The Billionaire Men’s Club
Brera Holdings is Your Shot at Scoring Big in the MCO Craze
Steve Ballmer, Sheikh Mansour, Mark Cuban, Roman Abramovich, Jerry Jones, and Robert Kraft are uber-elite multi-billionaires who dominate global business. Their wealth is legendary, and unsurprisingly, they have a common investment strategy: buying professional sports teams.
To the masses, these mega-investments appeared to be vanity purchases; the price of admission to their ultra-exclusive club. In reality, however, these billionaires identified huge investment opportunities well before the masses. Recognizing this phenomenon, Brera Holdings (NASDAQ:BREA) set out to bring professional sport team ownership, with its high return-on-investment, to everyday investors.
Brera Holdings (NASDAQ:BREA) is an Italian football (soccer) club that’s your shot at multi-club ownership (“MCO”) and, according to the experts at Nasdaq, may be nearly five times undervalued, despite the fact that it’s about to unveil its biggest developments yet.
“Multi-club ownership is the hottest trend in global football. It allows owners to spread their costs and risks, discover and develop talent across a network of clubs, and offer sponsors worldwide opportunities with a single partner.” Financial Times
Pierre Galoppi, Brera’s CEO, has 30+ years of international business, public markets, and investment banking experience. Galoppi already guided Brera through its majority control acquisition of a North Macedonia first-division team, and established a second-division squad in Mozambique, which has since been promoted to that country’s Premier League.
The smart money is pouring into Professional Football, with hedge-fund billionaire Leon Cooperman taking a $16.8 million stake in Manchester United, as Sir Jim Ratcliffe is moving forward with his high profile £1.34 billion offer to acquire 25% of MANU, which Reuters reported values Man U at $6-6.5 billion including current debt. Ratcliffe’s INEOS is an MCO that already owns OGC Nice and Lausanne, in addition to his other sports properties, like INEOS Grenadiers cycling team, which is a mainstay at races like the Tour de France.
Michael Eisner purchased League One club, Portsmouth, in 2017, and du Pont family member, John Textor, the owner of Eagle Football Holdings and pro football clubs Botafogo, Crystal Palace, Olympique Lyonnais (male and female), OL Reign, and RWD Molenbeek.
It’s not that they knew something that even casual fans didn’t now, they simply have the horsepower to play in a game that we couldn’t join.
That is, until now, thanks to BREA taking its MCO model to the NASDAQ.
While most football club acquisition details are guarded, Malcom Glazer’s £790 million (about $1.47 billion at the time) leveraged buyout of 98% of Man U’s shares, in 2005, were very public, including how he rolled $787 million of the buyout debt onto the club’s books.
Glazer booked a 4X return (way more on a leveraged basis), yet he still has some further upside.
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You may be thinking that those returns only happen with the mighty Man U, one of the highest profile sports teams on the planet, but when little known Wolverhampton Wanderers were purchased, in 2016, for £45 million, by Chinese group Fosun International, its estimated value jumped up more than ten times that sales price in six years.
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Gino Pozzo purchased EPL football club, Watford, for £500K and paid off its £10 million debt, and a few short years later Watford is reportedly valued at £350 million.
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As appealing as those results are, there are plenty of second, third, and forth division clubs that have yielded even better returns.
It’s not just sheiks and oligarchs, many leading global brands are joining the party.
Red Bull spearheaded the MCO movement when it shifted from just sponsoring extreme athletes to purchasing five football teams in Europe and the Americas.
Red Bull, which paid $25 million to form an MLS team that Forbes reported to be valued at nearly $300 million, has been rewarded handsomely from its football investments and Red Bull’s energy drink sales have increased as a result of increasing their football exposure.
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Manchester City copied Red Bull’s model and owns or partnered with 13 clubs on five continents. City then inked a deal to team with Puma athleticwear, valued at $860 million, in which Puma will be branded on the 13 team jerseys.
UEFA published research shows that over 180 clubs worldwide were part of an MCO model and UEFA president Aleksander Ceferin has been very vocal in his support of MCO expansion.
Football is Life
Years of Man U mismanagement left the club a shell of its former self and resulted in a toxic relationship with the supporters. Conversely, when Fenway Sports Group took control of Liverpool FC, MANU’s bitter rivals, FSC first halted LFC’s financial slide and then hired elite coach, Jurgen Klopp. Klopp quickly returned the storied club to the top of international professional football, after decades absence, and Liverpool are still singing.
For us, our football is a small part of life, but football soccer clubs throughout the world tend to be societal pillars that unite all demographics and, since fans are born into club supporting families, football is also an intergenerational glue that binds communities.
In March 2023, Brera established Brera Tchumene, a team admitted to Mozambique’s Second Division, which was recently promoted to Moçambola (Mozambique’s Premier Division).
Brera, known as “The Third Team of Milan”, is proactively searching for an Italian Serie B, second division, football club, following the lessons learned from its Brera Tchumene success.
In addition to finance, structure, platform, and results on the pitch, Galoppi understands the communities’ affinity for their clubs and plans on building on that history, character, and football style. By enhancing that foundation, Brera becomes a valued leader, rather than a hated owner.
