Equity 1, debt 0

WHEN Manchester City topped Manchester United on goal difference to win England’s Premiership title in May, it was a case of equity triumphing over debt. City, long the poorer and less successful soccer team, has soared since being bought in 2008 by Sheikh Mansour bin Zayed Al Nahyan of the United Arab Emirates, and has been buying players as if money were free (which in the sheikh’s case it nearly is). United, by contrast, has found its ability to buy the best players constrained by debts of nearly $700m, nervous bankers and pending European “fair play” rules designed to ensure teams do not prosper by taking excessive financial risks.

Even when he is on form, Wayne Rooney (pictured), now United’s only genuine superstar, cannot win trophies on his own. Hence the forthcoming initial public offering announced on July 3rd. This is not a return to the full public-company status the Red Devils enjoyed between 1991 and 2005, when the club was taken private by the Glazer family of Florida, which also owns the Tampa Bay Buccaneers, an American-football team. Nor is it the $1 billion offering that was widely expected to take place in Singapore, which seems to have been abandoned because of volatile financial markets. Instead, United will list on the New York Stock Exchange, and will aim to sell only enough shares to raise $100m.

United’s brand is still reckoned to be the most valuable in football, at around $2.2 billion, according to Forbes magazine. But that does not make the shares a wise investment. The filing documents list more than 50 risk factors, from the performance of the team to reliance on the laws of the Cayman Islands.

United will not have to release much financial information, since the Glazers are taking advantage of America’s Jumpstart Our Business Startups Act of 2012 to register it as a lightly regulated “emerging growth company”. (Is a 134-year-old club staffed by spoilt millionaires really the sort of “start-up” the law’s drafters had in mind?) New shareholders will have little say over how United is run, including whether it pays them any dividends. The shares the Glazers are offering are special ones with minimal voting rights. So the only return from this IPO is likely to be the victories the money raised brings on the pitch. This is an offering for fools and fans only.