Juventus’ On Field Performance has “Significant Financial Implications” for Shareholders


Cristiano Ronaldo’s hat-trick (last Tues. night) gave Juventus Football Club S.p.A. a 3-0 victory over Atlético Madrid (in the 2nd leg of their round of 16 matchup) and pushed the club through to the UEFA Champions League quarterfinal round on aggregate (3-2). CR7’s performance also had “significant financial implications” for the publicly traded Italian football club. Participation in the next round guarantees “The Old Lady” another $18 million in UEFA prize money and ticket sales (team sold a record $6.2 million worth in last round), and should Juventus go on to win the tournament for the 1st time since ’96, the team would stand to take in at least $57 million more ($39 million from UEFA, +/- $18 million in gate receipts & hospitality). JUVE shares climbed by as much as +30% on Wednesday (3.13.19), before closing the day +18%; they’re up +23% ($1.70) since Tuesday morning’s open.

Howie Long-Short: There is a volatility to the share prices of publicly traded European football teams that you won’t find in U.S. sports. Troy Brazell, CEO of Optima Sports Group, explained “while U.S. investors are looking for long-term capital gains, the shareholders of these thinly traded penny stocks are emotional fans looking to capture the excitement associated with being a part of a winner.” 

Publicly traded European football teams are also owned by fewer individuals than a common stock like MSG (Knicks/Rangers) or RCI (Maple Leafs/Raptors), so their shares are going to be more susceptive to the whims of the irrational emotional investor. JUVE’s strong rally has been super-charged by the low expectations investors had heading into the 2nd leg last week, but historically speaking the biggest fluctuations in the market come after a bad loss; investors simply become more risk adverse after losing.

Juventus’ value has increased by more than $225 million since the Borsa Italiana opened on Wednesday, +/- 150% more than Juventus would claim in prize money if it were to win the tournament, but that doesn’t mean the share price is now overvalued. Troy says that winning the Champions League would boost sponsorship revenues and positively “impact everything from ticket sales to merchandising and television revenues moving forward.”

Winning on the field isn’t the only way for a publicly traded European football team to move the share price. “The introduction of a new stadium, signing of a star player or the announcement of a high-profile match against a team that would not normally appear on the schedule can all excite the masses; and remember, these are global fan bases.” JUVE shares are +140% since the team acquired Ronaldo.

Round of 16 results also impacted the share prices of the other publicly traded teams participating in the Champions League. AFC Ajax (AJAX) and Manchester United (MANU) shares climbed +8% and +2% respectively, as both teams advanced to the quarterfinal round. Borussia Dortmund (BVB) shareholders weren’t as lucky. The stock price has fallen -10% since the club was bounced by Tottenham Hotspur.

Fan Marino: Some Champions League team executives are said to be meeting with UEFA officials tomorrow to discuss “radical changes” to the league format – including the introduction of a promotion/relegation system (4 teams/year) that would benefit the “biggest and richest clubs and make it harder for smaller teams to qualify.” As it currently stands, participation is based on where clubs finish within their respective domestic leagues during the prior season; a format that has resulted in Arsenal, Manchester United and AC Milan all failing to qualify in recent seasons. The league is also said to be considering moving games from mid-week to weekends, a move that would encroach on the territory of the national leagues. Needless to say, Richard Scudamore (EPL) and Javier Tebas (La Liga) are not supportive of the ideas. No changes are expected to be implemented before the 2024 season – last month the ECA and UEFA agreed to extend the league’s Memorandum of Understanding for 5 years.

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Service Time Manipulation to Cost Top Prospect Millions


Vladimir Guerrero, Jr. is the #1 prospect in baseball, but the Toronto Blue Jays recently announced they were calling up another top prospect from the club’s farm system (Danny Jansen) to replace the injured Yangervis Solarte, in a case of “service time manipulation.” Though the team loses financially in the short-term (think: increased ticket sales, merchandise sales), by leaving Guerrero, Jr. in Triple-A through the first 3 weeks of the ’19 season the club picks up an additional year of the player’s services prior to free agency; Guerrero will be 26 in ’25 and theoretically in the prime of his career. It’s worth mentioning that Jansen won’t be the only rookie on the Blue Jay’s September 40-man roster; Sean Reid-Foley made his MLB debut for the club on Sunday August 12th.

Howie Long-Short: No one debates that it’s in Jays’ best interest to leave Guerrero toiling in the minors through early next season. The team isn’t making the playoffs and it makes little sense to trade a full year of a star in his mid-20s for a couple of weeks of one at the age of 19; it’s also been theorized that club could save upwards of $30 million by pushing his free agency back a year.

