Football Fever: Why Invest in the Beautiful Game?
Connect with us

Business

Football Fever: Investing in the Beautiful Game

Published

on

Football Fever Investing Infographic

Football Fever: Investing in the Beautiful Game

The very mention of football conjures up images of cheering fans from all corners of the world.

The global appeal of the game is undeniable, and it’s the strong support of fans that has propelled its growth into a multi-billion dollar industry.

Today’s infographic from Swissquote tracks how the sport has reached far and wide—even onto the stock exchange.

The Timeline of the Manchester United IPO

Manchester United is the largest publicly-traded football club in the world. The journey of its initial public offering (IPO) can be traced back almost 30 years.

  • 1991: Man United floats on the London Stock Exchange (LSE)
    It aims to raise £10 million, but falls short and finally raises £6.7 million.
  • 2003-2005: Malcolm Glazer acquires ownership of Man United
    This raises the club’s market capitalization to £790 million, and it delists from the LSE.
  • 2012: Man United lists on the New York Stock Exchange
    It aims to raise £62.8 million in this IPO, but surpasses this with a final raised value of £146.3 million. Interestingly, George Soros was the biggest investor in this deal, buying a nearly 2% stake in the club.

What makes a football team like Manchester United so attractive in the eyes of investors?

Over decades, a flourishing fan base from viewers to consumers has been the force behind the football industry’s success as a whole.

The Big Business of Football

FIFA, the international governing body of football, organizes and promotes all major tournaments. Its total revenue between 2015-2018 can be broken down into a few main components:

Revenue SourceAmount% of total
Broadcasting rights€2,800 million48%
Marketing rights€1,500 million27%
Accommodation and ticket sales€600 million11%
Licensing rights€500 million9%
Other revenue€300 million5%
Total: €5,800 million

In fact, 83% of this total revenue came from the 2018 Russia World Cup alone. This was viewed by approximately 3.6 billion people—nearly half the world’s population.

The World Cup’s revenue even rivals the combined strength of the top five European clubs. How do the five major clubs make their money?

ClubMatchdayBroadcastCommercial/ Sponsorships2019 Revenue
FC Barcelona€159M€298M€384M€841M
Real Madrid€145M€258M€355M€757M
Man Utd€121M€274M€317M€712M
Bayern Munich€92M€211M€357M€660M
Paris Saint-German€116M€157M€363M€636M
Total€633M€1.2B€1.8B€3.6B

As viewership climbs, broadcasting rights furiously grow too—presenting numerous investment opportunities in sponsorship on the pitch and on the screen.

Cashing in on Clubs

Manchester United (NYSE:MANU) set a new precedent for publicly-traded football clubs—with a market cap worth near €1.8 billion today.

Following Man United’s example, other major clubs have since gone public across Europe. As well, Asia presents an emerging opportunity as the sport’s regional popularity expands.

ClubStock TickerMkt Cap (Jul 31, 2020)
🇮🇹 Juventus FC S.p.AJUVE:IM€1.19B
🇩🇪 Borussia DortmundBVB:GR€511M
🇮🇹 AS RomaASR:IM€320M
🇬🇧 Celtic F.C.CCP:LN€108M (£97M)
🇨🇳 Guangzhou Evergrande TaobaoNEEQ:834338N/A
🇮🇩 Bali UnitedIDX:BOLA€57M (Rp894B)

China’s most valuable football club—backed in part by e-commerce giant Alibaba—closely matches the valuation of Manchester United.

In Southeast Asia, Bali United was the first team to go public in June 2019. Shares jumped 69% higher than the initial listing price upon its IPO. This move is already propelling more planned IPOs for more football teams in the region, such as Persija Jakarta—the 2018 Liga 1 champion—and Thailand’s Buriram United.

The Future of Football

Football has the power to stir passions and unite people—and it’s reinventing itself constantly.

The 2019 Women’s World Cup was the most watched in tournament history, with over 1.12 billion tuning in. FIFA plans to invest almost €454 million more into the women’s game between 2019-2022, and grow the number of female players to 600 million by 2026.

