MCD - 24/7 Market News Publishes Report on Italian Football Club Developments Featuring Brera Holdings

2024-05-16 06:24:42 ET

DENVER, Colo., May 16, 2024 ( 247marketnews.com )- Exploring Brera Holdings’ Plan to Invest ~20 Million Euro in Serie B, Potential Long-Term Club Development and Economic Impact

Brera Holdings PLC (Nasdaq: BREA ) (“Brera”) is focused on bottom-up value creation from overlooked sports clubs and talent, and is developing a global portfolio of emerging football (soccer) and other sports clubs; starting with its first football club acquisition, Brera FC, known as “The Third Team of Milan”, in 2022.

Brera is a Multi Club Ownership (MCO) operator that now owns first division football teams Brera Tchumene FC, in Mozambique, Brera Ilch FC, in Mongolia, 90% ownership of Fudbalski Klub Akademija Pandev, in North Macedonia, and majority ownership in Italian Serie A1 women’s professional volleyball team, UYBA Volley S.s.d.a.r.l.

Brera Holdings has taken a unique approach to club ownership and intends to add multiple revenue generation avenues. The MCO model means that Brera doesn’t need to rely on one team to win, the model allows for talent flow and management to decide which teams earned or deserve the resources at their stage of development. If Brera’s management and acquisitions perform as expected, the market should reward that success with additional resources and media.

Brera Holdings became a public listing, via Nasdaq IPO, a little over a year ago, and is looking to acquire teams that can benefit from its experienced management, or where additional funding sources can positively make an immediate impact on the team. The Company recently announced that they are in talks to expand their MCO model in Italy by acquiring a Serie B team.

Brera’s all-star management and advisory teams are loaded with prominent sports and business names, including Investment Banker, Dan McClory, Massimo Ferragamo of the Ferragamo fashion house, and one of the biggest names in global soccer, Alan Rothenberg, who was president of U.S. Soccer, established Major League Soccer (“MLS”), oversaw both the 1994 FIFA World Cup, which is still considered to be the most successful sporting event ever, and was instrumental in the awarding of the 2026 FIFA World Cup to the U.S. The team’s most recent addition, Maria Xing, is nothing short of being a leading sports team acquisition specialist,

The company has not publicly detailed its Italian professional football team acquisition plans, but Brera announced a $100 million mini shelf registration for the upcoming acquisitions, which may lead one to wonder why not acquire one of England’s 24 EFL Championship League teams?

The English Premier League and the EFL Championship League Leading the Way

The EFL Championship League is English football’s rebranded second tier and there is a lot of history to unpack with the changes that occurred after the introduction of the Premier League in 1992. To sum it up, the teams playing in the EFL Championship League include some historic soccer clubs that date back to 1888. These are the teams fighting for a spot on the Premier League, which includes the world’s most valuable group of soccer clubs.

According to Forbes, in 2023, England’s Premier League boasted more than 7 clubs worth $1 billion, with the top being Manchester United.  Leichester City was at the top of the EFL Championship list with a value of around $781 million, but was recently promoted back to the Premier League.

The Premier League’s valuation gains is the wave that’s lift all global football tides, including the EFL Championship League. The headlining event, Sir Jim Ratcliff spending well over $1 billion to purchase a 25% stake in Manchester United, will trickle down and affect global club market.

The reverberations were immediate, as Bright Path Sports Partners purchased a 40% stake in Ipswich Town, a second-Tier English club, for US $132 million, only a few weeks after Ratcliff’s Man U move. Ipswich finished second, just one point behind the winner, and will return to the top-flight for the first time in 22 years, so their well-timed investment into the club will be handsomely rewarded, even though $132M only purchased a minority shareholder stake.

The cost of running the clubs, acquiring players, and maintaining the team’s competitiveness may be aided by the owner’s ability to fund, as spending can increase the odds of winning and the prize for a Premier League promotion is worth hundreds of millions of dollars.

Breara holdings are using their talent as well as their shareholders’ backing to acquire clubs that they can own outright and usher in a new era of success.

The world is witnessing Ryan Reynolds and Rob McElhenney flawlessly execute this strategy with their $2.5 million Wrexham acquisition, despite reports of the actors losing $11 million on the team. What the American media overlooked is, since the actors purchased what was the longest-tenured team in the fifth-tier of English football, Wrexham’s second consecutive season promotions will have the club playing in League One, starting this fall, increasing the club’s valuation by multiples of their investment. The club is currently discussing plans to expand stadium capacity from under 15,000 to 55,000, which indicates Wrexham’s true valuation level.

Unlocking Value in Europe

Now that the English value plays are nearly impossible to find, wise investors are looking elsewhere in Europe and the same holds true for sponsors. For example, RMC Sport reported that McDonald’s (NYSE: MCD ) recently sent an official offer for the French Ligue 1 naming rights, as the Ligue 1 agreement with Uber Eats (NYSE: UBER ) is set to expire.

Italy Serie A boasts three teams that made Forbes’ most valuable list, with Juventus leading the way at an estimated $2.16 billion. These team valuations are benefitting from the English professional football investment craze and allowed Italian teams to quickly recover from covid lockdown losses.  Genoa was purchased by 777 partners, in 2021, for an estimated $170 million and, according to Forbes, the 2024 season will be the club’s first to generate a positive EBITA since the takeover, showing how quickly the right team and funds can turn a situation around.

Italy is enjoying a sort of soccer renaissance and, according to Football Italiano, Seire A club valuations increased an average of 30%, over the last two years, despite a significant drop in operating income, compared to the Premier League 12% same period revenue gains.

New stadium plans and renovations, as well as big partnerships with adidas (OCT:ADDYY) , Jeep and others helped to create excitement around Serie A, which developed a relationship with video game developer, Electronic Arts (EA) Sports (NASDAQ: EA ) as an exclusive video game licensee partner. Plus, Serie A’s new broadcast deal with DAZN is valued at more than 2.5 billion euros.

The influx of capital and increased Serie A team values, make a sound argument for Brera’s approach when negotiating to purchase a Serie B team for around $20 million. With management and funding, several, of twenty, Serie B teams would likely become much better and enable them to procure top players and team management, breathing new life into these storied franchises.

The numbers confirm that Serie B offers Brera Holdings significant strategic advantages to maximize its upside, as lower acquisition costs will enable Brera to focus on getting the best management and players, while simultaneously offering the most potential for growth in both sporting achievements and financial returns. Plus, a potential Serie A promotion would add significant value to the company in terms of improved broadcasting deals, sponsorship deals, stronger transfer market, increased league revenues, and community involvement.

Brera’s business model also allows the public to participate in their strategy as shareholders and part owners, creating additional excitement and anticipation for the company’s success.

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