Lyons 1st Ligue 1 club to go public

[argh1]

Ligue 1 changed it's rules last year banning publicly traded clubs.

Any idea if this will be good or bad in France? I think it'll help.

http://news.bbc.co.uk/2/hi/business/6347375.stm

[Free kick]

I dont know what the rationale is in Europe about going public. One of the main advantage for any business to go public is to raise capital or more specifically, to increase your possible sources of new Capital. Need to raise 1 billion dollars to open to open some new plants or to invest in a new product? Well thats what the capital markets are for since you could raise 1 Billion in the mks through an IPO ( initial public offering) of new stock.

But Soccer teams aren't that kind of business. What do you need to raise capital for if you are a sports club? Your annual expenditures are budgetted for in the first place and your growth is limited to your market size or niche. Plus in going public means opening your books to the public. The only possible reason that I can think of is that, Unlike North america, there is a greater scracity of people with big money willing to invest in these kind of ventures so going public is just another way to entice multiple investors and groups which, on their own, would not be willing to undertake the risk and exposure. Or perhaps their not big enough.

[Canuck Oranje]

The issue of private vs. public is an ongoing issue. Each has its advantages and disadvantages. Free Kick points out some key ones.

I would say that the right or wrong structure depends on the specific circumstances around the club. For example, it could be that many of the club members are getting older and are looking to cash out or it could be that a club is wishing to build or buy its own stadium or some other reason. When a company goes public, it also has to file a public offering statement (prospectus). In it, the club will need to supply much of the reasons for why it is going public as well as why it would be a good investment for an investor. If someone is interested and wanted to find it, I am sure Lyon's prospectus/offering statement is posted somewhere.

On a side note, if you have institutional investors in your club, it really doesn't matter much whether your private or public because they will hold your feet to the fire either way. MLSE faces that issue with Ontario Teachers Pension Plan.

[Free kick]

This is an interesting topic for discussion. I am not 100% sure about the chain of events that unfolded after Harold Ballards death but I think that MLSE became public by accident if you will. It fell on the lap of someone who didnt have the capital and then it changed hands a few time.

Anyways, athough I never have checked their perspectus or even their annual report, I somehow doubt that one would be able to decipher the true financial picture of, say, specifically the hockey team. They have pretty wide and broad holdings that extend to: other sports properties, entertainment ventures, arenas, real estate development etc etc...

Whereas my understanding of European soccer clubs that have gone public, is that their operations are not as diversified. Thus if you buy stock for Lazio, for example, your investment will ride on the performance of the club. As purely an investor, why would I want to invest in that? Unless, perhaps they are more diversified than I thought.

Regardless, the NY Yankees seem to be extremely successfull, yet they are not publicly traded. What about the NFL teams? None as far as know.

Another possible explanation. Unike people in North America or the far east, European investors ( aside from the british ) are not as sophisticated when it comes to equity investments. We have far more of our savings tied up in stocks than Europeans. The markets in places like Paris, Milan, and Frankfurt are no where near as liquid as those in London , New York, Tokyo and Hong Kong. Perhaps sentimentality rather true investment value drives alot more of the buying and selling decisons in Europe .

[Canuck Oranje]

MLSE is now a private company but the majority of stock is owned by Teachers so you probably won't find published financials.

Having read the article after making my last post, it appears Lyon wants to build a stadium.

quote:Originally posted by Free kick

This is an interesting topic for discussion. I am not 100% sure about the chain of events that unfolded after Harold Ballards death but I think that MLSE became public by accident if you will. It fell on the lap of someone who didnt have the capital and then it changed hands a few time.

Anyways, athough I never have checked their perspectus or even their annual report, I somehow doubt that one would be able to decipher the true financial picture of, say, specifically the hockey team. They have pretty wide and broad holdings that extend to: other sports properties, entertainment ventures, arenas, real estate development etc etc...

Whereas my understanding of European soccer clubs that have gone public, is that their operations are not as diversified. Thus if you buy stock for Lazio, for example, your investment will ride on the performance of the club. As purely an investor, why would I want to invest in that? Unless, perhaps they are more diversified than I thought.

Regardless, the NY Yankees seem to be extremely successfull, yet they are not publicly traded. What about the NFL teams? None as far as know.

Another possible explanation. Unike people in North America or the far east, European investors ( aside from the british ) are not as sophisticated when it comes to equity investments. We have far more of our savings tied up in stocks than Europeans. The markets in places like Paris, Milan, and Frankfurt are no where near as liquid as those in London , New York, Tokyo and Hong Kong. Perhaps sentimentality rather true investment value drives alot more of the buying and selling decisons in Europe .