Man Utd. also sold striker Cristiano Ronaldo to Real Madrid for Â£80 million, and BusinessWeek reports that Aon paid a Â£35.9 million advance on its contract. But the club reported 2009 net income of just Â£25.6 million on revenues of Â£278.5 million. Those revenues inched up from last year's Â£256.2 million take.
With growth of just under 9 percent and margins of around 10 percent during a recession, you'd think that makes Man Utd a solid financial proposition. The Aon deal was about 40 percent more than AIG paid for the same rights.
But Wall Street is unimpressed. Still saddled by Â£608 million in debt from Malcolm Glazer's 2005 buyout of the club, Man Utd is looking to raise Â£500 million in a sale of junk bonds. Here's the reaction from investors:
Tatjana Greil Castro, Evolution Securities: "Most traditional high-yield investors won't touch this ... It's unrated, so some investors can't take it, and there's a very busy new-issue calendar so there are plenty of alternatives. Most people just won't focus on something with far too much leverage, limited free cash flow and lumpy earnings.More numbers here and here.
Jean-Luc Petit, BT Investment Management: "This looks like a fairly risky type of investment considering the amount of leverage the American owners have ... I don't think mainstream bond fund managers would be that interested in investing in Manchester United."
BNET's Global Football Sponsorship Deal League:
- Bayern Munich: Â£25.5 million a year (through 2013) with Deutsche Telekom/T-Home
- Liverpool: Â£20 million a year (Â£81 million over four years) with Standard Chartered
- Manchester United: Â£20 million a year (Â£80 million over four years) with Aon
- Real Madrid: Â£18.3 million a year (Â£55 million over three years) with Bwin.com
- Juventus: Â£15 million a year (Â£75 million over five years) with Tamoil
- Chelsea: Â£12.5 million a year (Â£37.5 million over three years) with Samsung
- Manchester City: Â£8m a year (Â£24 million over three years) with Etihad Airways.
- Arsenal: Â£6.7 million a year (Â£100 million over 15 years) with Emirates
- Bayern Munich Signs Deutsche Telekom to Largest Ever Football Sponsorship Deal
- Liverpool F.C. Confirms It Wants Â£250M for New Stadium Sponsorship; Debts Leave It No Choice
- Chelsea F.C.'s Need for Stadium Sponsor Proves It Fumbled Samsung Deal
- Real Madrid's New Deal With Bwin Suggests Chelsea's Samsung Pact Is Underpriced
- Liverpool's Standard Chartered Deal May Be Bigger Than Man. Utd's Pact With Aon
- Manchester United Sign Aon to Replace AIG as Shirt Sponsor; Club Returns to Profitability