Man United's Europa Win Sends Ajax Stock Down Most in a Year
(Bloomberg) -- Shares in Manchester United Plc rose Wednesday as the club's Europa League final victory against AFC Ajax in Stockholm guaranteed a place in Europe's elite Champions League next season. The Dutch club dropped the most in a year in early Amsterdam trading Thursday.
Television revenue from qualification alone is expected to be around $40 million to $50 million, and teams in the league will also enjoy increased leverage with sponsors, analysts had said ahead of the fixture.
Champions League qualification should boost investors' short-term confidence in Manchester United, with the team's relatively poor performance and rising wage costs having weighed on the stock so far this year, Gabelli's John Tinker said by phone.
United's shares closed up 2.7 percent in New York Wednesday, as the club led 2-0 with around 35 minutes still to play. Ajax's shares fell as much as seven percent as European markets opened the next morning. The stock had jumped six percent following the club's win over France's Olympique Lyonnais in the Europa League semi-final on May 11.
Financial Gulf
“The financial gulf between Manchester United and England's other teams is narrowing,” Robert Wilson, a lecturer in sports business management at Sheffield Hallam University, said in a phone interview prior to the game.
“If United were to win the Europa League and go on a good run in the Premier League next season, they would be in a position to comfortably double their shirt deal to $150 million a year,” Wilson said.
Manchester United signed a $750 million 10-year shirt sponsorship agreement with Adidas in 2014. However, the contract includes a clause that if the team does not qualify for the Champions League for two consecutive seasons, annual sponsorship payments will decrease by 30 percent, Chief Financial Officer Cliff Baty said in November. Wednesday's match was United's last chance to avoid triggering that clause as the team failed to qualify from domestic competition, finishing sixth in the English Premier League.
Bookmaker William Hill had said Manchester United was favorite to win the game, giving a 50 percent implied probability, with Ajax at 24 percent.
A minute's silence was observed prior to the game and the opening ceremony was considerably reduced, following the terrorist attack in Manchester on Monday.
To contact the reporter on this story: Joe Easton in London at jeaston7@bloomberg.net.
To contact the editors responsible for this story: Adveith Nair at anair29@bloomberg.net, Simon Lee, Colin Keatinge
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