A very original way to make profitable savings is through football and very specifically channeled into STOXX Europe Football. Where some of the most important football clubs of the old continent are integrated. It is a sectorial index that is made up of 22 representative clubs of some of the most important leagues of the old continent. In them, German, Italian, French or Turkish teams. Of the relevance of Juventus, Rome. Porto or Borussia Dortmund. In no case is there a Spanish club despite their relevance in European competitions.
Under this general context, it is very important to detect the specific weight of the situation of these football clubs and determine whether or not they can integrate our portfolio of securities for the coming months. Because it is a somewhat particular investment, where not only its economic results have to be taken into account, but also whether or not the ball enters the opposite door. As has happened very recently with Juventus that after being eliminated in the quarterfinals in the Champions League He has seen his shares of stocks tumble on the floor with a decline of almost 20%.
They are outliers that can make a lot of money in a single trading session. But also influence that many euros are left on the way. Beyond other technical considerations and maybe even from the point of view of its fundamentals. Where your sports results are almost more important than the balance of your business accounts. Where you can't forget that more than companies are football clubs, with all the good and bad that this has to invest the savings through a certainly innovative proposal.
Soccer: more than just sport
To understand this very special European equity sector it is very important to know the income they have in recent years. Not surprisingly, it is the parameter that will indicate whether a team in this sport is profitable or not. To indicate the guidelines if it should be the object of our operations in the European equity markets. Despite the fact that many of them, including the Spanish, are not listed on the financial markets. In this way, both listed teams and those outside of these regulations are mixed in these business results. It is a mixed bag where they are all.
While on the contrary, those that are integrated into the so-called STOXX Europe Football It does not mean that they are the most economically powerful. There is everything, from those that generate more income to those whose relevance is rather little. The teams are not all the same and therefore are also reflected in these lists on the profitability provided by these special companies that are football clubs. Where some of the most profitable are precisely not listed in the specific index of these sports entities that we refer to in this article.
Growth of 18%
Spanish first and second division football clubs obtained global revenues in the 2017/18 season of 4.111 million euros, which represented a growth of 18,4% compared to the previous season. Excluding the transfer of players, the sector's turnover stood at 3.400 million euros, 8,7% more, 92% corresponding to first division clubs. Real Madrid CF and FC Barcelona they had a total turnover of 1.441 million euros, 42% of the total. These are some conclusions of the Basic Special Report “Football Clubs” recently published by the DBK Sector Observatory of INFORMA (a subsidiary of CESCE), a leader in the supply of Commercial, Financial, Sectorial and Marketing Information in Spain and Portugal.
According to INFORMA's DBK Sector Observatory, the global business volume of Spanish professional football has maintained great dynamism in recent years, registering continued growth in all major items of income. Thus, the first and second division clubs generated in the 2017/18 season, including transfers of footballers, an aggregate turnover of 4.111 million euros, which represented an increase of 18,4% compared to the previous season.
Club operating income
Excluding player transfers, revenues amounted to 3.400 million euros (operating income), 8,7% more than in the 2016/17 season and 54% above the 2.212 million recorded in 2014/15. The first division accounted for a turnover of 3.126 million (91,9% of the global figure), while the second division clubs obtained the remaining 274 million. In which the national entities play a very relevant role and it happens that none of them are listed on the equity markets. Being in some of the cases the ones with the highest income at the moment.
On the other hand, it should be noted that Real Madrid CF and FC Barcelona jointly generated operating income of 1.441 million euros, meeting a 42,4% share of the total. Real Madrid FC, with a turnover of 751 million euros and a 22,1% participation on the global, it was consolidated as the club with the highest income, while FC Barcelona had a turnover of 690 million, 20,3%. In third position was Atlético de Madrid, which in that season reached a share of 10,4% of the total income of the sector, followed by Sevilla FC and Athletic Club, with percentages of 4,9% and 3,9 %, respectively.
Liquidity from advertising
The marketing and advertising activity was the one that showed the best performance in the 2017/18 season, generating income for professional football of 914 million euros, which represents 11,9% more than in the previous season. Nevertheless, the main driver of revenue growth during the last seasons it has been the broadcasting chapter. Thus, in the 2017/18 season, clubs received 1.543 million euros for this concept, compared to 1.033 million in the 2015/16 season, which represented an average annual variation of 22%.
Compared to the 2016/17 season, the increase registered in the last campaign was 6,8%. It should be noted that retransmission income represents around 45% of the total operating income of first and second division clubs, although in 14 cases this percentage rises above 75%. For their part, match day income (which includes competitions and subscribers and partners) increased by 5,9% in the last season, to 791 million euros, with 111 million euros corresponding to other operating income. In a very recurrent trend in these sports companies that can be the object of the operations of small and medium investors.
Parameters to watch for
With regard to football clubs that are listed on the equity markets, a series of aspects must be emphasized to take into account if the desire of small and medium-sized investors is to take positions from these precise moments. In the first place, and how could it be less, the purely sports results: if you win games, if you win titles and the incidence of these. All these variables can help one of these values to appreciate in financial markets, in one intensity or another, as we have seen very recently with some of them.
While on the contrary, a factor as important as that linked to the signings of footballers cannot be forgotten either. It is enough to remember what happened last summer with the transfer of Cristiano Ronaldo from Real Madrid to Italian Juventus. An operation that can involve many millions of euros in the exchange of securities on the stock exchanges. All this without reflecting other very relevant aspects for the configuration of their prices. And they will be the ones that will ultimately determine the price dictated by the law of supply and demand in this class of companies that are listed on the equity markets.
Television rights
In any case, one of the most relevant sources of income for football clubs is that which has to do with television rights. They are essential to balance their financial budgets due to the high income they can receive for this important concept. Where there may also be some big differences between one and the other. To the point that they can be very well received by small and medium investors in their decision to take positions in the stock.
These are data that undoubtedly should be valued by all stock market agents in order to show whether it is the right time to open positions in these securities that are integrated in the STOXX Europe Football of the European stock market.
In the first place, and how could it be less, the purely sports results: if you win games, if you win titles and the incidence of these. All these variables can help one of these values to appreciate in financial markets, in one intensity or another, as we have seen very recently with some of them.