Singaporean Fans Keen to Buy a Stake in Man Utd
Magdalen Ng – Straits Times Indonesia
Singapore. Fans are getting excited at the prospect of Manchester United listing on the Singapore Exchange, with some even ready to open their wallets.
Entrepreneur Cheo Ming Shen, 28, who has been supporting the English Premier League (EPL) football club for 16 years, is already limbering up.
“When it was listed in Britain, I was too young to buy a stake. Now that I’m working and have the means, I definitely want to have a stake in the club, no matter how little the say is,” he said yesterday.
Cheo added that he would not see Manchester United shares as a primary investment and that his stake in any initial public offering (IPO) would depend on his financial situation.
“This is something emotional. I am a strong supporter of the club. I’ll just put in money and not worry about it,” he said of the Red Devils.
A fellow fan, CIMB analyst Kenneth Ng, is less inclined to do the same: “Liking Manchester United as a football club does not mean that I have to buy their stock. I can just buy their merchandise and kits.
“Man U is an incredible lifestyle brand. Unfortunately, the Glazers have taken it into debt. So, to decide whether I will buy in, I will look at what the valuations are and whether the cost of debts will weigh down on its profits.”
Manchester United is owned by the Glazer family, who bought the club in 2005 for £790 million ($1.3 billion). They have not been popular with fans, who blame them for burdening the club with huge debts.
The club’s latest annual report shows that its debt is about £700 million, with annual interest payments of about £40 million.
Other analysts have pointed out that a football club has many more risk factors to consider than other businesses, including sky-high cost structures. Footballer Wayne Rooney does not get paid peanuts, after all.
That can make it a very risky investment, particularly as a single game can make a season a success or a failure.
Phillip Securities managing director Loh Hoon Sun said: ‘Sometimes, clubs like this depend on a few stars to win their matches. These stars can join another club and, if the clubs do not win, they may earn less.’
Manchester United is the most successful team in the history of English football, with 19 league titles under its belt.
GCP Global executive chairman Gabriel Yap said he would buy Manchester United shares if the IPO is priced attractively and all the risks are accounted for, despite being a Liverpool fan.
He said some listed English clubs have very good top-line growth but are usually in deficit because of huge sums spent on buying players and paying their wages.
He said: “As an investor since 21 years ago, I always separate the heart from the brain, which is where the analysis comes from.
“I can always use the money that I make on the Man U stock to go watch Liverpool play.”
Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 021 2553 5055.