. Shares of Manchester United went public at $14, pricing lower than the expected range of $16 to $20. Over 16 million shares were sold by the team at $14, raising money to help pay off a small amount of debt. Manchester United has been named the number one team in the world by Forbes magazine for the last eight years.
Recently, Manchester United made a splash in the transfer market by adding Dutch forward Robin Van Persie. Van Persie comes from rival club Arsenal and could add some goal scoring depth for the team this year. In 38 league contests last year for Arsenal, the forward scored 30 goals. Van Persie led the league with his 30 goals and was followed closely by Manchester United forward Wayne Rooney (26). The team now starts the season with last year's two leading scorers in the EPL.
Another recent announcement from the club was their new sponsorship with General Motors (GM). Beginning in 2014, GM's logo will be front and center on Manchester United shirts. General Motors joins a list of shirt sponsors for Manchester United that has also included Sharp, Vodafone, AIG and AON. General Motors has already announced that it will be the Chevrolet brand displayed on the jerseys. The new seven year partnership shows a new strategy for General Motors as well. GM has previously announced that it stopped paying for advertisements on Facebook (FB). The company also announced it would not be participating in Super Bowl commercials next year after being a staple advertiser over the last decade.
Over the seven year partnership, General Motors will pay $559 million for the new sponsorship. The sponsorship will begin with a $70 million payment for the 2014 season with the amount increasing each year until the end of the deal. In comparison, the current shirt sponsor paid $125 million over four seasons for its logo on the jerseys.
Shares are trading at $13.22, slightly below the pricing level of $14. Shares recently hit a new low of $12.80 recently. The Soros announcement has reestablished interest in the soccer team and has shares trading up a modest 1% today. I stand behind the shares of the biggest soccer team in the world and think that there is still a large amount of fans who will buy shares in the soccer team. Soros' interest in the team could be the beginning of mutual funds and hedge funds taking ownership stakes in the popular soccer team.