Analysis of

1
Analysis of Juventus FC G. Aicardi, A.
Baldassarre, M. Braga, E. Bruni, L. Nossan, M.
Scalfi
Milan, 15th December 2008
With the support of S. Gussoni, F. Ravizza, A.
Spotorno
With the coordination of Massimo Tallarini
2
Agenda
Juventus Football Club Background Analysis of
financial performances and profitability
drivers Opportunities to be exploited Points of
attention
3
Agenda
Juventus Football Club Background Analysis of
financial performances and profitability
drivers Opportunities to be exploited Points of
attention
4
Juventus Football Club, a quick snapshot

• Market Definition/Positioning
• Juventus is a football team, and more broadly
  speaking is an entertainment company
• Key number
• Fan base in Italy 12.6M supporters (31 of total
  base vs 15 AC Milan)
• Fan base in the World 173M (of which 95M
  India-China)
• 07/08 Tickets sold (avg) 20 900 (ranking 6 for
  Serie A)
• 08/09 Season pass sold 17 200
• Ownership IFIL Investment S.p.a (60) Libyan
  Arab Foreign Investment Company (7.5), Other
  (32.5)
• Main sponsors New Holland, Nike, Sky, Tim,
  Air-one and Birra Moretti
• Current Initiatives
• Participant to Serie A, UEFA Champions League,
  Coppa Italia
• Involved also in social Impact activities
  SantAnna hospital in Turin, Don Boscos
  fundation
• Future planned initiatives
• Approved 100M to build new stadium

Source Press Search, Company web page, Uefa
webpage, Company annual report and Investor
relations
5
"La Vecchia Signora" is a club with a long and
strong tradition ...
Today
1897
10
900s
20
40
50
90
70
00
-Building of a Juventuss property
stadium -development of Hurra Juventus Project
(magazine)
-1905 first success -1906 the president Alfred
Dick leaves the chair
- 1956 Umberto Agnelli, the brother of the
Avvocato became Chair man
- 1923 Agnelli family takes over Edoardo
Agnelli appointed chairman
-1990 Vittorio Caisotti di Chiusano became chair
man - 1994 transformation from sporting to
business society
-2001 Juventus quotata - 2006 Moggiopoli
Juventus with his former administrator Moggi is
involved in trading football games, because of
this Juventus is penalized with the relegation in
serie B
In Turin a group of students founds Juventus Foot
Ball Club
10/06/1915 birth of Hurra Juventus to keep
contacts during the war between the players
-1971 Giampiero Boniperti became chair man
- on July 22 1947 the Avvocato Gianni Agnelli
became Chair man
1905
26
31
32
33
34
50
52
58
60
61
67
72
73
75
77
78
81
82
84
86
95
97
98
02
03
35
Scudetto
Champions League
Source Press Search, Company web page, Team
analysis
6
... but it has faced some troubles due to
Calciopoli scandal
25
Number of sold season passes has declined after
the scandal ...
... and bad press release negatively impressed
the Club perception in the world
season passes ('000)
Gazzetta dello Sport
France Footbal
Calciopoli sanction effect
23.0
17.2
12.7
2008
2007
2006
The New York Times
Sole 24 Ore
Source Press Search, Company web page, Company
annual report
7
The scandal has impacted not only the brand, but
also the financial performances
Revenues show a 17 decrease between 2005/2006
season and 2006/2007 season
The stock exchanges have seen high volatility
/Stock
Big price slump driven by the rumours of
Calciopoli's scandal
Million
2.5
240
Calciopoli sanction effect
229
226
2.0
220
215
208
204
1.5
200
187
1.0
180
0.5
0
0.0
2005
2004
2003
2007
2006
2008
December '05
June '06
December '06
June '07
December '07
Source Company web page, Company annual report
and Investor relations, Yahoo-Finance
8
Agenda
Juventus Football Club Background Analysis of
financial performances and profitability
drivers Opportunities to be exploited Points of
attention
9
The revenues are concentrated in two main areas
TV rights and Champions League royalties
61 of Revenues come from TV rights...
...Champions League royalties can be an
important source of value
Season '06/'07
Million
Million
20 - 65
270 - 235
4-7
40-65
8-10
20-40
204
TV Rights
Sponsor Adv
Players imagine rights
Compe- titions
Other
CL potential bonus
Total
Club
Parte- cipation
First KO round
Quarter
Semi
Final
Total
CL rights potentially representing up to 25 of
Juventus total revenues
1 Amount calculated according to country
league's value, number of club in the federation,
ranking in home league and number of Uefa matches
played in the season
2. Does not include sales of
tickets Note Juventus did not take part to
Champions League in '06/'07 Source Company web
page, Uefa webpage, Company annual report and
Investor relations
10
This concentration is even more evident we
analyze other comparables teams
70
Revenue1 mix compared with key competitors
Revenues FY 2007
227
145
351
290
264
315
195
5
Commercial
Matchday
Overall Italians are too much TV rights dependant
vs. other "that sell more"
Broadcasting
1. Does not include capital gain/losses from
football players rights Source Deloitte
"Football Money League" Report 2008
11
As a result, company's stock pattern is very
sensitive to the outcomes of relevant sport
events
Scudetto Victory 5-05-'02
Champions League 28-05-'03
/stock
/stock
Trading day right after 5th May victory of
Scudetto against Inter
28th May loss of UEFA Champions League against
Milan
3.6
2.6
3.4
2.4
Stock price impacted by unexpected expenses (?
1st 2nd place bonus 5M
3.2
-20
-16
2.2
3.0
2.8
2.0
2.6
15 trading days
15 trading days
15 trading days
15 trading days
Key diversify source of revenues to avoid
volatility on stock
Note Scudetto victory in 5-05'02 came
unexpected Source Yahoo Finance, team analysis
12
Moreover, operating activities are not self
sustainableBottom line results mainly driven by
capital gain/losses from trading activity on
players' rights
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
173.4
218.3
177.1
215.9
229.9
252.7
145.2
186.6
Revenues2 (M)
-190.9
-262.1
-273.7
-234.5
-250.0
-288.8
-175.6
-211.9
Costs3 (M)
EBIT constantly negative revenues are not
enough to sustain the cost structure
-17.5
-43.8
-96.6
-18.6
-20.1
-36.1
-30.4
-25.4
EBIT (M)
18.9
48.9
116.9
0.9
25.6
6.8
37
15
Capital gain and losses from trade of football
players rights key driver of pre-tax income
Capital gain/losses
9.3
4.4
-3.7
-2.3
0.9
-2.3
-2.3
0.8
Other Items1 (M)
Pre-tax Income (M)
Pre-tax income totally unrelated from the
top-line the largest loss takes place the same
year as the largest revenues
10.7
9.5
16.6
-20
6.4
-31.6
4.3
-9.6
Key Juventus shall become less dependant on
such capital gain/losses
1.Includes financial expesenses and revenues,
write off and appraisal, etc. 2. Incudes
sponsors, tv rights, merchandising, sales of
ticket, other 3. Includes DA of player
rights Note numbers don't add up due to
rounding Source Juventus S.P.A. annual reports,
team analysis
13
Trade of players grown in the youngster teams has
become more and more important for bottom-line
results
Backup
Konko Gasbarroni
Lanzafame Nocerino Volpato
Paro Paolucci De Ceglie
Trade of rights from players grown in the "vivaio"
01-02
02-03
03-04
04-05
05-06
06-07
07-08
00-01
Capital gain ( '000)
981
9.802
1.464
3.379
877
2.075
6.087
11.073
Capital losses ( '000)
-
432
432
617
256
221
97
-
Net balance ( '000)
981
9.370
1.032
2.762
621
1.854
5.990
11.073
of total Capital gain/loss
1
8
2
300
2
25
16
73
Juventus has been extracting more value from its
"vivaio" less dependence on "ordinary trade"
Note capital gain and losses from trading of
players who have played in Juventus's youngster
teams for at least 2 years Source Juventus
S.P.A. annual reports, team analysis
14
Agenda
Juventus Football Club Background Analysis of
financial performances and profitability
drivers Opportunities to be exploited Points of
attention
15
A first step is certainly to invest in new
initiatives with lower correlation with sport
performances, such as the stadium
Juve Intro of the new Stadium expectations ...
... compared to the success case Emirates
(Arsenal's Home)

