SBD/August 24, 2011/Facilities

ManU Could Sell Naming Rights To Practice Facility To Raise Funds

Carrington could get a new name in another effort to raise money by the Glazers

Manchester United Owners the Glazer family is “considering selling sponsorship rights to the club’s Carrington training ground,” according to Paul Kelso of the London TELEGRAPH. Carrington, “a 108-acre complex comprising 14 pitches and state-of-the-art facilities is synonymous with the club and the development of young players and naming rights is an option.” ManU owns the "freehold to the complex," and unlike Old Trafford stadium, Carrington "was not put up as security in the 2009 bond issue that raised more than [US$824.7M] to ease the Glazers' interest burden on their acquisition debts.” The “bond prospectus did allow for Carrington to be sold and leased back to raise finance,” but given the US$16.5M per year training kit deal with DHL announced earlier this week, a naming-rights agreement “could be lucrative” (London TELEGRAPH, 8/24).

EASTERN INFLUENCE: The FINANCIAL TIMES’ Kevin Brown cited sources as saying that the Glazers’ decision to list in Asia "will raise the club’s profile," allowing it to "tap fresh commercial opportunities from Indonesia to China." But it “may not be that simple.” The club’s “opaque finances are seen by sceptics as a key reason why Manchester United decided to locate its IPO in Asia rather than in London, where there is scepticism about the business models of football clubs whose revenues largely disappear in ever-inflating player salaries and transfer fees.” The "air of mystery has been compounded by the club’s surprise choice of Singapore for its IPO, rather than Hong Kong, as had been widely expected -- a decision described as ‘hard to explain’ by one banker involved in early discussions on the listing." Sources said that the “driving force was a desire to avoid over-identification with China, and to tap the very large fan base among the 600M people of relatively well-developed South-East Asia.” Bankers said that it is "difficult to envisage a serious financial issue that would not be caught by Singapore’s listing requirements, but it is possible that the Glazers might find the exchange’s continuous disclosure regime more amenable than Hong Kong’s more rigid rules-based approach" (FINANCIAL TIMES, 8/23).

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