There was undoubtedly something unique about Manchester United's (NYSE:MANU) initial public offering as it made its way onto the markets on Friday, August 10. Operating as a foreign enterprise, the company which takes claim as the owner of the most popular English soccer club attempted to razzle-and-dazzle the US investment base through its already established fame. Yet expectations fell short in a country where the term "football" takes on a different meaning altogether from the rest of the world.
Shares of Manchester United both opened and closed on Friday with their initial public offering price of $14/share. This came in below expectations of a range varying between $16-$20/share. Altogether, the company sold $16.7 million shares and raked in a total of $234 million in the offering. At its current price of $14/share, the company now trades with a market capitalization of $2.3 billion.
Manchester derives revenues from three primary sources found in its segments of Commercial, Broadcasting, and Matchday. The commercial side of the company includes all the retail, merchandising, apparel, and product licensing revenues which accounted for £103.4 million in 2011. The broadcasting sector includes the company's own television channel and global media rights which accounted for £117.2 million in the fiscal year 2011. Last of all the matchday sector includes the attendance of games at Old Trafford and accounted for £110.8 million in 2011.
As seen in the charts above taken from the company's F-1 filing, the company's growth on the global scale has increased significantly in recent years. According to the same filing, it was stated that the global sports industry is expected to grow from $119 Billion in 2011 to $145 billion by 2015. The company's revenue expansion into new media & mobile has been highlighted as one of the strongest sectors of increasing growth. This can be illustrated by the increasing amount of Facebook (NASDAQ:FB) connections and areas with access to MU Mobile.
Taken as a whole, investors will find that Manchester United operates most akin to the public sports franchise found in the Madison Square Garden Company (NASDAQ:MSG). An investment in Manchester United also taps into the lucrative market of sports broadcasting already recognized by established firms such as Walt Disney Co. (NYSE:DIS) through its ESPN syndicate. The company has also successfully maintained attractive marketing partners found in Nike (NYSE:NKE), AON, DHL, Epson, and General Motors (NYSE:GM) to name a few.
Despite the stability of the company's vast 134-year history, however, it remains difficult to accurately gauge the future trading interest in the company's stock. For starters, the dual-class share structure essentially keeps the six lineal descendants of Malcolm Glazer in full decision-making control. Likewise, the company has been highly criticized for its large debt burden brought on by the Glazers. Nevertheless, with a vast growing fan base and expansion into global markets, Manchester United may yet prove its winning franchise into a winning public company as well for its newly-introduced investors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.