Author Topic: EXO.MI - EXOR  (Read 44223 times)

writser

  • Hero Member
  • *****
  • Posts: 1997
Re: EXO.MI - EXOR
« Reply #20 on: June 04, 2013, 01:06:20 PM »
I've been looking at Exor for a bit the past weekend. I like the idea but I still see some problems.

1. For a holding company, why is there a board with 14 Italians who earn 5 mio /year together?
2. Why do they own a football club? Juventus (or any sports club for that matter) is never going to make any significant profits; everything they earn will be used to buy better players. Is this a rational investment?

So what is more important for the Agnelli's? Making money for their minority shareholders or guaranteeing the existence of their family crown jewels (Fiat, Juventus) .. ? Does the discount to NAV nullify this? Any insights would be appreciated.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.


Sportgamma

  • Sr. Member
  • ****
  • Posts: 475
    • Fundamental Finance Playbook
Re: EXO.MI - EXOR
« Reply #21 on: June 04, 2013, 02:21:58 PM »
I've been looking at Exor for a bit the past weekend. I like the idea but I still see some problems.

1. For a holding company, why is there a board with 14 Italians who earn 5 mio /year together?
2. Why do they own a football club? Juventus (or any sports club for that matter) is never going to make any significant profits; everything they earn will be used to buy better players. Is this a rational investment?

So what is more important for the Agnelli's? Making money for their minority shareholders or guaranteeing the existence of their family crown jewels (Fiat, Juventus) .. ? Does the discount to NAV nullify this? Any insights would be appreciated.

I feel like am starting to sound like a salesman here...

1. Agree, might be a bit excessive. However, lets put that into context. In recent years EXOR has reduced holdco cost by 20%, in 2012 total holdco costs stood ad €24.5M. 24.5/NAV of 7,620 (as of end 2012) = 0,32%. How much do Einhorn and Ackman charge for storing capital at NAV*1?
2. I generally agree with you regarding sports clubs. You don´t own a football club to get rich, you own it because you are rich... However, if you look at top50 European football clubs transactional values have been going up steadily (greater fools) as well as revenues. The impact of FFP-regulations on profitability hasn't been felt yet. Juventus is also five years ahead of all other clubs in Italy as they have built their own stadium, which has opened up the possibilities of additional revenue streams (concerts, etc.). The last 5 years have been the equivalent of a 1/100-year-storm, It is a mediocre business, but its worth more then the €200M it trades at...Oh yeah, and they also have a very shrewd director in charge of transfers (http://espnfc.com/blog/_/name/juventus/id/736?cc=5739).

In my mind the question you pose is crystal clear: Elkann (who is now the absolute and undisputed Don of the Agnellis) is a bona fide capital allocator (as opposed to a crown jewel polisher) and I think his behaviour demonstrates that:
1. Make drastic internal changes at OpCos: The will move Fiat Industrial and FIAT headquarters out of Turin.
2. Fight sunk cost bias on dealmaking: The Formula 1 deal was a big thing for me. It met all the criteria they were looking for, except for price. Much time and effort went into that, but they walked away.
3. Fight endowment effect on long term holdings: They held SGS for 13 years and Marchionne is chairman. That did not stop them from selling SGS at a proper valuation.

Thing is, I´ve been hearing this argument about them being a family dynasty, unwilling to let go of their mediocre assets and all that for some time now. In my honest opinion, when you look at the actions taken and the behaviour that management has demonstrated in the last 4-5 years, there isn´t much that backs up that argument.

PlanMaestro

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2182
    • Variant Perceptions

Sportgamma

  • Sr. Member
  • ****
  • Posts: 475
    • Fundamental Finance Playbook
Re: EXO.MI - EXOR
« Reply #23 on: June 11, 2013, 03:18:29 AM »
Quote
Juventus’ spectacular return to form on the pitch in the 2011/12 season saw the Bianconeri win their first Scudetto title since 2002/03, with an unbeaten record unprecedented in a 38-game Serie A season. A €41.5m (27%) increase in revenues to €195.4m has fired them back into the Money League top ten, and after several difficult years, the club looks to have regained its status among the European elite.

The club’s impressive financial performance was driven by increases in matchday and commercial revenue of €20.2m (174%) and €19.4m (36%) respectively. Despite playing four fewer home matches than in the 2010/11 season, matchday revenue almost trebled, from €11.6m to €31.8m (£25.7m), as the club enjoyed the benefits of its new €150m 41,000 capacity Juventus Stadium home. The move from the Stadio Olimpico saw average home league match attendances increase by 13,789 (63%), from 21,966 to 35,755 and average matchday revenue increase from €0.4m to €1.4m per game.

A €41.5m (27%) increase in revenues to €195.4m has fired them back into the Money League top ten, and after several difficult years, the club looks to have regained its status among the European elite.

