Man United Tops Sluggish April Sports Stocks While Fading on Field

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On the pitch, Manchester United had a tough April, taking just four out of a possible 15 points in the Premier League and needing a penalty shootout to overcome Coventry City in the FA Cup semifinal. In the stock market, though, shares of the Red Devils were winners, as United shares on the New York Stock Exchange gained 16% in April, far outpacing sports peers in the Sportico Sports Stock Index.

The market move in April was a bounce-back for the world-renowned soccer team, after shares fell to a 17-month low in March as hedge funds unwound their activity related to taking advantage of Jim Ratcliffe paying the highest price ever for Man United shares. United shares, traded under the ticker MANU, had their highest short interest ever in their 22-year history around the Ratcliffe tender, meaning a number of funds were betting United shares would drop in price. Short positions are closed by buying shares, and market data from financial data site Koyfin shows short interest has fallen about 75% in the past month.

Ratcliffe, who took over operations of the club’s football operations with the purchase of a quarter of its equity, appears, at least initially, to be a hands-on manager, with one of his first moves being the suspension of some corporate credit cards in an early move to control spending, according to a report from ESPN. In March the club reported record revenue, although the results were mixed, as the strength came from European competition from which the team was bounced early. The squad is also currently sixth in the Premier League table, which would mean it misses out on UEFA Champions League competition next season.

Manchester United was one of just seven out of 40 stocks in the index to post gains in April, as the benchmark Sportico index declined 6% to finish the month at 1,095, a six-month low. The drop was largely in concert with a step back in the broad market, with the major U.S. stock indexes dropping about 4% in the month. “Like clockwork, the arrival of spring has awoken the bears from a deep winter slumber,” said LPL Financial chief technical analyst Adam Turnquist. “The silencing [of the] 10% first-quarter S&P 500 rally was interrupted by alarm over escalating geopolitical conflicts in the Middle East, reduced rate cut expectations and surging interest rates.”

In other words, very little sports-specific news pushed the index down, but nonetheless the drop saw a number of components fall sharply, with 13 companies losing 10% or more of their value in April, according to Sportico data. The worst performer was Sphere Entertainment (SPHR), which had been the best performer in March. Sphere shed 21% in April, partly because Wall Street felt the stock price had risen too fast, with Seaport Research issuing an opinion to start the month that Sphere shares simply needed “to take a breather.”

Live Nation (LYV) lost 16%, including a large one-day drop after The Wall Street Journal reported the Justice Department is preparing an antitrust suit against the company over the pricing behavior of Ticketmaster. Live Nation’s Ticketmaster Sport division, which helps maximize ticketing revenue, has relationships with MLB, NHL, MLS and a number of English Premier League clubs, according to its website.

Other significant declines in the month were seen by betting and analytics data firm Sportradar (SRAD, down 20%), Caesars Entertainment (CZR, down 18%) and ski mountain owner Vail Resorts, (MTN, down 15%).

The handful of other gainers in the month included TKO Group (TKO, up 10%), which benefited from the settlement of a UFC antitrust lawsuit for $335 million. The company had been potentially exposed to a $4.8 billion in damages if it lost the suit, sparking a relief rally from investors that added more than $1 billion to TKO’s market cap in one day. TKO’s controlling shareholder, Endeavor Group (EDR, up 3%) also gained in the month, closing at $26.41 a share after an early April announcement that it will go private at $27.50 a share. The difference in the market price and going private price is likely reflecting the potential bank interest lost in holding Endeavor shares until the deal is consummated.

Formula One (FWONA, up 6%) Kentucky Derby operator Churchill Downs (CHDN, up 4%),  Knicks and Rangers owner Madison Square Garden Sports (MSGS, up 1%), MSG Entertainment (MSGE, up 1%) and Fox Corp. (FOX, up slightly) rounded out the stocks that rose in April.

The Sportico Sports Stock Index is a basket of 40 stocks that rely on sports for a significant portion of their growth. The index includes sports team owners such as Blue Jays owner Rogers Communications (RCI, down 9%), broadcasters such as Walt Disney Co. (DIS, down 9%), sports betting operators including Flutter Entertainment (FLUT, down 6%) and specialized businesses like scoreboard maker Daktronics, (DAKT, down 5%). The index is equal weighted, meaning each component starts with the same value in the index, 2.5%, and is reset to that mark quarterly, with stocks dropped and added periodically as needed. The Sportico Sports Stock Index was launched at 1,000 in August 2020 and peaked at 1,763 in November 2021.