Key takeaways
- Qatari banker Sheikh Jassim has reportedly made a successful $6.3 billion bid for Manchester United
- Manchester United shares spiked up to 15% in a day and have climbed 24% in three trading days
- The move comes after Messi’s megadeal signing to U.S, club Inter Miami, complete with Adidas and Apple tie-ins
It was good news for Manchester United investors this week as the stock soared 15% in a day after rumors swirled around Qatari investors’ successful bid to acquire the soccer club. While everyone involved is hush-hush on if it’s actually a done deal, it was enough to encourage traders after the club’s recent valuation woes.
The news comes after another big soccer move was announced: player Lionel Messi is officially moving to the U.S. soccer league, combined with a sweet Apple deal that leaves the legendary player cashing in, and the Apple TV streaming service with another jewel in its crown. Let’s get into the details.
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What’s the talk about Manchester United?
News emerged in a Qatari newspaper, Al-Watan, that banker Sheikh Jassim Bin Hamad Al Thani has allegedly won a bid for complete ownership of soccer club Manchester United. While Al-Watan’s piece didn’t cite a source, it did mention a deal would be announced soon. (It’s worth noting that Sheikh Jassim’s father owns the newspaper.)
Manchester United is currently owned by the Glazer family in the US, who first announced in November last year that they were putting the club up for sale. Since then, Manchester United’s share price has soared over 76%.
The Glazers were reportedly looking for $6 billion to seal the deal. Sheikh Jassim has made several offers before, but his fifth one was for $6.3 billion for 100% ownership. Other interested parties were in the bidding, including British billionaire and INEOS chief executive Sir Jim Ratcliffe, with investment company Raine Group managing the process.
Ratcliffe’s deal is said to look different: he’s apparently looking for 60% ownership of the club, with two of the Glazer family members, brothers Joel and Avram Glazer, becoming minority shareholders and staying on at the club until 2026.
A deal would end months of uncertainty for the soccer club, though Sheikh Jassim’s spokesperson said any talk of his successful bid was “pure speculation”.
The market reaction
It was enough to whip the fans and investors into a frenzy. Social media popped off and British media outlets soon jumped on the news, with traders taking note. Manchester United’s share price at one point soared 15% in a day, the biggest daily jump the stock has seen since February, with the share price climbing nearly 24% in three days.
Tuesday’s rally added $340 million to Manchester United’s market capitalization, with its value reaching $3.28 billion when trading closed. Shares are currently priced at $22.76 a piece, its highest level since mid-April.
In recent months, there have been questions over the club’s valuation, which sometimes have driven down the share price this year. In February, the Financial Times suggested Manchester United is only worth $1.6 billion, less than half of what the share price implies. At the time, the share price fell 9.2% at the news.
Something else that could affect the stock price in the coming weeks is Manchester United’s earnings report, which is due this week. At its last earnings report in March, the club made a quarterly net profit of £6.3 million and reiterated its previous revenue guidance of £590 million to £610 million.
What else is happening in the soccer world?
Manchester United’s takeover isn’t the only major deal happening in soccer – player Lionel Messi, who is currently signed with Paris St Germain, will be moving to Inter Miami in July after reportedly rejecting offers from old club Barcelona and an eye-watering $400 million deal with Saudi Arabia.
While the full details of the contract aren’t known, Messi is set to become the highest-paid soccer player in Major League Soccer (MLS). There are rumors swirling about that the contract is for four years and Messi could be paid as much as $54 million per season.
Sporting clothing company Adidas, which is a corporate sponsor of MLS and of Messi himself since 2006, is allegedly in talks with the soccer superstar to have a profit-sharing agreement.
An interesting side note: Inter Miami is partially owned by legendary player David Beckham, who made a similar shock move to the U.S. when he signed with LA Galaxy 16 years ago. It’s possible Messi could have a similar contractual arrangement where he has a purchase option for part of an MLS team as Beckham did.
Sport’s role in the streaming wars
Apple, another key company involved in the Messi deal, signed a $2.5 billion decade-long partnership with the MLS earlier this year, which Messi now stands to take a cut of. Apple has already produced a docu series for Apple TV later this year on Messi’s five World Cup appearances.
Apple TV now has 6% of the U.S. streaming market share, while Amazon Prime Video recently beat Netflix for the first time to the top spot with 21% of the market share compared to Netflix’s 20%.
The world of sports and streaming services are increasingly colliding. Variety Intelligence Platform predicted the annual value of TV and streaming rights to sports in the U.S. would reach $26.6 billion this year, up a massive 75% from 2015.
Aside from the streaming rights to live matches and games, there’s a considerable amount of content to be gleaned from sports: see Netflix’s Formula 1: Drive to Survive series as a successful example which has boosted viewership of the car racing world championship. Apple has clearly taken notes with its pending Messi docuseries.
Apple’s share price reached an all-time high on Monday, peaking at $183.79, as the Big Tech behemoth is once again within touching distance of a historic $3 trillion valuation.
The bottom line
There have been a lot of moves in the international soccer world of late. While the deal isn’t confirmed yet, the potential for Manchester United’s stock price to grow if it does have a new owner could be substantial.
As for Messi’s latest move and the various corporate tie-ins, it’s a reminder that the streaming wars are still alive as companies like Apple, Netflix and Disney pay a premium for sports streaming rights. It wouldn’t be surprising to see the likes of Manchester United and other top soccer clubs getting in on the action.
Despite the slumped subscriber numbers, stocks like Netflix have somewhat recovered this year as part of the tech market rally. In the volatile market, AI investing is your new best friend – you can use it to help you build wealth with Q.ai’s Emerging Tech Kit.
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