Savor Manchester United's IPO

NEW YORK (TheStreet) -- Yet another interesting IPO hits the markets today, that of U.K. soccer club Manchester United (MANU), 19-time English champions during a 134-year history.

The team is owned by the Glazer family, which also owns the Tampa Bay Buccaneers. The shares priced at $14, below the expected $16 to $20 range. But even at $14, the implied value of the team is still $2.3 billion.

Today's trading should indeed be interesting; it represents one of the rare occasions when investors can buy directly into a publicly traded professional-sports franchise. The few that have gone public have not stayed that way for very long.

The Boston Celtics went public in 1986, before ultimately going private in 2002. That 16-year run as a publicly traded company was quite long compared to some of the more recent sports-franchise IPO's.

In 1998, the Cleveland Indians went public at $15 a share, and, after some initial fanfare, the stock fell to $6 per share. Doing the math at that time revealed an insanely low valuation placed on the team, and that was not a situation that lasted very long.

In 1999, the team was sold for $320 million, a record at that time, and shareholders received around $22.50 a share, a nice premium especially for those that scooped up shares for $6.

Professional hockey's Florida Panthers went public in late 1996 at $10 a share. But as the company expanded into other business ventures, the name was changed to Boca Resorts in 1999, and it sold the Panthers in 2001.

Perhaps the only thing that these three former publicly traded sports franchises now have in common is the fact that their cancelled stock certificates are highly prized collectibles.

While there have not been many opportunities for investors to have direct ownership of sports franchises, there are other opportunities to get indirect exposure. For instance, Madison Square Garden ( MSG) owns both the New York Knicks and New York Rangers.

I am not a New York sports fan and took a position primarily due to other assets owned by the company, including among other things the Madison Square Garden Complex and associated air rights.

But you certainly can't ignore the value of the Knicks and Rangers in the equation. The Knicks, which were recently listed as the No. 2 most valuable NBA franchise by Forbes, are worth an estimated $900 million. The Rangers are listed as the NHL's second most valuable franchise, worth an estimated $507 million by Forbes.

Interestingly, Madison Square Garden has a total enterprise value of $2.6 billion, but the Knicks and Rangers alone are valued at more than $1.4 billion. I wonder what the Madison Square Garden property is worth? What is the company's media business worth? In all, MSG is a fairly compelling asset play.

It will be interesting to see how the Manchester United IPO plays out, given the history of publicly traded teams in our markets.

I, for one, am holding out for a Philadelphia Phillies IPO, which will likely never happen. It would certainly be a bit cheaper this year, given the way they are playing.

At the time of publication, Heller was long MSG.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.

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