Governance expert likens the move to a ski resort listing in the Caribbean
Manchester United, the English football team, has filed documents to list its shares on the NYSE, a move that has raised eyebrows given the club’s UK home and large fan base in Asia.
Research released in May by Kantar on behalf of the club shows that the Manchester United fan base, totaling 659 mn people, is mainly centered in the Asia-Pacific region. This prompted an earlier plan to raise $1 bn in Singapore, which was aborted due to market volatility.
The Glazer family – which took control of the club in 2007 – may have been tempted by the more relaxed attitude to dual-class share structures in the US. The IPO prospectus reveals plans for two classes of shares, a model frowned upon in the UK but commonplace in the US.
‘Listing a soccer team on the NYSE is a bit like listing a ski resort on an exchange in the Caribbean,’ remarks Paul Hodgson, senior research associate and chief communications officer at GMI Ratings. ‘It doesn’t make intuitive sense unless there are regulatory (or lack thereof) reasons for doing so.’
Hodgson also gives another possible reason for the decision, noting that ‘the company is taking advantage of the JOBS Act to delay reporting requirements because it is classified as emerging growth.’
The Jumpstart Our Business Startups (JOBS) Act, signed into US law in April, is intended to lighten regulatory requirements to help smaller companies access capital.
Manchester United has filed to raise $100 mn, but this is only a placeholder figure and the actual target is expected to be much higher. The IPO filing says the club needs capital to pay down its debts, which stood at $423.3 mn at the end of March.
