Shares of ManU "surged almost 5%" after the club announced its new, $130M a year kit deal with adidas, according to Mike Ozanian of FORBES. Wall Street "now affords" ManU an enterprise value of $3.6B. Math: market value ($3.05B) + long term debt ($613M) – cash ($57M). In April, Forbes "valued Real Madrid as the world’s most valuable team," worth $3.44B, with Barcelona second at $3.22B, and ManU third at $2.81B. The team "now commands both the richest uniform and shirt deals in the world." It "may be tough" for Real Madrid to catch ManU. Spain "is looking to have La Liga teams negotiate their next television deal collectively." This "will likely eliminate the huge television revenue advantage" Real Madrid and Barcelona ($182M each, with number two Atletico Madrid pulling in just $61M) currently enjoy over their rivals (FORBES, 7/15). In Toronto, Morgan Campbell wrote the sponsorship deal "is worth a lot of money to both sides in the long term" -- adidas pays $1.28B to provide ManU’s uniforms for a decade. But the agreement, which takes effect for the '15-16 EPL season, "also offered an immediate payoff both parties." Adidas will not sell a ManU jersey for at least another year, but news of the deal "boosted their stock price" by $1.95 to $73.48 per share by Monday’s close. And on Tuesday, ManU’s stock price rose to $18.60. So while deals like these are about marketing, merchandise and branding, experts point out that they are also "about strengthening franchise value." Valuation firm Dartmouth Partners Managing Partner Drew Dorweiler said, "These are sophisticated purchasers. This transaction goes straight to the bottom line. It’s fair market value" (TORONTO STAR, 7/15).
The Caterham F1 team has "laid off more than 40 staff as their new owners seek to reduce costs," according to Andrew Benson of the BBC. Among the departures are Deputy Technical Dir Jody Eggington and Head of Track Operations Gerry Hughes. Caterham "refused to comment on the development, which is expected to be the first of several moves to cut expenditure at the struggling team." Earlier in July, Owner Tony Fernandes "sold to a consortium of investors, whose identity is yet to be revealed." The team said the new owners were a "Swiss-Middle Eastern group." Sources "close to the deal" said that the money is "mainly from the Middle East but it is being handled by administrators from Switzerland." The new owners installed Dutch former F1 driver Christian Albers as team principal, with former Midland, Spyker and HRT boss Colin Kolles as an adviser. Sources said that the departures "appear to be mainly those with the largest salaries -- many are heads of department or senior staff -- although some more junior employees have also left" (BBC, 7/16).
Bulgarian football club Lokomotiv Plovdiv Owner Konstantin Dinev will "transfer his shares in the club to a supporters group who will not only take over ownership but also the day-to-day running of the business and playing departments," according to Alexander Krassimirov of INSIDE WORLD FOOTBALL. The club "will be managed by the 'Future for Lokomotiv' supporters association." The first task for the fans "will be to find a new sponsor, just several days before the start of the Bulgarian Championship." It is not clear "whether the debts of Lokomotiv will be transferred to the new management or whether they will be paid" by Dinev (INSIDE WORLD FOOTBALL, 7/16).
Sportswear retailer Sports Direct Founder Mike Ashley has "pulled out of a contentious bonus scheme that gained the approval of Sports Direct shareholders just two weeks ago," according to Andy Sharman of the FINANCIAL TIMES. Ashley, who owns EPL side Newcastle United and "holds the unusual role of executive deputy chairman" at Sports Direct, said that he "did not wish to be awarded any shares" under the '15 incentive plan. The scheme, which was "voted through at a six-minute meeting two weeks ago," proposed to allow Ashley and "all eligible" employees to split £200M ($343M) of shares. Sports Direct Chair Keith Hellawell said in a statement ahead of "full-year results" on Thursday, "Following recent unhelpful speculation surrounding his potential allocation, he is determined to ensure that there is the maximum number of shares available for the eligible employees." Ashley "receives no salary from the group" and now does not expect "any other share-based incentive scheme to be proposed to shareholders in relation to his role as an executive director of Sports Direct" (FT, 7/16). In London, Graham Ruddick wrote in a piece originally published in January Sports Direct "may well be the craziest business on the high street." Not only is it run by Ashley, a "pantomime villain in Newcastle, but it has publicly fallen out with one of its two biggest suppliers, employs the vast majority of its workers on zero-hour contracts and has stores that resemble a jumble sale." And yet, "while Sports Direct may be unconventional, it is also hugely successful." Last year its shares rose 86% and its sales "were up" more than 20%. The "key to Sports Direct is its logistics." The ability of the company to "move stock around -- whether to stores or to a customer's home via online delivery -- quickly and efficiently." Ashley "is at the heart of it." In football circles he is "lampooned as a clueless Cockney who hired Joe Kinnear as Newcastle's director of football, renamed St James' Park and made Wonga the club's sponsor." But as a retailer, he "has few peers." His "genius was in the business model he created by buying up brands such as Dunlop, Lonsdale and Slazenger to sell alongside Nike and adidas" (TELEGRAPH, 7/16).