Additionally, the annual esports tournament eWorld Cup is taking place in Thailand in 2020—tapping into the esports boom in Asia, which hosts 57% of esports enthusiasts.

Any football fan will tell you that the beautiful game is more than just a sport. And for investors, there are a variety of ways to gain exposure to this market—meaning fans can be both personally and financially invested as it continues to grow.

Click for Comments

Markets

The World’s Biggest Real Estate Bubbles in 2021

According to UBS, there are nine real estate markets that are in bubble territory with prices rising to unsustainable levels.

Published

on

Ranked: The World’s Biggest Real Estate Bubbles in 2021

Identifying real estate bubbles is a tricky business. After all, even though many of us “know a bubble when we see it”, we don’t have tangible proof of a bubble until it actually bursts.

And by then, it’s too late.

The map above, based on data from the Real Estate Bubble Index by UBS, serves as an early warning system, evaluating 25 global cities and scoring them based on their bubble risk.

Reading the Signs

Bubbles are hard to distinguish in real-time as investors must judge whether a market’s pricing accurately reflects what will happen in the future. Even so, there are some signs to watch out for.

As one example, a decoupling of prices from local incomes and rents is a common red flag. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.

With this in mind, which global markets are exhibiting the most bubble risk?

The Geography of Real Estate Bubbles

Europe is home to a number of cities that have extreme bubble risk, with Frankfurt topping the list this year. Germany’s financial hub has seen real home prices rise by 10% per year on average since 2016—the highest rate of all cities evaluated.

housing bubble index 2021

Two Canadian cities also find themselves in bubble territory: Toronto and Vancouver. In the former, nearly 30% of purchases in 2021 went to buyers with multiple properties, showing that real estate investment is alive and well. Despite efforts to cool down these hot urban markets, Canadian markets have rebounded and continued their march upward. In fact, over the past three decades, residential home prices in Canada grew at the fastest rates in the G7.

Despite civil unrest and unease over new policies, Hong Kong still has the second highest score in this index. Meanwhile, Dubai is listed as “undervalued” and is the only city in the index with a negative score. Residential prices have trended down for the past six years and are now down nearly 40% from 2014 levels.

Note: The Real Estate Bubble Index does not currently include cities in Mainland China.

Trending Ever Upward

Overheated markets are nothing new, though the COVID-19 pandemic has changed the dynamic of real estate markets.

For years, house price appreciation in city centers was all but guaranteed as construction boomed and people were eager to live an urban lifestyle. Remote work options and office downsizing is changing the value equation for many, and as a result, housing prices in non-urban areas increased faster than in cities for the first time since the 1990s.

Even so, these changing priorities haven’t deflated the real estate market in the world’s global cities. Below are growth rates for 2021 so far, and how that compares to the last five years.

housing bubble price increases 2021

Overall, prices have been trending upward almost everywhere. All but four of the cities above—Milan, Paris, New York, and San Francisco—have had positive growth year-on-year.

Even as real estate bubbles continue to grow, there is an element of uncertainty. Debt-to-income ratios continue to rise, and lending standards, which were relaxed during the pandemic, are tightening once again. Add in the societal shifts occurring right now, and predicting the future of these markets becomes more difficult.

In the short term, we may see what UBS calls “the era of urban outperformance” come to an end.

Continue Reading

Markets

The World’s 100 Most Valuable Brands in 2021

COVID-19 hit the global economy hard, but some companies thrived amidst the chaos. Here are the top 100 most valuable brands of 2021.

Published

on

Most Valuable Brands 2021

The World’s Top 100 Most Valuable Brands in 2021

In 2020, the global economy experienced one of the worst declines since the Great Depression.

Yet, while the ripple effects of COVID-19 have thrown many businesses into disarray, some companies have not only managed to stay afloat amidst the chaos—they’ve thrived. Using data from Kantar BrandZ, this graphic looks at the top 100 most valuable brands of 2021.

Methodology

Each year, research group Kantar BrandZ ranks companies based on their “brand value,” which is measured by:

  1. A brand’s total financial value, which is the financial contribution that brand brings to its parent company ($ value).
  2. Multiplied by its proportional value, measured by the brands proportional impact on its parent company’s sales (% value).

