The huge projected cost of Manchester United’s new stadium may have contributed to the club’s share price hitting a 52-week low. As well as the £2billion price tag — and some well-placed figures believe that is a conservative estimate — there has been no confirmation by the club how the new 100,000-capacity stadium next to Old Trafford will be funded.
The announcement of the stadium plans on Tuesday
was followed by the share price on the New York Stock Exchange falling to
$13.22 the following day — more than $5 less than the highest price over the
past year.
Kieran Maguire, the football finance guru, said: “It
suggests the markets are cautious about the club’s prospects following the
announcement of the new stadium and will await details of how it will be funded
with interest.”
The share price may also reflect United’s struggles on the pitch, while their co-owner Sir Jim Ratcliffe’s description of players as “overpaid and underperforming” cannot have helped shareholder confidence. You don’t talk your own product down – remember Gerald Ratner: https://www.businessblogshub.com/2012/09/the-man-who-destroyed-his-multi-million-dollar-company-in-10-seconds/
The more I hear about Ratcliffe, the more I think he is another businessman who doesn't understand that football is a unique economic sector, certainly in the UK.
Share prices usually reflect confidence in financial growth,
so the impact of United missing out on up to £100million from not
being in the Champions League next season could be significant. It now looks as
though the only way of that happening is by them winning the Europa League.
Meanwhile, United’s new chief operating officer, Collette
Roche, this week refused to rule out a rise in season-ticket prices, saying:
“We are still working through what we are going to do for next season.”
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