Football Investing No Longer Exclusive to Oligarchs: Brera Holdings Releases IPO Statements – Brera Holdings (NASDAQ:BREA)

By Sydney Barrett Last updated Mar 13, 2023

By Adrian British

Following its $7,500,000 IPO and February’s Nasdaq Closing Bell Ceremony, Brera Holdings (NASDAQ:BREA) is making a series of announcements.
American investors are getting “soccer fever” while Europeans are moving from the oligarchs of the East to a much larger pool of investors.
Football is being promoted in Italy as one of the most important ways to improve social integration amid mass migration.

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Football investing has long been considered inaccessible to the common man. Owning football clubs seems to serve as a wealth preservation tool for those who made their money elsewhere and needed a safe bet. Perhaps surprisingly, a closer analysis of football club owners will also reveal oligarchs, some with Russian money, ex-politicians in exile, some even wanted by their countries. Many received the equivalent of a golden visa in exchange for massive investments in football stadiums.

Is it about time rich families who cashed in on Europe’s most lucrative sport shared this space with ordinary investors? From all indications it seems like this:

Multi Club Football Ownership (MCO): The strong starter

Now the market is changing. There is an impressive list of comers capable of challenging the oligarchs for a share of the action. A few rare listed companies use the multi-club football ownership (MCO) model to take stakes in the US$27 billion football industry in Europe and around the world. Brera Holdings (Nasdaq: BREA) is one of them, and perhaps the most recent related IPO being discussed by Wall Street insiders.

Brera Holdings is certainly not alone. According to Deloitte, in its annual review of football finance just five years ago there were 28 MCOs – today it is estimated that there are over 70. You are not alone: City Football Club (CFG), Redbird Capital and even Red Bull like the Government of Saudi Arabia are all key players in the MCO market.

Is European football turning towards American investors?

The European football industry is targeting US investors. As an industry that has historically courted investment from Saudi Arabia ($800 billion GDP) and Russia (under $2 trillion GDP), it can be argued that much has been left on the table. In contrast, the US economy represents a GDP of $22 trillion, while the combined EU GDP is around $16 trillion. Therefore, this bias towards American and European investors seems like an obvious choice.

Following the IPO of Brera Holdings (NASDAQ:BREA), now a publicly traded stock associated with football, CEO Sergio Scalpelli says, “Brera Holdings aims to provide exposure to the football industry for average and institutional investors. At the same time, we also want to consider our potential role in helping Italy and Europe improve social inclusion in times of change.” Additional explanations were also available on the companies’ website. Expansion plans beyond Italy were quickly announced: Brera Holdings issued a Letter of Intent (LOI) to acquire European Premier League football club Fudbalski Klub Akademija Pandev (“Akademija Pandev”) in North Macedonia.

For American investors, at a time when the euro is weak and the dollar strong, when sanctions are preventing many oligarchs from coming to Europe, it seems inevitable to seize the opportunities in Europe given a widening East-West divide. Also, travel, entertainment and sports stocks have been hurt during the pandemic, and many hedge funds are constantly scanning in hopes of spotting undervalued stocks with a specific imbalance: where earnings have recovered but share prices are still lagging.

Europeans are in a strong position: they are in an attractive part of the world with potential investors from all over the world, including China, Asia and the Middle East. But instead of complicating things with pesky oligarchs, the US hedge fund industry is worth $3.83 trillion, backed by the largest GDP in the world. With so many ordinary Europeans playing in their own stock markets, the potential investor pool is also substantial.

Football Industry Overview:

Exactly what lures cold and calculated investors into the hot and emotional football industry is not difficult at all to understand. The numbers always speak.

Media channels often sign six-figure deals to cover events, with major sports brands such as Nike and Adidas competing to secure sponsorship deals with clubs. With an average value for a Bundesliga player of over 8 million euros, this is of course big business.

Global search volume insights on Google data:

Related to football as a sport: 52 million similar searches.
Single name Lionel Messi: 4.5 million similar searches.
Single name Christiano Ronaldo: 4.5 million similar searches.

The astronomical cumulative search data will no doubt pique the interest of analysts.

In addition to universal football ownership, numerous famous clubs are themselves listed stocks, for example Manchester United, Arsenal, Rangers, Borussia Dortmund and Juventus.
Where Brera FC fits in: Brera, owned by (NASDAQ:BREA), is Milan’s third most popular football club, followed by Inter Milan at #2 (worth $1 billion) and AC Milan at #1 (worth $1 billion). 1.2 billion US dollars).

The Strategic Attractiveness of Multi-Club Football Ownership: The strategic advantage of the MCO model is not difficult to understand:

The combined scale provides greater leverage to recruit better players from abroad,
Advertisers, such as Nike and Adidas, can attract exponentially more exposure in more cities because they’re making potential deals with a single company.
Purchases of materials and machinery can be made in bulk for a number of clubs.
HR strategic advantages and the deduplication of top management positions are possible thanks to economies of scale.

Football as a means of social integration in Europe?

Football is not just about profit. It serves a much deeper purpose in today’s society. It is a common language that connects people. France has served as an example in recent years of what happens when mass migration is not followed by a clear social integration strategy. Many other European countries, such as Italy, Spain and Greece, are accepting large numbers of new migrants who do not share a common language, religion or culture.

Europeans understand that it is unrealistic to take on many people and simply integrate them into the workplace without social ties. Many argue that football is the only social activity that people share with Europe, especially considering the origins of many migrants. Social inclusion can form the basis for newcomers to Europe to realize their European dream. This is a shared vision shared by many football leaders, a dynamic that can hopefully become a topic of discussion for future European social finance and social investment initiatives.

In this context, it is also interesting to note that official sources state that most of Brera FC’s players are immigrants. When it comes to helping migrants taste the good life in Europe, Brera Holdings leads by example, unlike all those low-wage hospitality positions.

Final setting:

No one said hooliganism would disappear completely from football, so the chairs and drinking cups at the events will always be plastic. However, with many people sleeping during the pandemic, some listed companies have moved in and are now buying and consolidating strong portfolios of football clubs and related assets. Many of them are willing to give the average investor a piece of the action. You’ll likely need to seek professional advice when evaluating a list of football stocks to invest in. This area is one to watch closely over the coming months and years.

Adriaan Brits is an e-commerce specialist and industry analyst with extensive experience as a writer for IBTimes and Jpost. His investor newsletter gained momentum largely through his in-depth e-commerce research and trend analysis.