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By Keith Weir and Michael Erman
LONDON/NEW YORK (Reuters) - Shares in Manchester United Ltd
Manchester United sold 16.7 million shares as planned, but at a price of $14 each, below the expected range of $16 to $20.
At 11:45 a.m. EDT (1545 GMT) the shares were unchanged, with turnover tapering off sharply following an initial surge. The stock never dipped below $14 and was mostly steady within a five-cent range.
One of the club's top officials said the team took less money than planned because it preferred the mix of investors involved at the lower price.
"We priced below the range because as you sort of took a step back and looked at the book, the huge number of high-quality institutional investors that were there at $14 just made us more comfortable in terms of the longer-term view here with regard to the type of investor base we wanted," said Ed Woodward, vice chairman of Manchester United, in an interview.
A mystery to most Americans but a household name in most of the world, the club listed on a U.S. exchange after pulling a planned IPO in Singapore earlier this year.
The offering valued the 19-times English champions at $2.3 billion but shaved as much as $100 million off the proceeds that had been expected for the team and its owners.
The $233 million ultimately raised in the IPO will be split equally between the 134-year-old club and its owners, the Florida-based Glazer family, owners of the Tampa Bay Buccaneers NFL team among other interests.
Two of family patriarch Malcolm Glazer's sons rang the opening bell to start trading, while two were on the trading floor -- surrounded by traders standing on Astroturf and wearing Manchester United uniforms.
The loss of as much as $50 million in expected proceeds for the club will be a blow as it copes with a debt burden and seeks to buy new players, who cost tens of millions of dollars each.
But Woodward denied forcefully that there was any shortage of cash for player transfers.
"Clearly if you look at where we are today in terms of the cash generative nature of the business and even more so contractually going forward, we have huge firepower in the transfer market," he said.
United had debt of 423 million pounds at the end of March, which the executive said was its lowest in years and also low relative to peers.
Some fans argue that the cost of the debt has forced up ticket prices for the club, which draws sellout crowds of around 76,000 at its Old Trafford Stadium and claims 659 million followers across the world.
A group of United fans who are campaigning for greater involvement in the ownership of the club jeered the Glazers.
"It would seem all the analysis of the true valuation was correct; the Glazers and their advisers were being far too ambitious - or perhaps greedy - and the true value of the shares should be around $10 rather than the $20 the Glazers were seeking," said Duncan Drasdo, chief executive of the Manchester United Supporters Trust (MUST).
MUST is calling for the Glazers to sell and allow fans to play a greater role in the club's ownership, as well as for a boycott of sponsors. United's commercial appeal was underlined last week when it signed a $559 million deal with GM
The Glazers bought United for 790 million pounds in a highly leveraged deal in 2005, taking it private after 14 years on the London Stock Exchange. Malcolm Glazer has been in ill health after a 2006 stroke, and his six children currently sit on the team's board.
"There are six siblings, and if one of them wanted to do something small then they can. But I think they are committed long term. All six want to stay involved," Woodward said.
United suffered a rare barren season last year, losing their Premier League title to rival Manchester City, whose owner, a member of Abu Dhabi's ruling family, has pumped 800 million pounds into reviving what had long been United's poor relation.
Yet Forbes still ranks 134-year-old United as the world's most valuable sports team by a wide margin, part of the attraction for the American owners in the first place.
The lukewarm offering inspired pointed jokes. As well-known financial blogger Josh Brown noted on Twitter, with a nod toward an American stereotype about soccer, "Manchester United opens ironically flat - a tie between buyers and sellers."
His jibe underlies a larger point - with so much tied to winning games, soccer clubs are an inherently risky investment.
"I didn't even look at it. I would never, ever invest in a football club," said the head of UK equities at an investment house running around 100 billion pounds in assets.
Italian champions Juventus
But as one consultant noted, the ultimate goal of a sports team is not to be a good business, but to win trophies.
"Manchester United itself has a very good business model and has been able to be profitable," said Emmanuel Hembert of management consultancy A.T. Kearney. "If there is one club to invest in it would be Manchester United, but being the best economically among your peers may not be enough."
(Additional reporting by Sinead Cruise in London; Writing by Keith Weir in London and Ben Berkowitz in Boston; Editing by Will Waterman and Phil Berlowitz)