What I don’t understand is why Jays’ fans would support ownership’s decision. There’s a quid-pro-quo between sports fans and their favorite teams. The franchise makes its best effort to win, in exchange the fan pleads his/her loyalty. Fans can’t expect teams to always put a winning product on the field, but they should be able to expect their favorite team puts its best product out there. The Jays intentionally keeping Guerrero down, to save Rogers Communications (RCI) money 7 years down the line, violates that agreement.

I’m also baffled as to why working class fans would back ownership’s decision to restrict an employee’s earning potential. As Keith Law wrote, “how many fans cheering on service time manipulation would be cool with their employers denying them a tenfold pay increase and forcing an extra year of indenture on them?”

Fan Marino: Service time manipulation is certainly not a new tactic, the Cubs did it with Kris Bryant, yet some are calling Guerrero Jr.’s case the most egregious in baseball history. The son of a Hall-of-Famer, Guerrero is hitting .339/.437/.576 in 17 AAA games; including a recent span where he hit a home run in 4 straight games.

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A.S. Roma Sign’s Massive Shirt Sponsorship Deal, Share Price Drops with Semi-Final Leg 1 Loss


A.S. Roma has announced the largest sponsorship deal in club history, a 3-year pact (begins in ’18-’19) that will make Qatar Airways the club’s official shirt sponsor through the ’20-’21 season. The deal, worth $48.7 million/season (or +/- 2.5x the NBA’s most valuable patch partnership), is among the largest ever signed by an Italian futbol club. The logo of Qatar’s state-owned airline will “adorn the front of the first team’s shirts” and the company will serve as the top flight Italian soccer side’s “Main Global Partner.” Qatar Airways becomes just the 7th kit sponsor in the club’s 90-year history; the first team has played without a shirt sponsor since the ’14 season.

Howie Long-Short: Limited shares of A.S. Roma trade on the Borsa Italiana under the symbol ASR (OTC: ASRAF). Interestingly, the share price over the last 30 days has mirrored the first team’s success (or lack thereof) on the pitch. When the club stunned Barcelona (overcoming a 4-1 loss in Leg 1) on April 10th to advance to the Uefa Champions League semi-finals, the share price jumped 22% to $.73; by Tuesday morning it had risen to $.82. The team dropped the first leg of the semi-finals (to Liverpool, 5-2) on Tuesday afternoon and the share price began to dip in after-hours trading; by Wednesday’s close, shares were down -14.7% (to $.70) from Tuesday’s high.

While stock performance has little correlation with wins and losses in North America (see: MSG +48% since Oct. ’15, Knicks winning percentage over same span is .374, RCI hit a 5-year low during the Blue Jay’s first trip to the playoffs since ’93 in ‘15), it requires a closer look in Europe. Like Roma, MANU is having a strong season on the pitch ranked 2nd in the EPL standings; since the club’s August 12th EPL season opener, shares are up 14% (to $19.10). JohnWallStreet will take a deeper dive the correlation between on-field performance and the share price of publicly traded European clubs, in the coming weeks.

Fan Marino: ASR is playing in the Uefa Champions League semi-finals for the first time in 34 years, but the club is going to need a dominant performance (at least a 3-goal victory) on May 2nd (2nd leg), to qualify for the final. Of course, had the team not scored 2 late goals (they trailed 5-0 in Leg 1); all hope would have dissipated. For those wondering, Real Madrid and Bayern Munich are competing in the other semi-final; Real Madrid won the 1st leg 2-1 on Wednesday afternoon.

U.S. soccer fans will have a chance to catch A.S. Roma (+ Liverpool, Real Madrid and Bayern Munich) live in action this summer. Beginning on July 20th, 18 of the world’s top club teams will compete in the 6th International Champions Cup presented by Heineken. The event’s 27 matches are spread across 3 continents (North America, Europe and Asia), with 17 on U.S. soil; Roma will play in East Rutherford (NJ), San Diego and Dallas. You can find full schedule and ticket info, here.

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WSJ: Just 7 Ways to Publicly Invest in Sports, JWS: Not the Case


The WSJ published a recent story asserting there are few ways to directly invest in sports, a notion we dispute. The article deemed just 7 publicly traded equities to be sports-related and based their conclusion, that fans are better off watching and playing sports than investing in them, on the performance of 2 exchange traded funds; one of which (FANZ) has beat the S&P since its July ’17 inception, which would seem to counter to their argument. The article cites Matt Hougan, the CEO of Inside ETFs, and his belief that most of the economic value within sports (ownership and player contracts) “comes in private transactions”, to support the author’s thesis; but fails to pay consideration to the revenue streams that support those contracts (and generate ownership profits). It’s worth noting that JohnWallStreet follows over 100 sports-related equities.

