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Does Manchester United (MANU) own Old Trafford stadium?

Modified on: 2018/07/12
A:

Old Trafford Stadium was built for and is currently still owned by Manchester United Football Club (Man Utd.). This means that it is therefore owned by the club's parent company, Manchester United Plc., a company incorporated in the Cayman Islands. Manchester United Plc is listed on the New York Stock Exchange (MANU), but the only entity that holds 10% or more of any class of shares in the company is the Glazer family. In practical terms, this means that the Glazer family, as majority shareholder, owns the club and stadium and makes most of the decisions about the running of the company. Theoretically, this should mean that it is able to dispose of the stadium as it sees fit, this being one of the expected benefits of ownership.

However, legal challenges in the United Kingdom have led to an odd situation where, despite its ownership, Manchester United Plc. cannot sell the stadium on the open market if the club were to move to another location or for any other purpose such as a lease arrangement. The Manchester United Supporters Trust received a ruling in 2013 to declare the stadium an asset of community value. This means that, should the Glazer family decide to sell the property, the Trust must be allowed to bid first.

This legal ruling prevents the owners from instituting a sell and leaseback arrangement for the stadium, which had previously been considered. It means that development work to the current stadium is more attractive, despite major physical limitations, than aiming for a purpose-built venue elsewhere. It also means that the owners have to look to sponsorship deals and revenue-generating activity to continue growth rather than relying on saving costs or accounting techniques involving the physical assets.

Fortunately for investors in the stock market, Old Trafford remains the center of the soccer team's huge sporting and tourism industry, as fans flock from all over the world to visit Manchester United's stadium every day of the week. The revenue-generating potential of this influx has not been lost on the company, and the stadium has become almost an entity in its own right, separate from the team, offering tours, museums and corporate hospitality as well as promoting itself as a venue for major life events such as weddings.

Additionally, Man Utd.'s continued presence in the upper echelons of the Barclay's Premier League and the UEFA Champions League means that the parent company can continue to demand high ticket prices, particularly for season tickets. These are nevertheless in such high demand that there is a waiting list, and while local fans of the team object strenuously to the rationing of seats by economic means, this does give members of the team's global fan base a chance to attend key home matches if they can afford the premiums. Given the difficulties that Manchester United Plc. faces in expanding the stadium or moving the football club elsewhere, capitalizing on the scarce resource that is seating at Old Trafford seems to be a solid way forward for continued growth.


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