Investing in Sports: Opportunities Abroad
The recent success of sports betting apps in Brazil is a testament to the country’s passion for sports. However, for those interested in investing in the sports industry, there are options beyond gambling, such as investing in football and basketball clubs or companies dedicated to the management and organization of sporting events. One way to do this is by purchasing shares of “corporate clubs” listed abroad, which can rise and fall in value based on buy and sell proposals.
The case of Manchester United is a recent example of this, with the club’s shares on the New York Stock Exchange being acquired by two different investors. There are also opportunities to invest in football clubs that are not undergoing changes in control, such as Juventus and Borussia Dortmund. Beyond European football, investors can consider purchasing shares in Madison Square Garden Sports or Liberty Media, which owns the rights to Formula 1, among other sports assets.
While having a soccer club listed on the stock market is not yet a reality in Brazil, the SAF model (Sociedad Anónima de Fútbol) introduced in 2021 allows entrepreneurs or investors to own part or all of a team. Botafogo, Cruzeiro, and Bahía are some of the Brazilian clubs that have adopted this structure, which allows for the possibility of going public in the future.
Expanding on the Opportunities and Risks of Sports Investments
Investing in sports can be an exciting and potentially profitable venture for those who are passionate about the industry. However, it’s important to understand the risks and opportunities involved to make informed investment decisions.
With the global popularity of sports and the increasing financial potential of the industry, investing in sports assets has become a viable option for many. In addition to the examples mentioned in the original piece, investors can also consider purchasing shares of publicly traded sports apparel companies such as Nike, Adidas, and Under Armour.
However, investing in sports comes with various risks, such as the potential for clubs or teams to perform poorly, resulting in a decrease in stock value. There is also the possibility of controversies, such as fan backlash against owners or players, which can negatively affect stock prices. In addition, the COVID-19 pandemic has had a significant impact on the sports industry, with many sports events being cancelled or delayed, leading to losses for investors.
Despite these risks, investing in sports can be a rewarding experience for those who are passionate about the industry. By researching and understanding the opportunities and risks involved, investors can make informed decisions and potentially reap the rewards of investing in a growing and ever-evolving industry.
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The recent success of sports betting apps is another example of the interest Brazilians have in sports. But for those who want to get away from gambling and really invest in the sector, there are options that include investments in football and basketball clubs and also companies dedicated to the management and celebration of sporting events. And all this can be done by buying shares of these “corporate clubs” abroad.
And just like companies, these clubs also go through buy and sell proposals that affect the price of the asset. The most recent case is that of the English Manchester United, which has had shares on the New York Stock Exchange since 2012 and is being acquired by two different investors.
The club’s shares rose from US$13, at the end of November, to US$18.82 at the close of this Friday (2), with a market value of US$3 billion.
This advance reflects the dispute between the British Jim Ratcliff, owner of the chemical company INEOS, and the Qatari banker Jassim bin Hamad Al-Thani, for control of the club, with proposals that already exceed US $ 5,000 million.
There are also alternatives to invest in soccer clubs that are not in the process of changing control. Juventus, of Italy, has shares traded on the Milan stock exchange. The shares have a price of 0.33 euros, stable during the year, with a market value of 823 million euros.
The club’s most recent peak on the stock market was in 2018, when the shares rose from 1.30 in the period in which the signing of Cristiano Ronaldo to the club was announced, but the good moment was short-lived – and neither was the Portuguese star, who of Italian origin- Soccer went to England and is now in Saudi Arabia.
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Unlike Brazil, it is not uncommon for businessmen to control clubs. The majority shareholder of Juventus is the Agnelli family, which gave rise to the Fiat Group.
Still in European football, Borussia Dortmund has shares on the electronic platform of the Frankfurt Stock Exchange. The market value of the German team is 475 million euros.
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Where to invest abroad, in addition to football
Don’t you like football or do you want options beyond European football? For these investors, it is possible to invest in shares of Madison Square Garden Sports, which owns the NBA team New York Knicks, and New York Rangers, owned by Hochey.
Madison Square Garden Sports shares closed last Friday at US$ 178.41 on the New York Stock Exchange, which represents a 2.7% drop in the accumulated result for the year.
This company is a spin-off of Madison Square Entertainment, which controls, among other things, a multi-purpose stadium in New York.
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Further diversification within the world of sports may also occur for those who invest in Liberty Media. The company owns the rights to Formula 1, owns the Atlanta Braves baseball team and has a stake in Meyer Shank Racing, a motorsport.
With so many assets, the company has a market capitalization of $9.3 billion and is listed on the Nasdaq.
Sports investments in Brazil
In Brazil, having a soccer club listed on the stock market is still a distant reality. However, since 2021, clubs can adhere to the SAF model (Sociedad Anónima de Fútbol)in which entrepreneurs or investors may own part or all of the equipment.
The most famous AFS cases in Brazil are Botafogo, now owned by American businessman John Textor; Cruzeiro, who is with former player Ronaldo Fenômeno, and Bahía, which was bought by Grupo City, which already controls Manchester City, from the United Kingdom, as well as clubs from the United States, Italy, Uruguay, Spain, among others.
In this structure, in theory, a SAF will be able to go public and investors will be able to buy shares in these teams, but none of the existing companies are close to that step.
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