Sports

SAC’s Steve Cohen may be the A-Rod of Wall Street

6 Aug 2013

Like the Yankees slugger, the hedge fund boss faces sanctions for alleged use of an illegal “edge.” It’s unclear that either broke arguably fuzzy rules. And trying to level their respective playing fields may be futile. Ultimately, baseball and Wall Street are bigger than both.

Football cleanup won’t hit goal with fans offside

25 Jun 2013

Yet another scandal is shaking up European football. Italian authorities are investigating 41 clubs on suspicion of tax fraud and money laundering. The case highlights the sport’s poor governance and questionable integrity. Unfortunately supporters may not care that much.

Soccer success mirrors Germany’s secret strengths

24 May 2013

For the first time ever, both teams in Europe’s biggest championship will be German. In 2000, the country was the sick man of the pitch. The sport’s resurgence, like the economic renaissance, relied on the social market economy and the ability to push through structural reforms.

Man Utd about to discover Fergie’s true worth

8 May 2013

The reign of its most successful manager went hand-in-hand with the club’s financial rise. Alex Ferguson’s retirement removes the architect of its footballing triumphs. Fans and investors will now find out whether Manchester United’s value rests on the manager - or the business.

Busted sale shows sports not immune to gravity

14 Mar 2013

A ballyhooed effort to sell billionaire Philip Anschutz’s entertainment empire collapsed after the price tag implausibly stretched toward $10 bln. The exuberance followed lofty valuations for the L.A. Dodgers and soccer’s Man U. Even celebrity-driven markets have breaking points.

Soccer’s betting scam has echoes of Libor scandal

5 Feb 2013

Rigging the sports fixtures is like manipulating interest rates: both require collusion, are hard to detect, and were partly orchestrated in Singapore. Both also undermine confidence. In finance, the solution is to rely less on human judgment. Soccer cannot do away with referees.

Real Madrid’s money-league triumph has rotten base

25 Jan 2013

Soccer’s revenue league shows this is the decade of the $1-billion-a-year club. Leader Real Madrid could break that barrier by 2016, at current growth rates. But unequal TV deals play a big part in the team’s triumph. The loser is Spanish football - both on and off the pitch.

Disney chief’s unlikely fairy godfather: Murdoch

21 Nov 2012

With News Corp snapping up a piece of the Yankees TV network, Bob Iger’s battle with Rupert Murdoch is becoming more intense. But News Corp’s rich price for the deal implies a punchy valuation for Disney’s much-coveted ESPN. That could make the whole Magic Kingdom worth more.

Baseball is due to face a financial curveball

20 Nov 2012

Rupert Murdoch is buying into the New York Yankees cable network at a Ruthian EBITDA multiple. Player salaries and ticket prices have surged at triple the rate of inflation over 20 years while franchise values are at 42 times operating income. These diamonds aren’t forever.

Bayern’s profits shine in fickle football economy

19 Nov 2012

The German Bundesliga team’s steady profit stands in stark contrast to the exuberant irrationality that is the rule in European football. Other teams, as well as real-world managers or bankers, could learn a few things from the world’s most financially successful team.

Big scores inspire participation in sports M&A

20 Sep 2012

Billionaire Philip Anschutz is shopping an empire that includes the Stanley Cup champs, the NBA’s Lakers and David Beckham’s U.S. soccer club. After the eye-popping $2.2 bln Dodgers sale price and Manchester United’s IPO, it’s no wonder if owners get off the sidelines.

Soros backing could lift Manchester United

21 Aug 2012

The soccer club’s U.S. float was panned for leaving the Glazer family firmly in control - and for missing their lofty goals on value. But George Soros’s emergence as a major shareholder could lift sentiment. Despite his $20 bln fortune, Soros is not a typical trophy investor.

Italians railroad China’s PLA on soccer pitch

2 Aug 2012

How else to explain an investment in Inter Milan by China Railway Construction, a state group with origins in the People’s Liberation Army? Bragging rights are limited and industrial rationale non-existent. At best it’s a quid pro quo for the contract to build Inter’s new stadium.

Olympics a bad metaphor for economic rivalry

2 Aug 2012

China breaks the rules, the U.S. loses its edge, Britain barely registers at all. It’s easy to see the Games as a mirror for reality. But economics is different. Co-operation is rewarded, the prizes keep growing, and there are many ways to win, provided the competitors play fair.

Man Utd counts on investors behaving like fanatics

2 Aug 2012

The English soccer club’s supporters expect nothing but success. That ethos carries over to Manchester United’s IPO, which seeks to value the enterprise at an optimistic 22 times EBITDA. Though Man Utd fans are rarely disappointed, buyers of the stock at the mooted price will be.

As steel’s lure fades China searches for gold

31 Jul 2012

Steel production was once a leading sign of industrial competence for developing economies. China bought into that story, but now the country’s huge steel industry is a drag. Olympic gold is another sign of greatness. In that domain, China still has a long way to go.

Olympics feel good value, even if they aren’t

27 Jul 2012

The world may gloat at London’s mishaps. And for the over-extended UK, the economic wisdom of spending $14 billion on the Games is uncertain at best. Yet British spirits are high. Olympic investment is paying dividends, even if they aren’t strictly financial.

Scottish soccer’s own goal sets example for banks

13 Jul 2012

Glasgow’s Rangers soccer club wasn’t too big to fail - the Scottish Premier League ejected it for reckless financial behaviour. The authorities must now choose how far down to relegate the side. Like financial regulators, they should fight hard against moral hazard.

Euro cup boost could be brief for triumphant Spain

2 Jul 2012

The country’s soccer triumph over Italy provides some welcome relief in the economic gloom. It shores up Spain’s image when it is at its lowest ebb, due to the country’s euro travails. But if history is any guide, the boost from this victory will be short-lived.

Man U’s New York listing crowns race to the bottom

25 Jun 2012

Most of the $24 bln raised by the 21 top U.S. IPOs this year consisted of shares with lousy voting rights. Greater leeway for poor governance in the Big Apple rather than Americans going gaga for the sport is likely to be the greater driver of the UK soccer club’s market debut.