Berko: Kick soccer investment to the curb

Stocks columnist Malcolm Berko says investing in the British football club Manchester United won't be very profitable in the end.
Modified: September 7, 2012 at 9:58 pm •  Published: September 9, 2012
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The Boston Celtics came public in 1986 and almost immediately collapsed 40 percent from its IPO price. It was finally taken private a dozen years later at less than the original IPO price. The Cleveland Indians came public in 1998 at $15 and soon fell to $9 a share. Two years later, it was purchased for a tuneless song at $320 million, far less than its IPO value. In the past decade, several Premier League soccer clubs were publicly traded at one time or another and flopped. Madison Square Garden (MSG-$39) owns the New York Knicks and the New York Rangers, and Rogers Communications (RCI-$40) owns the Toronto Blue Jays, but neither MSG nor RCI is forthcoming about profits. Teams want to keep financial information as close to their vests as possible because this data can prove too helpful to players' agents when salaries are being negotiated. Can you imagine Kobe Bryant, who makes $52 million a year, or Alex Rodriguez, who makes $35 million a year, negotiating for a higher salary in 2013?

Sell your MANU. It won't pay a dividend, and the only way you'll make a profit on this thing is if Malcolm sells the team. And in the coming six months, I'll wager a sixpence to a six-pack that MANU will continue to trade lower than your basis.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com.