When you think of startup companies, English soccer juggernaut Manchester United (Man U) probably isn’t the first organization that comes to mind. But the club is weighing the possibility of taking advantage of a U.S. law aimed at helping small companies gain access to capital.
Man U went public on the New York Stock Exchange on Aug. 10 and said in its IPO filing that it may take advantage of relaxed reporting and auditing requirements for so-called “emerging growth companies” enacted as part of the Jumpstart Our Business Startups Act (JOBS Act), which President Barack Obama signed into law in April. The bill provides exemptions for companies with less than $1 billion in annual revenue, a requirement Man U met during its last fiscal year.
Should Man U decide to take advantage of the relaxed requirements, the club would have to provide just two years of audited financial statements and two years of related disclosures and would be exempt from the auditor attestation requirement in its assessment of internal control over financial reporting. The club said in its filing that it would opt out of another provision of the JOBS Act that would have granted it an extension to comply with new or revised accounting standards.
Forbes ranks Man U as the world’s most valuable sports franchise at $2.23 billion, and the club’s website bills it as “the world’s most popular football team.” The club was founded in 1878 and has won a record 19 English league titles.
The VSCPA commented on the JOBS Act when it was under debate in Congress, expressing concern with exemptions included in the bill for certain companies and the effect those exemptions could have on public company financial reporting and the independent standard setting process for accounting standards.