Howie Long-Short: Sports teams generate revenue from 4 sources; broadcast rights, ticket sales, sponsorships and merchandising. Several publicly traded equities use a similar business model; Churchill Downs (CHDN), International Speedway (ISCA), Dover Motorsports (DVD) and Speedway Motorsports (TRK), and thus should also be included on the list. Others, like Acushnet Holdings Corp. (GOLF) and Callaway Golf Company (ELY), are undeniably directly tied to sports; and no one would claim your basket was unfocused if companies like Nike (NKE), Lululemon (LULU) and Fitbit (FIT) were to be included. Oh, and don’t forget Activision Blizzard’s (ATVI) new esports league (Overwatch); their inaugural season starts today.

Fan Marino: The story names the New York Knicks, New York Rangers (MSG), Atlanta Braves (BATRK), Manchester United (MANU) and Borussia Dortmund (BORUF) as the teams you can purchase equity in. The Toronto Blue Jays, Toronto Maple Leafs (RCI), Juventus F.C. (JVTSF), A.S. Roma (ASRAF) and SS Lazio (BIT: SSL) are also all publicly traded.

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Amazon Takes on The Sports World; 25 Companies That Will Be Affected

Amazon has been credited with killing everything from book stores to electronics retailers since its 1994 launch. Now, with a market cap +/- $570 billion and $16 billion in annual operating cash flow, the company is taking aim at the sports world. In our final newsletter of 2017, we look at 4 of AMZN’s recent initiatives and the 25 companies most likely to be affected in 2018.

Amazon Expands Brand Registry Program, Now Includes Nike

In June, Nike (NKE) agreed to join Amazon’s brand registry program; seeking to curb counterfeiting and non-licensed selling within the e-commerce marketplace. The partnership also supports the athletic apparel and sneaker brand’s initiative to boost revenue through a shift to digital and DTC sales, relying less on struggling retailers. Competitors Adidas (ADDYY) and Under Armour (UAA) already have direct-sales deals in place with AMZN.

Names to Watch: FINL, DKS, FL, HIBB, BGFV; LON: SPD, LON: JD

Howie Long-Short: Athletic apparel and sneaker retailers count on NKE (70% of FL business comes from NKE); but NKE launched its “Consumer Direct Offense” strategy in fiscal Q1 ’18, increasing e-commerce business 19% YOY. Mediocre retailers beware, the company is maintaining just a few dozen wholesale relationships as it looks to increase its e-commerce business (from 15% of revenue to 30% over the next 5 years).

Amazon Entering Private-Label Sportswear Business

In October, Amazon (AMZN) announced it was entering the private-label sportswear business and working with the same Taiwanese suppliers, Makalot Industrial Co. (TPE: 1477) and Eclat Textile Co. (TPE: 1476), that some of the world’s biggest athletic brands use. Elcat’s involvement is particularly noteworthy as the company manufactures high-performance sportswear for Nike (NKE), Lululemon Athletica (LULU) and Under Armour (UAA).

Names to Watch: NKE, UAA, ADDYY, LULU; TPE: 1476, TPE: 1477

Howie Long-ShortAMZN wants to be in the private-label clothing business because it pushes retailers to sell inventory on the e-commerce site. Should a retailer choose not to, AMZN will simply produce the item themselves and compete directly against the brand.

The Pursuit of Exclusive Broadcast Rights

In September, the company hired Brian Potter to lead its sports video business. In November, Jim DeLorenzo, head of sports, Amazon Video, said the company was pleased with viewership numbers, engagement and the reliability/quality of the cloud-based streaming service during its season long experiment streaming Thursday Night Football (10 games, $50 million); though it is too early to say if the company will pursue future exclusive sports broadcasting rights. The company has since done deals that will deliver Prime subscribers 37 ATP tour events (previously owned by SKYAY), the AVP Beach Volleyball tour each of the next 3 summers and docu-series on Michigan Football.


Howie Long-Short: NFL Senior VP, Digital Media, Vishal Shah recently said “we continue to think some of the best days are ahead [for traditional TV partners] despite some shifts in the media landscape.” That doesn’t sound like linear television will be excluded in the next round of negotiations, but the NFL is encouraging interested media companies to bid on both television and streaming rights for the leagues TNF package; leaving the door ajar for the tech giants to receive exclusivity for the first time.

Twitch: The Future of Game Broadcasts?

Twitch, the live-streaming platform most often associated with video games, has agreed to stream up to 6 live G-League (Gatorade sponsored NBA minor league) games. Broadcasts will include interactive overlays (viewers can click a team name/logo for player, team, game and season stats), a loyalty program to reward viewer engagement during broadcasts (i.e. custom emotes for group chat) and the ability for users to provide their own live commentary (over the game feed) via the Twitch co-streaming feature.


