Manchester United Becomes First Team to be Valued at 3 Billion Dollars

American business magazine, prostate | Forbes has revealed Premier League giants Manchester United have become the first sports club to break the $3 billion valuation barrier.

The shares of the club offered to the public last August at $14 did poorly in the beginning but the price has soared up in the last few days touching at $17.

Only in November of last year, sick the club’s gargantuan debts have fallen below £400 million ($628.5m) for the first time since the Glazers took over at the club in May 2005.

The Florida based owners, order borrowed £515 million ($809m) in completing the takeover of the club at £790 million ($1.2bn) seven years ago and have been re-financing the debts since through public offerings or IPO and bonds in New York. At the time of the IPO, serious concerns were raised around the prudence of financial investment into a debt-laden sports team and football journalists and fans, unhappy at Manchester United’s leveraged takeover and the damage it has done to United’s finances, predicted a poor outcome.

However, the worth of Manchester United as a global brand and a remarkable increase in sponsorships since the Glazer takeover were not to be under-estimated. At an initial value of $14 per share, Manchester United was one of the safest offinancial bets that you could make in 2012. The club was generating sufficient revenues to stay competitive on the pitch and keep paying down the loans. No other club in England could make it work.

Now, according to Forbes, Manchester United’s stock has outperformed the S&P 500, which is basically a stock market index based on the market capitalizations of 500 leading publicly traded companies in the U.S. stock market, as a result of which it has pushed up the club’s enterprise value to $3.3 billion (debts included), which is the highest value for any team in the world. NFL’s Dallas Cowboys are second most valuable team in the world, worth $2.1 billion.

Manchester United however, remained third in the Deloitte Money League table for 2012/13 behind La Liga giants Real Madrid and Barcelona.

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