The financial results are then combined with quantitative survey data, sourced from over 170,000 global consumers. The end result is a holistic look at a company’s brand equity, reputation, and ability to generate value.

The Leaderboard

The total value of 2021’s Top 100 brands grew by 42%, reaching a combined $7 trillion. At the top of the list, perhaps unsurprisingly, is Amazon, with a total brand value of $683 billion.

RankBrandBrand Value
($B USD)
CategoryBrand Value %
change from 2020
1Amazon$683.85Consumer Goods & Retail64%
2Apple$612.00 Technology74%
3Google$458.00 Media & Entertainment42%
4Microsoft$410.27 Business Solutions & Tech Providers26%
5Tencent$240.93 Media & Entertainment60%
6Facebook$226.74 Media & Entertainment54%
7Alibaba$196.91 Consumer Goods & Retail29%
8Visa$191.29 Financial Services2%
9McDonald's$154.92 Food & Beverages20%
10Mastercard$112.88 Financial Services4%
11Moutai$109.33 Food & Beverages103%
12Nvidia$104.76 Business Solutions & Tech Providersn/a
13Verizon$101.94 Telecom Providers8%
14AT&T$100.65 Telecom Providers-5%
15IBM$91.34 Business Solutions & Tech Providers9%
16Coca-Cola$87.60 Food & Beverages4%
17Nike$83.71 Consumer Goods & Retail68%
18Instagram$82.90 Media & Entertainment100%
19PayPal$80.62 Payments66%
20Adobe$78.52 Business Solutions & Tech Providersn/a
21Louis Vuitton$75.73 Consumer Goods & Retail46%
22UPS$73.02 Logistics44%
23Intel$71.94 Business Solutions & Tech Providersn/a
24Netflix$71.13 Media & Entertainment55%
25The Home Depot$70.52 Consumer Goods & Retail22%
26SAP$69.24 Business Solutions & Tech Providers20%
27Accenture$64.73 Business Solutions & Tech Providersn/a
28Oracle$60.84 Business Solutions & Tech Providersn/a
29Starbucks$60.27 Food & Beverages26%
30Walmart$59.52 Consumer Goods & Retail30%
31Xfinity$59.00 Telecom Providers26%
32Marlboro$57.01 Consumer Goods & Retail-2%
33Disney$55.22 Media & Entertainment13%
34Meituan$52.40Technology119%
35Texas Instruments$49.24Business Solutions & Tech Providersn/a
36Salesforce$48.98Business Solutions & Tech Providers61%
37Qualcomm$48.36Business Solutions & Tech Providersn/a
38Spectrum$47.28 Telecom Providers10%
39YouTube$47.10Media & Entertainment39%
40Chanel$47.05 Consumer Goods & Retail30%
41Cisco$46.82 Business Solutions & Tech Providersn/a
42Samsung$46.77 Technology44%
43Hermès$46.40Consumer Goods & Retail40%
44JD$44.52 Consumer Goods & Retail75%
45TikTok$43.52 Media & Entertainment158%
46Deutsche Telekom$43.10 Telecom Providers16%
47Tesla$42.61 Cars & Transportation275%
48L'Oréal Paris$38.31 Consumer Goods & Retail30%
49Ping An$38.05Insurance13%
50Huawei$38.02 Technology29%
51ICBC$37.77 Financial Services-1%
52Zoom$36.93 Business Solutions & Tech Providersn/a
53Intuit$35.87 Business Solutions & Tech Providersn/a
54Linkedin$35.52 Media & Entertainment19%
55Costco$35.14 Consumer Goods & Retail23%
56Gucci$33.84 Consumer Goods & Retail24%
57AMD$32.92 Business Solutions & Tech Providersn/a
58Tata Consulting Services$31.28 Business Solutions & Tech Providersn/a
59Xbox$30.40 Technology55%
60Vodafone$29.74Telecom Providers29%
61American Express$28.58 Financial Services-3%
62Wells Fargo$28.00 Financial Services-8%
63RBC$27.61 Financial Services33%
64Toyota$26.97 Cars & Transportation-5%
65Haier$26.42 Technology41%
66HDFC Bank$26.37 Financial Services27%
67Mercedes-Benz$25.84 Cars & Transportation21%
68China Mobile$25.82 Telecom Providers-25%
69Budweiser$25.55 Food & Beverages5%
70Xiaomi$24.89 Technology50%
71BMW$24.82 Cars & Transportation21%
72Dell Technologies$24.78 Business Solutions & Tech Providers36%
73LIC$24.14 Insurance38%
74J.P. Morgan$24.11 Financial Services37%
75Siemens$23.64Conglomerate69%
76Fedex$23.59 Logistics53%
77Baidu$23.36 Media & Entertainment57%
78Uber$22.41 Cars & Transportation41%
79Adidas$22.34 Consumer Goods & Retail51%
80Chase$21.83 Financial Services7%
81Pinduoduo$21.73 Consumer Goods & Retail131%
82Snapchat$21.61 Media & Entertainmentn/a
83Zara$21.38 Consumer Goods & Retail0%
84Ikea$21.02 Consumer Goods & Retail17%
85UnitedHealthCare$20.87 Insurance32%
86Lowe's$20.67 Consumer Goods & Retail51%
87AIA$20.60 Insurance16%
88NTT$20.48 Telecom Providers1%
89Autodesk$20.45 Business Solutions & Tech Providersn/a
90TD$20.21 Financial Services17%
91Orange$20.20 Telecom Providers4%
92DHL$20.14 Logistics39%
93Didi Chuxing$20.04 Cars & Transportation0%
94China Construction Bank$19.78 Financial Services-6%
95Pampers$19.62 Consumer Goods & Retail6%
96KE$19.50Consumer Goods & Retailn/a
97Commonwealth Bank$19.47 Financial Services48%
98Bank of America$19.32 Financial Services14%
99Spotify$19.28 Media & Entertainmentn/a
100Colgate$18.89 Consumer Goods & Retail8%

