Tuesday 14 January 2014

Manchester United's share price drops by £250million in 4 weeks!

Manchester United's tumultuous season has taken another nosedive with news the club's value has plummeted by a quarter of a billions pounds in the last four weeks.

As string of woeful results - including three defeats in a week for the first time since 1992 - have taken their toll on the business as David Moyes struggles to maintain United title's defence.

The Glazer family took control at Old Trafford in 2005 and have saddled the club with huge amounts of debt to finance the purchase. In the last five years they have paid £400million in interest alone.

And the recent string of poor results means the share price has dropped by £250m to £1.5billion.

United could withstand the one-off loss of the £29m they received from UEFA for last season's campaign in the Champions League, but a prolonged absence would have serious knock-on effects.

Not least of the problems would be the threat to deals such as its retail partnership with sportswear group Nike, which pays United a minimum of £25m a year for the sale of two million replica shirts around the globe.

Those sales helped to earn United an additional £12.8m from the agreement last year.

And though Nike is expected to renew its deal in the next few months, the team's recent decline could weaken the club's bargaining position.

With financial forecasts for 2013-14 based on a third-place finish in the Premier League, the club's New York-listed shares have slid to a little more than £9 from more than £10.95 in May.

Under Ferguson, United grew into a global brand that claims more than 650m followers. Turnover this season is forecast to reach between £420m and £430m, well ahead of their Premier League rivals.

Injuries to strikers Wayne Rooney and Robin van Persie have not helped United's cause, but the ageing squad looks in desperate need of an expensive overhaul.

The team's struggles have also reignited resentment among a vocal group of fans who have never forgiven the Glazers for loading the club with debt to finance their £790m takeover in 2005.

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