Baron Takes Stake in Manchester United Before Nike Deal

It was announced today that Baron Capital Management has purchased nearly 25% of the available shares in Manchester United PLC (NYSE:MANU) from the Glazer family.

Baron Takes Stake in Manchester United Before Nike Deal

Baron, a New York-based fund with nearly $16 billion under management, invested in one of sports most popular and enduring brands.

On its website, Baron said: “Manchester United plc is an English Premier League professional sports team that generates revenue from broadcasting, sponsorship, and licensing. Shares of Manchester United dropped in Q4 due to a delay in the signing of a new global merchandise deal with Nike Inc (NYSE:NKE) and the team’s poor performance on the field. The Nike deal is still expected to be signed, but has been pushed out from this fiscal year. We remain positive on the company’s prospects going forward.”

New Nike deal could represent 40% of stock’s market cap

Manchester United PLC (NYSE:MANU), a 20-time English soccer league champion, is known as one of the lucrative sports franchises, the soccer team nonetheless struggled this year. The acquisition by Baron comes as the stock had been trading near its yearly low levels. Ron Baron, founder of Baron Capital, is known for investing in stocks on a drawdown. The investment comes as speculation build that Manchester United is about to sign a rich apparel deal with Nike Inc.

The Nike deal is said to be a 10-year, $1 billion deal to provide the soccer club uniforms, shoes and equipment.  The deal would represent nearly 40% of Manchester United PLC (NYSE:MANU)’s value, according to a report

Manchester United: Baron and Soros fans, Odey and Tremblant short sellers

While Baron is a fan of Manchester United PLC (NYSE:MANU) along with George Soros, also a stock holder, notable shorts in the stock include Odey Asset Management, the London-based fund with nearly $6 billion under management run by Crispin OdeyAnother hedge fund short seller is Tremblant Capital Group, the New York-based hedge fund with nearly $3 billion under management run by Brett Barakett.

Manchester United PLC (NYSE:MANU) shares jumped 6.2% yesterday, and were little changed at $15.82 in early trading in New York today.



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com