Research Market strategy
By Swissquote Analysts
Themes Trading

Big clubs make the game

By Vincent MIVELAZ
Published on

Related theme

As the market continues its recovery, things are looking up for sports fans and the large-scale event supply-chain. The head honchos of the premium sports clubs certainly weren’t resting on their laurels during the market hibernation. Rather, they spent the downtime structuring innovative ways to promote their businesses, and increase exposure for the game and its major sponsors.

The most prominent proposal to date was the Super League initiative: a transformation of European football. Touted with the tagline of ‘The best clubs. The best players. Every week’, the plan was short, sharp and super-effective, with a laser-focus on quality over quantity, simultaneously reducing the number of games and increasing revenue.

Following backlash from fans and cries of cannibalisation from prominent figures, this particular iteration is unlikely to come to fruition, but the plans are alive and well. Though the project is now on stand-by, the support is tangible: JP Morgan proffered the Super League a bankroll of $4.8 billion, UEFA responded with a proposed $7 billion to revamp European football’s existing structure.

It’s now inevitable that the face of European football will change, and whatever shape it takes will be highly beneficial for sports investors and major sponsors. Coca Cola, for example, is highly dependent on revenues from large-scale sporting events and primed to recover from the hit it has taken with lock-downs and low economic activity pummeling its away-from-home non-alcoholic consumption revenue. Following a new iteration of European football is likely to increase the power-brand’s market exposure.

Despite the recurring revenue cuts taken during the pandemic, football club values are up a combined 30% according to Forbes. This shows the strength of conviction of investors that a new tomorrow is being forged, with exciting games in the pipeline and massive potential returns in the midterm.