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MOST PEOPLE THINK that Manchester United, which went public with a share offering yesterday, is headquartered at Old Trafford.

Think again.

United’s F-1 filing with the SEC describes its real corporate structure. United is now officially based in the Cayman Islands, and the football club itself is a shell corporation.

Technically, their new address is – deep breath now – c/o Walkers Corporate Services, Walker House, 87 Mary Street, George Town, Grand Cayman, KY 1-9001, Cayman Islands.

The company based there is called Red Football, which owns Manchester United plc (Cayman), which owns Red Football Holdings Limited (UK), which owns Red Football Shareholder Limited (UK), which owns Red Football Joint Venture Limited (UK), which owns Red Football Junior Limited (UK) and Manchester United Limited (UK), and “various operating subsidiaries.”

Obviously, this was done for tax avoidance purposes. United said it expects its Cayman registration to make it subject to U.S. taxes, (see page 38):

“… because we chose to be organized as a Cayman Islands corporation for reasons principally related to the corporate governance benefits this provides to our principal shareholder as described throughout this prospectus, we believe we will not be able to avoid treatment as a US domestic corporation for all purposes of the US Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company will be subject to US federal income tax on its worldwide income.”

GMI Ratings, the corporate governance group, called the club out on it:

Finally, as if other warning signs were needed, the club is to incorporate itself in the Cayman Islands’ tax haven. All of this is worrisome. Potential investors should be very careful to be aware of the risks inherent in this situation.

Here’s United’s diagram of its new corporate structure. 4-4-2, it ain’t:

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