Fan Marino: NBA Commissioner Adam Silver has gone on record stating he’d like to see changes in the way sports broadcasts are presented; pointing out the lack of live stats and chatter surrounding the broadcast, that gamers have become accustomed to. I’m not ready to give up Mike Breen, Marv Albert and Ian Eagle for Towelliee; but it’s worth watching to see if anyone else is.

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RCI May Sell Blue Jays, Worth $1.65B+

Rogers Communications, Inc. (RCI) is exploring a sale of the Toronto Blue Jays and its minority stake in Cogeco Communications (TSX: CCA), as the company focuses on growing revenue and increasing margins within its wireless and cable divisions. While talks remain in the exploratory stages and no deal is imminent, RCI is seeking “surface value” for the Toronto baseball franchise; believing the team remains undervalued within the larger conglomerate. Should the company sell the team, you can still expect RCI to carry Jays games; CFO Tony Staffieri stated, RCI “would like to get the content without having the capital tied up on our balance sheet”. The Canadian communications giant acquired the Blue Jays in 2000 for $137 million.

Howie Long-Short: Forbes valued the franchise at $1.3 billion (based on projected revenue of $278 million); I say that’s far too low. The Marlins, which lost $60 million in ‘17, sold for nearly 6x revenue; though I certainly would argue the Jeter group overpaid. If you’re going to give Toronto the same multiple, which isn’t unreasonable when you consider the franchise was projected to turn a profit of $22.9 million in ’17, you must assume the sale price is going to be at least $1.65 billion. I should note that shares of RCI are up 27% YTD.

Fan Marino: Blue Jays television analyst Gregg Zaun was recently terminated by Sportsnet after several women accused him of “inappropriate behavior and comments”. It is unclear how many women came forward and what the behavior entailed. To Sportnet’s credit, he was terminated immediately following an investigation into his wrongdoing.

Blue Jays Owner Rogers Communications Considering Selling Franchise

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Mike Golic Talks About Some Personal Finance Decisions

ESPN’s (DIS) long-running morning drive radio show Mike & Mike, is coming to an end; with the last show scheduled for Friday. Beginning Monday November 27th, Mike Golic will be joined in studio by new co-Host Trey Wingo. Golic & Wingo will air weekdays from 6-10a EST, with simulcast on ESPN2 (moving to ESPNU in January). JohnWallStreet had the opportunity to catch up with the guys to discuss finance, the NFL and their new show. In part 1 of a 3-part series, Mike Golic talks about some of the personal finance decisions he’s made.

JWS: Who handled your finances during your time in the NFL?

Golic: When I got into the league at 21 years old, my brother (Bob) was with IMG out of Cleveland; so, I went with them as well. I made the decision without even thinking about it. I hired them as my agent and they did everything. All my bills went to them. I was a business major, so it wasn’t like I was inept; but I said this is what you guys do, you offer this, I’m going to take it. You guys take care of my money to the point of paying my rent and bills.  

JWS: Did you think that you would make enough money playing football to carry you through the balance of your life?

Golic: No, I was in the league for 3 years before I made $100,000. This was before free agency, so even if I had been an all-pro player, the monster deals weren’t out there. I knew I could make some money.  In my 9 years, my salaries equaled up to a little more than $2 million. Certainly, nice money, but it wasn’t going to take care of me for the rest of my life.

JWS: Did you overspend during your playing career?  

Golic: I got drafted by the Houston Oilers and broke my ankle in training camp, so I was on injured reserve my whole rookie season. I went out a lot and when I went out a lot, I would buy drinks a lot; for a lot of people. 3 months in to the season, my agent and financial advisor called; he said, just because your credit card has a limit every month, does not mean you hit it.  That was my ding-ding moment. I’m not seeing anything because everything was going to them. I was only making $62,000 and I was just kind of spending it. I learned the lesson of man, know what is going on.

JWS: When did you decide to be more pro-active with paying your own bills?

Golic: When I got married and Chris (wife), who has an accounting degree, said we’re not doing this anymore. I’m going take care of the bills. The money is now going to run through us and I’m going to keep an eye on it.

Howie Long-Short: Mike earned $62,000 as an NFL rookie. Today’s NFL rookie minimum is $465,000. Had Mike played in today’s era, simply earning the league minimum in each of his 9 seasons, he would have made over $8.335 million in his playing career; more than 4x his actual on-field career earnings total.

Fan Marino: Fun Fact: One of the first investments made on Mike’s behalf was the purchase of shares in the Boston Celtics. The NBA franchise was traded on the NYSE until its 2002 sale. Currently the Knicks (MSG) and Raptors (RCI) are the only publicly traded NBA franchises. Howie seems to think MSG is undervalued.

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