Manchester United (MANU) Stock Falls as European Super League Collapses Amid Huge Fans Backlash
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Shares of Manchester United (NYSE: MANU) closed over 6% lower yesterday after the English soccer powerhouse faced a huge backlash from its fans, as well as the UK and European authorities, on flans to join a breakaway European Super League (ESL).
Over the weekend, 12 of the ost wealthiest soccer clubs in Europe signed up to form a new European competition that will see these clubs act as founding members, and therefore share most of the revenues. JP Morgan (JPM) agreed to provide debt financing worth $4.8 billion.
However, the entire soccer ecosystem united and facilitated a huge backlash against these plans, accusing clubs and their owners of greed. The new system has been lined up to replace the historic Champions League competition.
The UK Government threatened to throw a “legislative bomb” on the proposal while the British Royal family also raised their concerns over the proposal. All of the English “Big Six” clubs signed up for the project. Three clubs - Manchester United, Arsenal, and Liverpool - have American owners, who are believed to be pushing for these changes to replicate the NFL/NBA model.
However, all six clubs said they are backing down from entering the ESL following widespread criticism and even threats of government intervention.
“The response from supporters in recent days has given us time for further reflection and deep thought,” the letter reads. “It was never our intention to cause such distress, however when the invitation to join the Super League came, while knowing there were no guarantees, we did not want to be left behind to ensure we protected Arsenal and its future.”
“As a result of listening to you and the wider football community over recent days we are withdrawing from the proposed Super League. We made a mistake, and we apologize for it.”
Minutes before Manchester United released the statement to formally withdrew its application, the club announced its Executive Vice Chairman Ed Woodward, considered to be one of the most powerful soccer people on the old continent, said he will leave the club at the end of the year.
Six remaining clubs - 3 from each Italy and Spain - are still for the competition, officially.
“Despite the announced departure of the English clubs, forced to take such decisions due to the pressure put on them, we are convinced our proposal is fully aligned with European law and regulations,” the ESL said on Tuesday.
They remain “convinced that the current status quo of European football needs to change.”
Shares of Manchester United are down over 1% in pre-open to completely erase gains made after the club announced it will join the ESL. Shares of the biggest Italian soccer club Juventus are down over 12% in today’s trading session in Milano.
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