Shares of ManU stock on the N.Y. Stock Exchange have fallen from $14 to $12.90 a share since debuting almost a month ago, according to THE ECONOMIST. Many investors recall "how a spate of European football-club IPOs in the 1990s ended badly." Is there "a case for backing professional sports teams off the pitch as well as on it?" European football teams "have been particularly patchy bets." Many clubs are managed with "the goal of securing trophies, not turning a profit." Things may be getting better. The EPL recently signed a domestic TV deal worth over £1B ($1.6B) a year, and is "expected to secure a similarly rich pact for its foreign rights." ManU itself derives around a third of its income from merchandise sales, which do not directly depend on its record on the pitch. The Financial Fair Play salary restrictions, scheduled to take effect across European football in the coming years, should stop "wage bills from spiralling ever higher." Much of this good news is already baked into the share price of ManU, whose investors include George Soros, but it suggests that European football teams "will have a better chance of earning sustainable profits" (THE ECONOMIST, 9/8).
