Manchester United: Why the Glazer family’s reported ‘share sale’ is not what it seems

No United shares actually up for sale, as outlined in earnings call

Following the announcement of Manchester United’s latest financial results on Tuesday, it was widely suggested that the Glazer family were looking to sell more of their shares in the club.

Documents filed to the United States Securities and Exchange Commission appeared to show that United’s owners were offering a tranche of class A shares in the hope of raising as much as £320m ($400m).

However, as United’s chief financial officer Cliff Baty outlined during Tuesday’s earnings call, these documents were only ‘shelf registrations’ – a type of “technical filing”, he said. No United shares are actually up for sale.

What is shelf registration?

Shelf registration allows companies to register new stock offerings without immediately putting them up for sale. Companies may do this in order to generate interest in their assets while waiting for more favourable market conditions to arrive.

Baty said that United have submitted shelf registrations since 2012. By filing these documents, the company is indicating that they could – but no means will – sell these shares in the club at a later date.

As Baty stressed at the end of Tuesday’s call: “Please also note that these filings do not indicate that any shares are actually being sold.” The Glazer family last sold United shares in 2017, returning around £56m.

How are United’s shares performing?

Despite announcing record annual revenues of £627m for the 2018-19 season, United’s share price dropped to a two-year low on Tuesday. A 6.2% slip was the stock’s biggest fall in a single day for eight months, according to Bloomberg.

This was due to projections that the club’s revenues would decline this year. Failure to qualify for the Champions League means United predict their annual income to be between £560m and £580m for the 2019-20 season.

Returning to the Champions League next season is vital for United. A second consecutive year outside of Europe’s top club competition would, for example, see their lucrative £75m-a-year contract with kit suppliers Adidas reduced by 30%.

Does any of this affect Solskjaer?

Ole Gunnar Solskjaer’s side currently sit eighth in the Premier League table, having taken eight points from their first six games. Sunday’s 2-0 defeat to West Ham was United’s second of the new season.

Solskjaer is certain to come under pressure – externally, at least – if United appear as though they will miss out on a Champions League place for the second year running.

But Ed Woodward, United’s executive vice-chairman, said on Tuesday that Solskjaer would be given time to rebuild the club and that everyone at Old Trafford was focused on success on the pitch.

Woodward highlighted recent investment in the academy, recruitment department and training ground facilities. “These investments, together with the commitment we made to Ole and his coaching staff in March has given us the building blocks for success,” he said.

“While we are confident this investment will deliver results, it is important we are patient while Ole and his team build for the future. We will continue to focus on the long-term strategy and won’t be influenced by short-term distractions.”