Manchester United's listing on the New York Stock Exchange last year was anything but smooth – but one year on, success on the soccer pitch has helped the club's shares soar, analysts told CNBC.
Shares in Manchester United are up around 20 percent since the club's flotation on August 10 2012, following a shaky start which saw them fall from a flotation price of $14 to lows of around $12 in September. On Friday, shares were trading around $17.
Michael Jarman, chief market strategist at H2O Markets, said Manchester United's successful year on the pitch – during which it won the prestigious English Premier League – was a key driver of its stock price.
"They are one of the most successful teams in English soccer history. That is massively important to maintain," he told CNBC. "If you have underperformance, where do you think investors will go?"
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Richard Hunter, head of U.K. equities at Hargreaves Lansdown, agreed. "Ultimately a soccer club is driven by its success on the field," he said. "At the end of the day, it's a sports franchise and inevitably its share price will be tied to what they do in terms of soccer."
But this correlation is not always a positive thing, according to David Bick, chairman of Square1 Consulting, which specializes in sports finance. He said he found Manchester United's share price rise "unbelievable."
"I would be concerned about future earnings potential," Bick told CNBC. "If they do not have success in the European Champions League, the brand will start to wane… If they go two or three years without any soccer success the stock will decline sharply."
Hunter conceded that soccer club shares have the reputation of being a "notoriously bad" investment.
"It is much further up the risk scale to invest in soccer clubs," he said. "Only a very small percentage of clubs are going to be successful," he said.
He said that even though Manchester United are a "global brand" and do not only rely solely on soccer success to drive their company, they could ultimately have a "lean decade" which could flatten the share price.
But there might be another reasons investors are attracted to the stock, according to Jarman, who said rich investors see it as a "sexy" item to have in the portfolio.
The club's shares are popular with a small number of wealthy investors and private funds, he said, with billionaire investor George Soros taking a 7.85 percent stake in the club in August last year.
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"It is something sexy to have in the portfolio and presents little risk for them," Jarman said. "Some of these funds have billions of dollars sitting there and a few million dollars will be nothing to them."
Bick also said the club had "done well" in restructuring its debt – which stood at a crippling £423 million ($658 million) following its takeover by the Glazer family, billionaire U.S. sports investors, in 2005.
"The debt level isn't too much of a worry to investors anymore," Bick said.
In its third-quarter results in May, Manchester United said its debt had fallen by 15.9 percent from the end of June 2012, to £367 million.
Looking ahead, Jarman said one "game changer" for the stock could be online video streaming.
On Tuesday, the club charged viewers £4.80 to view a pre-season game on its website, for the first time, and Jarman said that if the club lowered the price – to £1 per game, for example - it could boost revenues by as much as £100 million.
"You get a tenth of a percent of that number in and you're already talking about making the money that we made last year in terms of winning the Premier League and the share of the [TV] rights within the Premiership itself," he said.
Emerging markets will also play a crucial role in the soccer club's future, Jarman said. Manchester United has an estimated 325 million fans in Asia, and has played pre-season matches in the region to boost their brand.
"Emerging markets are massively important and Manchester United needs to maintain a presence in Asia," Jarman said. "But what happens to that fan base when soccer in that country develops? We are years away from that happening but as an investor I would question how loyal and sustainable that fan base is."
Hargreaves Lansdown's Hunter said Manchester United had a growing fan base in both the U.S. and Asia, and said that expansion into these markets was an important part of its future strategy.
"There is something of clamour within Premiership clubs to tap into emerging markets. Clubs are looking to grab their share of fans from those areas," he told CNBC. "I wouldn't say emerging markets are a major contributor to Manchester United's income today, but they could become a serious contributor to their income in the future."
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