Billionaire Elon Musk made headlines in 2022 sharing on Twitter that he was going to buy the English Premier League team Manchester United.
The tweet was part of an ongoing joke by Musk but came as the team is exploring sale options. Another company that owns the New York Rangers (NHL) and New York Knicks (NBA) is also considering a partial sale of the teams.
What Happened: Manchester United PLC MANU went public in 2012 but remained under the control of the Glazer family, who purchased the team in 2005. For years, rumors of a buyout of the team popped up, including the rumor started by Elon Musk.
“Although, if it were any team, it would be Man U. They were my fav team as a kid,” Musk tweeted.
While Musk didn’t end up buying the team, he might have inadvertently kickstarted talks of team management to explore a sale.
Soccer agent Jon Smith said in August 2022 that he believed a sale of Manchester United would happen “within the next 24 months.”
Soccer report Luca Bonaiti tweeted the Glazers seemed more open to selling the team if they failed to qualify for the Champions League and the family had “never been this open to selling before.”
In November 2022, Manchester United formally announced its board of directors was “exploring strategic alternatives for the club.”
“As part of this process, the Board will consider all strategic alternatives, including new investment into the club, a sale, or other transactions involving the company,” the team said.
Interested parties include Jim Ratcliffe and Michael Knighton. Formula 1 driver Lewis Hamilton was also linked with teaming up on a bid.
Shares of Manchester United rose this week on new reports that “high-wealth individuals” in Qatar were interested in buying the team. A report from the Daily Mail said this could include a “massive offer” for the team as early as next week for the team, which was called one of “football’s crown jewels.”
PA Sport journalist Jamie Gardner tweeted Wednesday that Qatari Sports Investments was the group interested in Manchester United. The investment group was considering investments in other Premier League teams and might only bid for a minority stake.
The deadline for bids on Manchester United by the Glazer family was reported to be mid-February.
New York Knicks and Rangers Join Sales Talks: Along with the ongoing sale process for Manchester United, another publicly traded sports team could be up for sale, or at least a portion of it.
In this case, the sports team is actually two with Madison Square Garden Sports Corp MSGS owning both the Knicks and Rangers.
MSG Sports President and COO David Hopkinson share that the company was open to selling a partial stake in one or both of the legendary sports franchises, according to Sportico.
“We have no plan to sell either team,” Hopkinson said during the company’s earnings call Tuesday. “No current plans there, but we certainly won’t rule out the possibility of selling a minority stake in the Knicks or Rangers.”
Hopkinson highlighted new rules from the NBA that allowed private equity investors and sovereign wealth funds to invest in teams.
Private equity company Silver Lake owns around 10% of MSG Sports and had been interested previously in owning a larger stake in the company.
Why It’s Important: Even with shares of Manchester United up 72% in the last year, the company could be undervalued compared to where a potential sale price could land. The team was valued at $4.6 billion and $4.7 billion by Forbes and Sportico, respectively.
The company has a current market capitalization of $3.4 billion and an enterprise value of $4.2 billion.
Reports said the Glazer family was looking for something more in the $5 billion to $7 billion range to sell the team.
Benzinga previously calculated the sale range between $4.65 billion and $8.28 billion based on team valuations and multiples on recent sports team sales.
The Knicks and Rangers have valuations of $6.5 billion and $2 billion from Sportico, respectively. Both team valuations include Madison Square Garden, where the teams play. This asset is owned by Madison Square Garden Entertainment Corp MSGE.
There has been a limited amount of public sports teams over the years, giving limited access to investors to invest in the success of teams and professional sports leagues.
Two of the public sports teams could be acquired and exit stock exchanges.
Coincidentally enough, Ted Leonsis, who owns the Washington Wizards and Washington Capitals, said recently that a “significant number of teams will go public in 2023,” according to Sportico reporter Eben Novy-Williams.
MANU, MSGS Price Action: At market close Wednesday, Manchester United shares were up 10.51% to $23.34 versus a 52-week range of $10.41 to $25.24.
Madison Square Garden Sports shares were up 3.82% to $188.76 versus a 52-week range of $130.61 to $188.88.
Photo: stockphoto mania via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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