In July 2012, the directors of Dravya, a private equity firm of a leading private commercial bank in India were excited,

when they came to know that Manchester United has filed Form F-1 and preliminary prospectus with the United States Securities and Exchange Commission for an Initial Public Offering of $300 million. Manchester United is an English football club based out of Old Trafford, Manchester. The club went public for the first time in 1990, and was delisted from London Stock Exchange in the year 2005 when Malcolm Glazer, the present owner has acquired 75% of the clubs shares. Dravya has stake in one of the teams of highly successful Indian Premier League, a professional Twenty20 Cricket championship in India. Now, the top management wants to go global and is searching for the opportunities to invest in a profitable sports club with international recognition. With a 659 million fan base (as conducted by Kantar media), a cumulative audience reach of over 4 billion views during the 2010-11 season and an optimistic scenario in sports economics in general and football economics in particular, Manchester Uniteds public issue seemed like a golden opportunity. The Board of Directors of Dravya has assigned the task to Mr. Varun, Vice President Investment Management to evaluate the opportunity of investing in Manchester United shares. Mr. Varun has a rich experience of 25 years in fields like Corporate Finance, Mergers & Acquisitions, Venture Capital and Investment Banking. He has called for meeting with his team comprised of Research Analysts to discuss the task ahead. The challenge in front of the team is the valuation of Manchester United. The club has got a unique business model of generating revenue from Sponsorship, Retail, Merchandising, Apparel & Product Licensing, Mobile telecom partnerships, Broadcasting and Matchday revenue. Though there are handfuls of football clubs listed on bourses across the world, they are cannot be compared with Manchester United neither in size nor in revenues. The growth prospects of club football industry are high and the competition is intense. Disclosures from Manchester United in the preliminary prospectus reveal that, the related party transactions are not in line with the Corporate Governance guidelines. In the context of all the aforesaid points, Mr. Varun has a tough job of selecting the right method of valuation for Manchester United and to suggest the BOD whether to invest in it or not.