Manchester United's U.S. IPO may be a tough sell

By Olivia Oran

(Reuters) - Manchester United may be one of the most supported sports teams in the world but that doesn't mean the soccer club is going to find many investors with an appetite for its planned initial public offering in the United States.

Fund managers who have looked at its preliminary prospectus have been either negative or lukewarm on the prospect of buying shares in the club, which is controlled by the Florida-based Glazer family.

They say Manchester United faces significant financial risks given its 423 million pounds of debt ($658 million), and the very structure of the business puts its customers, the fans, at odds with shareholders.

Some are concerned that the U.S. stock market hasn't had many sports team listings, let alone any European soccer clubs, so there isn't much to compare Manchester United against

"With a sports franchise, it's a constant tug of war between player salaries cost and the rest of the operation," said Wallace Weitz, president and portfolio manager at Weitz Funds in Omaha, Nebraska, which holds stakes in Liberty Media Corp, Walt Disney Corp and Comcast Corp.

Manchester United declined to comment and representatives for the Glazers could not be immediately reached.

Like many sports franchises, the team's success on the pitch is largely contingent on its ability to spend cash on players - through both transfer fees and high wages.

While there have been some signs in the past year that transfer spending by top English clubs is being reined in, the pressure on a leading club like Manchester United to spend heavily in an attempt to stay a top team remains. That spending can eat up profits rapidly and lead to volatile financial results.