It’s the third consecutive year that Amazon has placed first on the list. Since last year’s ranking, the ecommerce brand has seen its value grow by 64%. Keep in mind, this accounts for all areas of Amazon’s business, including its web and subscription services.

Second on the list is Apple with a brand value of $612 billion. Apple wasn’t completely immune to the impacts of COVID-19—in the early days of the pandemic, its stock dipped almost 19% from record highs—but the company recovered and reported record-breaking revenue, generating $64.7 billion in Q4 2020.

It’s fitting that the top brands on the list are big tech companies since the pandemic pushed consumers online for both their shopping and entertainment needs. A few social media platforms placed high on the list as well, like Facebook, which rose two ranks this year to score the sixth spot with a brand value of $227 billion.

Instagram and TikTok trailed behind Facebook when it came to total brand value, but both platforms saw exceptional growth compared to last year’s report. In fact, when looking at brand value growth from 2020, both brands scored a spot in the top 10.

Insights into Brand Value Growth

The most valuable brand report has been ranking companies for over a decade, and some overarching factors have stood out as key contributors to brand value growth:

1. The Big Get Bigger

Starting “strong” can give brands an edge. This is because growth rate is closely correlated with high brand equity. In other words, a strong brand will likely see more growth than a weaker brand, which might explain why companies like Amazon and Apple have been able to hold their place at the top for several consecutive years.

Keep in mind, this doesn’t account for industry disruptors. An innovative company could come out of the woodwork next year and give the Big Tech giants a run for their money.

2. Marketing Makes a Difference

The right strategy can make a difference, and even smaller brands can make a splash if the message is impactful. Brands with emotional associations, like pride or popularity, tend to see that translate into brand value growth.

Companies like Nike and Coca-Cola have mastered the art of emotional advertising. For instance, in May last year, Nike released a video urging consumers to stand up for equality, in a video titled, “For Once, Just Don’t Do It.”

3. Smart Investment

It’s not just about developing an effective marketing strategy, it’s about executing that strategy, and continually investing in ways that perpetuate your brand message.

For instance, innovation is the core value of Tesla’s brand, and the electric car company walks the walk—in 2020, the company spent $1.5 billion on R&D.

Continue Reading

Subscribe

Popular