The Covid-19 pandemic disrupted a lot of sectors worldwide, including sporting events across the world, although in varying degrees.
In case you’re wondering, countries like Belarus and Turkmenistan are some of the countries that still have uninterrupted matches. On the other hand, most countries are looking to relax the restrictive measures and create an environment that allows businesses to work in a relatively normal way.
This also applies to football clubs, so as the situation gets better, is it wise to invest in stocks in football clubs? Or, more specifically, is it a good decision to buy shares in Manchester United?
In this article, we provide an overview of the factors you need to take into consideration before you make your decision.
Manchester United – A Valuable Global Brand
The professional football club has an enviable reputation as a global brand and one of the richest football clubs in the world. Furthermore, it had a brand value of $1.65 billion in 2019.
In fact, it is always ranked by Forbes among the top five most valuable football brands. It’s also worth mentioning that it had a strength rating of AAA by Brand Finance.
However, the pandemic also had a negative effect on the club, as it did on the entire sports sector. The third-quarter revenue of the club dropped significantly by 18.6% in comparison to the same quarter last year. Also, they had a financial loss of $34.8 million (without taxes) from January to March.
The main reason behind these numbers was the COVID-19 pandemic, as it had a negative effect on revenues from broadcasting and matchday revenues. However, they are set to close a world-record sponsorship deal of $90 million with the Chinese company Haier.
Manchester United Financial Gains
After the pandemic hit in March, the Manchester United stock was trading at $15.42. It recently has increased, and it’s trading at $17.2. According to its quarterly earnings results on May 21st, they have reached $4.42 earnings per share, with total revenue of $123.71 million. The club is set to announce its next quarterly earnings on September, 22nd 2020.
Another information that you should take into consideration is sponsorship deals and if they’re negotiating new deals, as that will have an impact on the price of shares. Moreover, according to financial analysts, the price target for the next year will be $19. If you’re wondering how to buy shares in a company like Manchester United, all you need to do is open an investment account at an online broker.
Summary
In conclusion, there’s still hope that the world will get back to normal with a new vaccine or measures that at least for now allow scheduled sporting events to take place. On the other hand, it should be noted that the situation is very uncertain with the COVID-19 global pandemic and it changes day by day. But, otherwise, Manchester United is still undoubtedly a leading global brand with a large fanbase, diverse revenue streams, and a well-established financial base.
