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Some fly and some fall in stock market's... Some fly and some fall in stock market's... Some fly and some fall in stock market's... Some fly and some fall in stock market's... Some fly and some fall in stock market's... The casualties of October '9... Impasse in battle for labour market refo... Moulding the future of SA busines... Some fly and some fall in stock market's... Kaizer Chiefs may bring soccer to the tr... |
Kaizer Chiefs may bring soccer to the trading floor
SA's richest soccer club could inject a popular touch to the market, writes SOYA MAGIDA
Kaizer Chiefs founder and managing director Kaizer Motaung said no decision had yet been taken. "But we have been approached by a number of stockbrokers and we continue to pursue discussions on the matter," he said in a statement this week. Chiefs would be the first SA soccer club to list on the exchange, a trend well established in the , UK where several clubsincluding Manchester United, Aston Villa and Newcastle United, are listed on the London Stock Exchange. Italian glamour side AC Milan last month became the first continental club to announce listing plans. Chiefs could be the first sporting body to offer shares to fans, depending on the pace with which the SA Rugby Football Union is pursuing plans for a flotation. According to Abdool Hamid, a director of Equity Auditors, accountants to Chiefs, leading executives of the club have indicated they would give up some of their shares to loyal supporters, if the listing went ahead. Hamid said Motaung had approached his firm to draft a business plan for the club. Hamid says Chiefs generates taxed profit of about R5-million a year, which would qualify it for a listing. Turnover is estimated at R45million, consisting of sponsorship from sportswear manufacturer Reebok and oil company Total, gate takings, sales of club merchandise and club membership fees. Reebok Sportswear derives more income from its sponsorship of Kaizer Chiefs than it does from its backing of the Natal Rugby Union. Chiefs have their own store in the Carlton Centre. Chiefs' assets include the club's R10-million base in Naturena, which is south of Johannesburg. Hamid estimates that the current Chiefs squad is valued at "millions of rands" following the addition of Bafana Bafana maestro Doctor Khumalo and former international players such as Sizwe Motaung and Ace Khuse. Chiefs leads the Premier Soccer League in attendance figures. Louis Tshakoane, the club's public relations officer, said more than 400 000 spectators watched 17 local games by the Amakhosi last season - an average of more than 23 000 a game. JSE stockbrokers said a listing by Chiefs would add a popular touch to the market. David Shapiro, director at Société Générale Frankel Pollak, said while it was difficult to make an assessment without the club's profit history, "it could be a very interesting listing which could benefit from its novelty value". The listing could boost the club's international profile and bring more black investors to the share market. It could also be risky - an injury to a top player could easily hurt the share price. The forays by English clubs onto the stock market have generally been successful and Manchester United is one of the highest-rated stocks on the market. United's capitalisation has rocketed from an initial £38-million in 1991 to about £500-million recently and is rated on a price:earnings ratio of 35. This rating comes amid some impressive results in the year to end-June 1997, when pre-tax profit more than doubled to £27.6-million on a turnover of £87.9-million. It remains the world's most profitable club and is building on its success by launching, among other projects, its own TV station. The boom prompted a rush to the London market earlier this year. Five more English clubs were floated for a total of £425-million, led by Newcastle United (£193-million) and Aston Villa (£126-million). Newcastle United's prospectus showed a loss of £24-million - having spent £28-million on buying players - on turnover of £42-million, yet the market valued the star-studded club at nearly £210-million. The valuation slid substantially, however, as the club failed in a bid for glory.
News of the early retirement of Manchester United star Eric Cantona in May was greeted with dismay by his fans, and with a £4-million reduction in the soccer club's capitalisation. Sunderland's share suffered a similar fate after the club lost the relegation battle and was dropped to the first division in mid-year. Analysts are now generally taking a more sober look at the football sector.
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