Sports franchises: smell like team spirit Premium

The business proves minor league stuff compared with other industries

The business of sport takes off! Half of China owns a LA Lakers jersey! For all the hype, however, the reality is that sport compared with other industries is tiny and somewhat sickly.

The combined big five soccer leagues in Europe made €8bn in revenues last year, estimates Deloitte – less than Marks & Spencer. The biggest listed soccer teams remain microcaps.

Ditto Stateside. The headline grabbing $400m Platinum Equity supposedly paid for the Detroit Pistons this month is equivalent in size to Stein Mart, 468th in the S&P 600 small cap index. (And the retailer makes 10 times the revenues.) Sports profitability is worse. Why? Wages. Incredibly, the market cap of Juventus FC is only 30 times the annual salary of its best paid player. Goldman Sachs’s market cap is 5,000 times its boss’s last pay packet.

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