Manchester United Stock Price Declines After Alex Ferguson's Retirement Announcement
The "sudden announcement" yesterday that EPL club Manchester United manager Alex Ferguson will retire at the end of the season has "shaken its shares on the New York Stock Exchange, to say nothing of its effect around the sporting world," according to Rob Hughes of the N.Y. TIMES. The decline "reflects how much of a business sports has become, and how much Ferguson has meant to United’s dominant position in the global game." The "reality is that soccer is more than any business." Its "power, which crosses borders and cultures, derives from its essence on the field, and that is where, undoubtedly, Ferguson has been monstrously successful among his peers." Hughes: "Certainly, the business, now owned by the Glazer Family in Florida is global. Surely, one man is not the whole reason for its global popularity." But without Ferguson, ManU's future "resembles the situation" in the years following the departure of former manager Matt Busby in '69 (N.Y. TIMES, 5/9). CNN.com's Alanna Petroff wrote ManU's "winning team, brand and management are considered to be key reasons behind the company's impressive share price performance." However, uncertainty "now hangs over the stock." London-based City Index Group Chief Market Strategist Joshua Raymond said, "Replacing Alex Ferguson is a monumental task and one that shareholders will watch with great interest and nervous uncertainty" (CNN.com, 5/8). At presstime, shares of ManU were trading at $18.43, down 0.07% from the close of business yesterday (THE DAILY).
GAUGING THE IMPACT: BUSINESS STANDARD's Peter Thal Larsen wrote Ferguson's retirement "should worry" ManU fans and investors as much as it "delights long-suffering rivals." His 26-year run "has gone hand-in-hand" with the club's "impressive financial rise." Ferguson's departure "will reveal how much of that value depends on the manager" (BUSINESS-STANDARD.com, 5/8). REUTERS' Keith Weir noted ManU itself "set out in plain language the importance" of Ferguson when it went public on the NYSE last year. With CEO David Gill "also stepping down this summer, it's suddenly all change at the club." ManU Exec Vice Chair Ed Woodward "will take over many of Gill's duties and work with the new manager on player signings" (REUTERS, 5/8). The GUARDIAN's David Conn wrote ManU can "have all the revenue streams, global sponsors and 'digital followers' possible, yet what might seem a licence to print money flows from success on the pitch and one person, the team manager, is still utterly central to that" (GUARDIAN.co.uk, 5/8).
PAYING TRIBUTE: MARKETING magazine's John Reynolds reported ManU sponsors Aon and Thomas Cook are among those "preparing to pay tributes to" Ferguson. Former club sponsor Umbro, which was the club’s kit manufacturer from '92-'02, took to Twitter, Facebook and Instagram yesterday to "ask fans to choose their favourite club shirt over the period." Sharp Electronics, the club’s shirt sponsor from '82-'00, "paid tribute by wishing Ferguson 'Happy retirement' on Twitter." Meanwhile, some sponsorship experts believe Ferguson’s retirement will "prompt concern among some of the club’s sponsors, particularly those that have recently signed a deal or are about to renew an existing deal." IMG Consulting Int'l Managing Dir Rob Mason said, "It will be a worry for sponsors. Manchester United is the best-supported club in the country and there will be a worry as to whether this success will be continued under the new manager. Ferguson has been a fundamental reason for the success of the club and you are now taking that away" (MARKETINGMAGAZINE.co.uk, 5/8).