Here's a different way to look at MUPLC
Manchester, England, July 22 (Bloomberg) -- Manchester United Plc shares fell to a six-year low on concern the soccer club is overpaying for defender Rio Ferdinand at a time when other clubs are reining in spending, analysts said.
The 30 million-pound ($47.2 million) transfer from Leeds United, a British record, was announced today. Costs of players may outpace future income from clubs' television agreements, analysts said, forcing teams from Societa Sportiva Lazio Spa to Chelsea Village Plc to slash spending.
Manchester United said in March that rising players' wages will dent profit in the second half. The fee for Ferdinand is the most paid for a player this summer, and the England defender could receive as much as 70,000 pounds a week in wages, newspapers said. Manchester United didn't disclose his salary.
``There's concern about when shareholders will ever get a return and money won't be just ploughed back into the club,'' said Andy Lee, an analyst at Dresdner Kleinwort Wasserstein, with a `hold' rating on stock.
Shares in Manchester United slumped 10 pence, or 8.5 percent, to 108p, their lowest price since Aug. 1, 1996. The stock has dropped 26 percent this year and the company has a market value of 281 million pounds.
Manchester United is betting 23-year old Ferdinand, who helped England reach the World Cup quarterfinals last month, will fix a defense that leaked 45 goals and left the northwest-England team without a trophy for the first year since 1998.
Manchester United said it will pay 15 million pounds of the fee for Ferdinand straight away, and a further 14.3 million pounds by July next year. An extra 4 million pounds payment depends on the performance of Manchester United's team.
Third Transfer Record
Players' wages sapped 39 percent of the club's revenue in its fiscal first half and will increase to account for about 50 percent in the full year, Chief Executive Officer Peter Kenyon said in March. First-half net income doubled to 23.4 million pounds. Revenue during the period was 81.8 million pounds.
The purchase of Ferdinand is the third time in 16 months Manchester United has broken the British record for a player's transfer fee. It paid 19 million pounds for Ruud van Nistelrooij in April last year and 28.1 million pounds for Juan Sebastian Veron three months later.
To be sure, Manchester United is buying a player that will probably help fuel sales of merchandise such as shirts and other gear made by Nike Inc. as well as videos, analysts say.
``This is not just a decision about football,'' said David Pope, an analyst at Brewin Dolphin Securities. ``They will enhance their brand and get new customers through Ferdinand.''
Manchester United, whose players include England Captain David Beckham, next month begins a sponsorship agreement with Nike that's worth 303 million pounds over 13 years.
Manchester, England, July 22 (Bloomberg) -- Manchester United Plc shares fell to a six-year low on concern the soccer club is overpaying for defender Rio Ferdinand at a time when other clubs are reining in spending, analysts said.
The 30 million-pound ($47.2 million) transfer from Leeds United, a British record, was announced today. Costs of players may outpace future income from clubs' television agreements, analysts said, forcing teams from Societa Sportiva Lazio Spa to Chelsea Village Plc to slash spending.
Manchester United said in March that rising players' wages will dent profit in the second half. The fee for Ferdinand is the most paid for a player this summer, and the England defender could receive as much as 70,000 pounds a week in wages, newspapers said. Manchester United didn't disclose his salary.
``There's concern about when shareholders will ever get a return and money won't be just ploughed back into the club,'' said Andy Lee, an analyst at Dresdner Kleinwort Wasserstein, with a `hold' rating on stock.
Shares in Manchester United slumped 10 pence, or 8.5 percent, to 108p, their lowest price since Aug. 1, 1996. The stock has dropped 26 percent this year and the company has a market value of 281 million pounds.
Manchester United is betting 23-year old Ferdinand, who helped England reach the World Cup quarterfinals last month, will fix a defense that leaked 45 goals and left the northwest-England team without a trophy for the first year since 1998.
Manchester United said it will pay 15 million pounds of the fee for Ferdinand straight away, and a further 14.3 million pounds by July next year. An extra 4 million pounds payment depends on the performance of Manchester United's team.
Third Transfer Record
Players' wages sapped 39 percent of the club's revenue in its fiscal first half and will increase to account for about 50 percent in the full year, Chief Executive Officer Peter Kenyon said in March. First-half net income doubled to 23.4 million pounds. Revenue during the period was 81.8 million pounds.
The purchase of Ferdinand is the third time in 16 months Manchester United has broken the British record for a player's transfer fee. It paid 19 million pounds for Ruud van Nistelrooij in April last year and 28.1 million pounds for Juan Sebastian Veron three months later.
To be sure, Manchester United is buying a player that will probably help fuel sales of merchandise such as shirts and other gear made by Nike Inc. as well as videos, analysts say.
``This is not just a decision about football,'' said David Pope, an analyst at Brewin Dolphin Securities. ``They will enhance their brand and get new customers through Ferdinand.''
Manchester United, whose players include England Captain David Beckham, next month begins a sponsorship agreement with Nike that's worth 303 million pounds over 13 years.
