1231 Tuesday 18 December 2018

Football is, more than ever, a business. Therefore, when the announcement of Jose Mourinho’s departure from Old Trafford this morning, the city cast its eye on stock in Manchester United. The Börse Frankfurt was the first to react to the news with MUF.F jumping almost 1.5% straight away, and trading will resume on the NYSE at 1430 GMT where the share value is currently $17.30.

After the bell in the US last night, Jefferies placed a Buy recommendation on MANU stock with a $26 target price adding the note “While team performance can fluctuate season to season, MANU’s history of winning and success are unmatched, and that has led to the storied franchise having the highest global following of any other sporting team… This in turn creates unparalleled reach, which has real value”. And this is where the money trail leads.

Manchester United has a support base that extends further than the football field. When a sculpture of Man Utd legend, David Beckham was unveiled at the Buddha in Bangkok's Pariwas Temple, the senior monk of the temple was quoted as saying "Football has become a religion with millions of followers" and millions of followers translates into £billions in terms of merchandise and perhaps more importantly, advertising and TV rights.

The TV rights to show the Premier League for the 2019-2022 time period sold for £4.46bn, add to that the multi-million cash injection that the UEFA Champion League offers, plus domestic competitions, Manchester United’s cash-flow thrives without a ball being kicked. There is also the advertising, sponsorships and pre-season endeavours to add to the bank balance. In terms of advertising and sponsorships, UTD sold the naming rights of their Carrington training ground to insurer AON for a reported £160m and their shirt sponsor Chevrolet paying £47m per season for the privilege. Pre-season tours of Asia and the United States in recent years have seen the club extend their global reach, and therefore cash-flow.

In November’s trading update, United’s executive vice-chairman, Ed Woodward stated the £615-630m revenue guidance remained in place and was quoted as saying “We remain on track to deliver our record full-year revenue guidance, underpinning our long-term, strategic plan to create sustainable growth across all areas of the club”.

Managers come and go, but as they say ‘business is business’ and right now, things look pretty good for Manchester United off the field.

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