United chief executive promises funding for players

David Gill
Manchester United chief executive David Gill. Photo: PA

David Gill has promised to ensure Manchester United will invest in the squad despite a disappointing start to the club's bid to raise money in America.

Chief executive Gill believes Manchester United will continue to grow despite a disappointing share price when the club was listed on the New York Stock Exchange.

United, bought by the Glazer family in 2005 for about £800million, offered 16.7m shares - equal to a 10% stake - at a price of 14 US dollars (around £9) each before listing on the New York Stock Exchange, but there was little price movement in early trading.

The offering was substantially lower than the 16 to 20 US dollars originally proposed by its advisers - which would have valued the club at £2.1 billion at the top end.

"We fully understand and the owners fully understand that what happens on the pitch is crucial to us and we will make sure there are sufficient funds to invest in the team going forward," said Gill.

He claimed the arrival of the Glazers and the debt the club subsequently incurred had not hampered the success Sir Alex Ferguson's men had enjoyed on the pitch.

And he pinpointed the example of their shirt sponsorship deal with Chevrolet as proof that their growth revenue remained as strong as ever.

"The level of debt that we've had at the club since they've taken over hasn't impacted on what we've done as a team.

"We've won four Premier Leagues, we've been to the Champions League final three times, we've had ongoing success on the pitch.

"We're comfortable with the leverage we've had and we believe that given the growth opportunity we've got ahead of us - for example we've signed Chevrolet to a seven-year shirt sponsorship commencing in 2014, which is over twice what our current shirt sponsors make - we've got a lot of interesting and good opportunities to improve our cash flow going forward."

The lower flotation price comes after the Glazer family, which also owns the Tampa Bay Buccaneers American football team, previously failed to garner sufficient support to sell shares on exchanges in Hong Kong and Singapore.

However, United, which claims to have a global fan base of about 660million and has won a record 19 league titles, is still one of the world's most valuable sports teams.

Although the listing has been planned for some time, the Glazer family originally claimed all the proceeds would go towards United's debt, angering fans.

A successful initial public offering would reportedly result in investors owning 42% of the shares available but only carrying voting rights of 1.3%.

Trading under the stock market ticker Manu, shares rose but then pulled back to stand still at the 14 US dollar mark.

Shavaz Dhalla, financial trader at Spreadex, said: "After opening positively, possibly caused by smaller retail investors looking to pick up a token share, the club's share price slowly began to retrace and drop early gains.

"Clearly, investors who are actually looking for a return as well as a shareholder voting right are steering clear."