The club’s impressive financial performance was driven by increases in matchday and commercial revenue of €20.2m (174%) and €19.4m (36%) respectively. Despite playing four fewer home matches than in the 2010/11 season, matchday revenue almost trebled, from €11.6m to €31.8m (£25.7m), as the club enjoyed the benefits of its new €150m 41,000 capacity Juventus Stadium home. The move from the Stadio Olimpico saw average home league match attendances increase by 13,789 (63%), from 21,966 to 35,755 and average matchday revenue increase from €0.4m to €1.4m per game.

The €19.4m (36%) increase in commercial revenue to €73m (£59.1m) was driven by sponsorship bonuses from winning the Serie A title, as well as the increased commercial opportunities provided by the new stadium. Jeep will replace BetClic as the club’s principal shirt sponsor from the 2012/13 season, in a deal worth €35m over three years.

Broadcast revenue increased by €1.9m (2%) to €90.6m (£73.3m), despite the club’s absence from European competition in 2011/12 and resultant lack of UEFA distributions. Broadcast revenue now comprises 47% of total revenue, compared with 57% in 2010/11, although with UEFA distributions from the club’s qualification for the Champions League, this proportion is likely to increase again next year.

The future certainly looks bright for Juventus. The most successful club in the history of Italian football has made another strong start to the 2012/13 season, both domestically and in the Champions League, and has re-assumed its position amongst the top clubs in European football. A successful share issue in December 2011 provided the club with a substantial capital injection, which has been used to invest in the playing squad and youth academy, as well as funding the development of a new training complex adjacent to the Juventus Stadium.

A successful Champions League campaign, coupled with further domestic success, should see the Old Lady consolidate its position in the Money League top ten next year and possibly challenge AC Milan for top ranking among the Italian clubs.

http://www.deloitte.com/assets/Dcom-Azerbaijan/Local%20Assets/Documents/footballmoneyleague2013.pdf

PlanMaestro

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2182
    • Variant Perceptions
Re: EXO.MI - EXOR
« Reply #24 on: June 11, 2013, 08:17:21 AM »


writser

  • Hero Member
  • *****
  • Posts: 1997
Re: EXO.MI - EXOR
« Reply #26 on: June 21, 2013, 01:44:44 PM »
Exor writeup linked to from Valueinvestorsclub: (doesn't seem to contain any special insights)

https://docs.google.com/file/d/0B05tKda-r0CsYUZJcU80ZnRFOWM/edit?usp=sharing
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

Sportgamma

  • Sr. Member
  • ****
  • Posts: 475
    • Fundamental Finance Playbook
Re: EXO.MI - EXOR
« Reply #27 on: June 28, 2013, 10:11:55 AM »
Coincidentally:

RCS Mediagroup capital increase
"Italian carmaker Fiat said on Friday it will almost double its stake in RCS Mediagroup, the publisher of influential Italian daily Corriere della Sera, to 20.1 percent after a capital increase that ends next week."
http://www.reuters.com/article/2013/06/28/us-fiat-rcsmediagroup-idUSBRE95R0TW20130628?feedType=RSS&feedName=innovationNews&rpc=43

News Corp Spinoff
"The publishing spinoff includes News Corp's newspapers including The Wall Street Journal and The Times in London, a cable network and pay-TV provider in Australia, book publisher HarperCollins and fledgling education company, Amplify.

The company named current directors Lachlan Murdoch and James Murdoch to the board of the new News Corp. New additions to the board include Thomson; Ana Paula Pessoa, a partner at Brunswick Group; John Elkann, head of Exor SpA ; and Masroor Siddiqui, head of investment firm Naya Management."
http://www.reuters.com/article/2013/05/24/newscorp-spinoff-idUSL2N0E50LG20130524

And of course, then there is The Economist
http://www.economistgroup.com/results_and_governance/board.html

Sportgamma

  • Sr. Member
  • ****
  • Posts: 475
    • Fundamental Finance Playbook
Re: EXO.MI - EXOR
« Reply #28 on: July 01, 2013, 04:24:27 AM »
When in Rome...

Quote
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/427165c2-dbfa-11e2-a861-00144feab7de.html#ixzz2XnAYOrj0