Brera is focused on acquiring a Serie B club, which requires a much lower initial investment, and elevating it to Serie A, the top flight of Italian professional football and one of the top four football leagues in the world.
Investing in an underperforming Serie B football club and turning it around to become Serie A club immediately enhances the club’s brand and increases multiple revenue streams, like ticket sales, merchandising, sponsorships, concession sales, broadcasting rights, and special events.
Player development and scouting are two areas that smaller clubs can see huge results that the big clubs missed and the MCO model enhances the natural player developmental pipeline.
Successful club turnarounds are legendary and sustainable. FC Heidenheim is a tiny club that split, in 2007, from a 160-year-old amateur athletics club and started as a regional fourth-tier operation. FCH is now playing in the Bundesliga, Germany’s Premier League, for the first time, mostly fielding players from its strong youth development system.
Despite Heidenheim’s 50,000 population and 15,000 seat stadium, it’s already profitable and fighting for a spot in the Europa League playoffs, where it can practically print money.
Union Saint-Gilloise is a team that plays in an 8,000-seat stadium and was purchased a few years ago. They are already back in Belgium’s top flight, after a 48-year absence, and the tiny club earned over $20 million to play in the UEFA Champions League. Additionally, the club earns big money for selling player rights, like the $20 million it recently received from a German club.
Green Bay is the only city that’s home to a major North American professional sports franchise that can even remotely identify with Union SG or Heidenheim.
The Cheeseheads, Green Bay’s fans, probably most resemble a soccer team fanbase, which may explain why the team was able to recently pay for upgrades by selling shares of “stock” that have no voting power and can only be resold, back to the team, for a fraction of the original price.
Despite articles with titles like “Buying Packers ‘stock’ is the best scam in sports” the Cheeseheads lined up for a $300 per share offering that exceeded their allotted shares.
This broad-based community support has not only kept the team in Green Bay, by far, the smallest market in all of North American major professional sports, but helped it become the most popular sports franchise in North America, which Forbes valued at $4.6B, last year.
The NFL is the biggest sport in America, but, thanks to international television rights and sponsorship deals, the Premier League is easily the world’s biggest revenue-generating league, and football soccer teams’ fan engagement reach tends to dwarf the NFL, as well.
The UEFA Champions League’s international audience, like the FIFA World Cup, dwarfs the NFL’s Superbowl. An estimated 700 million viewers watched Real Madrid play Liverpool.
FENIX Trophy Tournament – A Unique Value Add
Brera Holdings is perfectly positioned to take community building and goodwill well past the Packers’ wildest dreams, as it organized, promoted participates in, and owns, the FENIX Trophy tournament, recognized by UEFA, which controls the UEFA Champions League and Europa League, the two most valuable and watched professional sports tournaments.
The FENIX Trophy was inaugurated in 2021 and was a public relations success, with the Final Eight taking place in Rimini, Italy, in June 2022, enjoying extensive national (SKY Sports TV) and international (ZDF) media coverage.
BBC Sport called the FENIX (Friendly European Non-professional Innovative Xenial) Trophy “the Champions League for amateurs,” but Brera isn’t trying to outmuscle that tournament.
The FENIX model should probably be best compared to the Little League World Series (LLWS), which has become big business with about $80 million in assets and a CEO who earns $500K.
Like the LLWS, the FENIX tournament will showcase a few of tomorrow’s stars and the next Kurt Warner story, who went for bagging groceries to quarterbacking a Superbowl champion, which makes for compelling programing. The LLWS finals often draw more viewers than the major league regular season games.
Furthermore, the FENIX Tournament, like the LLWS, takes place when the sports calendar is bare, so the sports networks are desperately trying to fill open programing slots.
ESPN shells out $7.5 million, per year, for the LLWS broadcast rights and is a big winner for both parties. ESPN aired more than 300 LLWS baseball or softball games, last year, and the Little League is now making as much, or more, from major corporate partner sponsorships.
Globally, the Little League has 2.6 million players throughout all age brackets, while the German Football Association, a founding member of both FIFA and UEFA, has more than 6.8 million members in over 25,000 clubs, making the DFB the single largest sports federation in the world.
Germany is just one of 55 national association members of UEFA and many more corporations sponsor football, so, as you can see, the FENIX Trophy tournament is plowing very fertile fields that should produce exponential growth.
This is where it gets interesting for investors, Brera Holdings reported 3.96 million shares outstanding and 3.4M in its float, so if it only attracts $5 million in sponsorships and broadcast rights, while keeping its operating expenses at less than $3 million, we could be looking at better than 50-cents earnings per share and that’s just for the FENIX Trophy.
The closest comparable listing, Madison Square Garden Sports Corp. (NYSE:MSGS), which owns the NHL’s New York Rangers and the NBA’s New York Knicks, and their farm teams, has a P/E Ratio of 120!
Nasdaq approved Brera Holdings to IPO at $5 and they are valuation experts, so today’s prices appear to be significantly discounted and the technical indicators are starting to get very interesting
With the USA hosting the next World Cup, global football and the related investments are sure to demand a premium.
For further information, please visit www.breraholdings.com.