Manchester United’s summer has not gone as planned so far in the transfer market, with no players signed to date.
But a bigger problem is brewing in financial terms as the club’s share price has been crashing on the New York Stock Exchange.
“Price now down 47% since last October as market spooked by general economic fears and cost of restoring squad and Old Trafford, wiping £1,319,000,000 [£1.3 billion] off the club value,” reports football financial expert Kieran Maguire.
Manchester United shares fall to record low as New York takes another tumble. Price now down 47% since last October as market spooked by general economic fears & cost of restoring squad & Old Trafford, wiping £1,319,000,000 off the club value #Glazernomics #MUFC pic.twitter.com/ipkb2EchhA
— Kieran Maguire (@KieranMaguire) June 13, 2022
Another commentator noted on Twitter that “Financial analysts [are] forecasting financial losses will continue into next year … One expects losses into 2024. Yet shareholder dividends continue to be paid, with the next one on 24th June.”
UNITED's share price tanking again today.
Financial analysts 👇 forecasting financial losses will continue into next year (below the yellow line). One expects losses into 2024. Yet shareholder dividends continue to be paid, with the next one on 24th June 🤔🙄👉🗑️ pic.twitter.com/hs6FNkb5Ah
— Toe In The Water (@ToeInTheWater1) June 10, 2022
And The Athletic’s Laurie Whitwell says the share price is the lowest, now, that it has ever been.
“After a season of record lows on the pitch for Manchester United, June 13 marked another in the stock market.
“When trading closed, United’s share price on the New York Stock Exchange was $11.07, a figure not touched since the club launched its initial public offering on August 10, 2012. When trading opened on June 14 it dipped below $11 for the first time.”
The fact that majority shareholders, the Glazer family, continue to pay themselves half-yearly dividends to the tune of around £10-£15 million each time, despite the losses and debts, does not go down well with United fans, to say the least.
One of the reasons for the dip is that two of the Glazers, Kevin and Edward, sold a huge chunk of shares when the share price was high last October following Cristiano Ronaldo’s arrival at the club.
Whitwell notes that “The Glazer brothers recouped £137 million from that sale, with none of the money going to the club, meaning the family have cumulatively made close to £450 million from United since taking over in 2005 at a personal cost of £270 million, while still owning 69 per cent.”
But what does this all mean? Is this the reason that United haven’t made any signings yet this summer? Is the club broke, as share prices reach this all-time low?
Well, the good news is that fans should not be too concerned that these horrific figures will impact the transfer kitty. It is, in fact, the other way around – the fact that United intend to spend big in this summer’s window is a factor pushing the price down, because investors see the club going even further into debt, and have become a little twitchy.
“United’s falling stock prices are a reflection of the wider economic fears in the market as well as the intended outlay to overhaul the playing squad and regenerate Old Trafford,” The MEN explains.
Moreover, as was the case with the Ronaldo signing, the right, exciting transfers this summer will boost confidence, boost shirt sales and could then push the price back up.
Nonetheless, Whitwell says that the share price is always going to struggle while the Glazers are at the helm, because they have proven themselves to be bad for the club. If there was a hint that they might be willing to sell, investors would then get interested.
“United’s low share price, however, in part reflects the industry acceptance that the Glazers are in charge for the long haul,” he says.
“Investors might speculate in the hope of a sale in the medium term, and good profit, but brokers have been given little encouragement to that end.”
Long term, the Glazers will continue to increase the club’s debt and drain millions away for themselves, which could ultimately bankrupt the club. But for now, for this transfer window, it will be business as usual.