Man Utd the winning ticket: Train

Added 13th September 2017

Manchester United has been added to Nick Train's Finsbury Growth & Income Trust, his first new holding in two years.

Man Utd the winning ticket: Train

In a move that seems like it came out of left field, Man Utd has become the latest addition to Train’s FGT, after the well-known manager was able to access a block of quoted shares from the Glazer family.

Train scored the Premier League team for below $17 (£13, €14) per share, a bargain from its record high of $19.4 per share in 2014.

Stuck in a rut

In an update to shareholders, he noted that Man Utd’s “shares have been stuck in a bit of a rut”, despite the fact that its financial position has meaningfully improved.

Since the years of its “moribund share price” pre-tax earnings have effectively doubled, the mega Premier League team has slashed its net debt to circa £366m and halved its interest costs due to successful refinancings.

The other obvious kicker is that the firm has begun to pay a dividend.

Technology toehold

Another reason Train was so “relieved” to secure this investment is because of the toehold it gives him in the technological arms race between content providers like Amazon and Netflix and traditional broadcasters.

Both Amazon and Netflix have sunk billions of dollars annually into the procurement of new entertainment content. Train doesn't think it will be long before they realise the entertainment value professional sports teams provide. 

He said: “It will not be long now before an internet giant bids against an incumbent football rights holder. The ramifications for traditional media companies will be massive, but through the turmoil we expect the value of strongly-franchised football clubs to rise.

“In this context and the context of the $100s of billions of market capitalisation in global internet and telecommunication companies, we regard the current market cap of ManU, that c$2.7bn, as low. Certainly low relative to the global following and fascination with the ManU franchise and to the priceless (virtually) strategic value to broadcasters of live sports.”

Engrossing series

And Train believes professional sports teams are destined to become highly prized entertainment commodities because they are, as The Billionaires Club writer James Montague puts it, a “never-ending series every bit as engrossing as The Wire or The Sopranos that plays out season after season”.   

Earlier this month, the Houston Rockets, an NBA team, was sold for $2.2bn, the highest price paid for a basketball franchise.

But with its global cachet, Train thinks Man Utd could fetch an even higher price.

“If ManU is as valuable as the Houston Rockets – and we think in truth its global reach makes it far more valuable – then it would command a value of well over $5bn; more than double the current market capitalisation. This is the scale of the opportunity we see.”

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Kristen McGachey

Senior Reporter

Kristen joined Last Word Media and the world of financial journalism in April 2016, leaving behind a career in a legal publishing firm as a senior researcher turned assistant editor.

This native Angelino initially moved to the UK in 2008 to complete her undergraduate studies at the University of Nottingham. She subsequently obtained a Masters degree in Philosophy with Literature from the University of Warwick.

Features

Why you should care about the German elections

Why you should care about the German elections...

You may be forgiven for not staying up late this Sunday to watch the final results of Germany’s parliamentary elections come in. While chancellor Merkel is sure to win, the scale of her victory is likely...

Analysis

Profiles

Directories

Canada Life International Limited
Canada Life International...

Canada Life International Canada Life House,...

Tweets

Events

IA Best Practice Adviser Awards Europe 2017
IA Best Practice Adviser Awards Europe 2017

Thursday 28 September
The Waldorf Hilton, London

IA Future Advisory Forum Europe 2017
IA Future Advisory Forum Europe 2017

Thursday 28 September
The Waldorf Hilton, London

IA Future Advisory Forum Cape Town 2017
IA Future Advisory Forum Cape Town 2017

Thursday 5 October
The Vineyard Hotel, Cape Town

IA Best Practice Adviser Awards South Africa 2017
IA Best Practice Adviser Awards South Africa 2017

Thursday 5 October
The Vineyard Hotel, Cape Town

Sponsored Content

Investment Strategy

OTHER STORIES FROM LAST WORD...