“We are branding Rome. Football teams in Italy traded on revenues and a certain amount of ego. We didn’t do this for ego,” says Mr Pallotta, who reckons that if Manchester United is worth some $3.9bn and Roma is currently valued at less than $200m, then “there is a lot of opportunity to bridge that chasm”.
Lossmaking Roma was sold in 2011 by the indebted Sensi family for a rock bottom €70.3m to a US consortium led by Thomas DiBenedetto, president of the investment management firm Boston International Group, which took a 67 per cent stake. UniCredit, exposed to the Sensi’s family’s debt, was left with a minority stake it hopes to reduce, while less than 15 per cent is owned by small stakeholders, many of them fans, with shares quoted on the Milan bourse.
Last season Mr Pallotta increased his personal stake to “close to one-third or more” and became chairman. His Boston–based Raptor Group, which includes a scaled-down hedge fund and owns the Boston Celtics basketball team, has a majority overall.
“My guess is a lot of people with deep pockets would love to have Roma,” says Mr Pallotta, who disclosed that the group intends to raise new capital of at least $75m, with US bank Morgan Stanley acting as adviser.
In terms of marketing, Mr Pallotta feels he is starting from zero, with Italian clubs far behind their foreign rivals.
“We are trying to bring a lot of professionalism to the club, using the best practices of US sports teams which are arguably as good as anyone’s. Before we came there was no social media. Zero. The previous owners did nothing, forget about Facebook or Twitter. There was no fan management system at all,” says Mr Pallotta.
The club, which has signed sponsorship deals with Nike and Disney, is following the experience of the Boston Celtics which have gone ticketless, with spectators using mobile phones to access the stadium, meaning Roma will build a database on its supporters.
In the US the group is working on smartphone systems to allow fans to order snacks which are then delivered to their seats. “People will order substantially more if they don’t have to leave their seat. Hopefully in the new stadium we will use a lot of this technology,” says Mr Pallotta.
The new premises will also have more control over security, with plans to adopt facial recognition technology to identify the fans behind the racist chanting that has already cost the club a fine of €50,000.
The club has adopted a new logo – to the anger of some fans – which was presented in St Peter’s Square, along with a Boston Celtics shirt, to Pope Francis, a keen football fan, in a media coup.
Profitability is going to be a long haul and will take more than a papal blessing, however.

Full article: http://www.ft.com/intl/cms/s/0/427165c2-dbfa-11e2-a861-00144feab7de.html#axzz2Xn8mjhSW

plato1976

  • Hero Member
  • *****
  • Posts: 638
Re: EXO.MI - EXOR
« Reply #29 on: July 16, 2013, 09:43:20 AM »
I bought some exor
I feel it has a few catalyts ahead:
1. fiat industry valuation may get higher after the merge
2. possible fiat / chrysler merge ahead
to me it's a more conservative way to play fiat group, although the upside may be less than buying fiaty itself.

When in Rome...

Quote
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/427165c2-dbfa-11e2-a861-00144feab7de.html#ixzz2XnAYOrj0

“We are branding Rome. Football teams in Italy traded on revenues and a certain amount of ego. We didn’t do this for ego,” says Mr Pallotta, who reckons that if Manchester United is worth some $3.9bn and Roma is currently valued at less than $200m, then “there is a lot of opportunity to bridge that chasm”.
Lossmaking Roma was sold in 2011 by the indebted Sensi family for a rock bottom €70.3m to a US consortium led by Thomas DiBenedetto, president of the investment management firm Boston International Group, which took a 67 per cent stake. UniCredit, exposed to the Sensi’s family’s debt, was left with a minority stake it hopes to reduce, while less than 15 per cent is owned by small stakeholders, many of them fans, with shares quoted on the Milan bourse.
Last season Mr Pallotta increased his personal stake to “close to one-third or more” and became chairman. His Boston–based Raptor Group, which includes a scaled-down hedge fund and owns the Boston Celtics basketball team, has a majority overall.
“My guess is a lot of people with deep pockets would love to have Roma,” says Mr Pallotta, who disclosed that the group intends to raise new capital of at least $75m, with US bank Morgan Stanley acting as adviser.
In terms of marketing, Mr Pallotta feels he is starting from zero, with Italian clubs far behind their foreign rivals.
“We are trying to bring a lot of professionalism to the club, using the best practices of US sports teams which are arguably as good as anyone’s. Before we came there was no social media. Zero. The previous owners did nothing, forget about Facebook or Twitter. There was no fan management system at all,” says Mr Pallotta.
The club, which has signed sponsorship deals with Nike and Disney, is following the experience of the Boston Celtics which have gone ticketless, with spectators using mobile phones to access the stadium, meaning Roma will build a database on its supporters.
In the US the group is working on smartphone systems to allow fans to order snacks which are then delivered to their seats. “People will order substantially more if they don’t have to leave their seat. Hopefully in the new stadium we will use a lot of this technology,” says Mr Pallotta.
The new premises will also have more control over security, with plans to adopt facial recognition technology to identify the fans behind the racist chanting that has already cost the club a fine of €50,000.
The club has adopted a new logo – to the anger of some fans – which was presented in St Peter’s Square, along with a Boston Celtics shirt, to Pope Francis, a keen football fan, in a media coup.
Profitability is going to be a long haul and will take more than a papal blessing, however.

Full article: http://www.ft.com/intl/cms/s/0/427165c2-dbfa-11e2-a861-00144feab7de.html#axzz2Xn8mjhSW