• Facility characteristic
• 1 Field (105 68 mt in size )
• 37 food beverage outlets
• 2500 seats in restaurants
• 13 conference centers
• 65.000 seats

• Facility characteristic
• 1 Field
• 8 Restaurants
• 40.000 seats
• 34.000sqm commercial centre

• Expected impact
• Cost 100M
• Matchday revenues 40M
• Non-core business 30M

12 years contract with Sportfive for name
licensing 6.5M per year

• Investment impact
• Cost 500M
• Revenue in matchday 70.8M
• 35.4M due to non-core football activities

Tot Rev 263.9m 37 previous year
How the facility is structured will allow for
revenues diversification
Note Non core business include Juventus shop,
congress room, etc. Source wikipedia.org
delawarenorth.com eufootball.biz Deloitte
"Football Money League" Report 2008
16
... but also leverage on current core assets, not
fully exploited yet, to find alternative sources
of revenues
Merchandising
Partnership
Sponsors
Other initiatives
Activity

• To increase revenues by capitalizing on brand
  equity

• To ensure long term relationship with performance
  sponsor (steady revenues)

• CRM activities
• Increase loyalty
• Provide 360 experience
• to increase revenues

• To cross fertilize brand through disciplines/arts
  (in entertainment) and acquire new "customers"

Benefits
Best Practice
Not performance partnerships but alternative
partners to be included to increase brand
equity Source Website competitors benchmarking
press search team analysis
17
Agenda
Juventus Football Club Background Analysis of
financial performances and profitability
drivers Opportunities to be exploited Points of
attention
18
In doing so, the Club should pay attention on
market trends and peculiar biz characteristic to
avoid unexpected results
Points of attention
Description
What does that mean?

• Families ? lower expenditures in entertainment
• Sponsors ? less money for advertising
• Stock market ? capitalization

Current Economic Recession

• Lower volume of tickets sold
• Global money important reduction
• Juventus capital decrease

• Increase costs (due to security)
• Collateral damages from security
• The stadium could be a flop!

New Stadium Management

• Management of security/uncertainty for legal
  development
• Real impact on Italian supporters (first example
  ever in Italy ...)

Fan base trends

• Lower volume of tickets sold
• Lower appeal for Serie A products around the
  world

• Fan base cannibalization from other sport
• Premier leagues global supremacy

TV right

• Juventus best revenue source is going to
  decrease
• Less money due to less subscribers for Sky

• Changes in TV rights rules
• Sky TV tax increase

Source Press search, Elusive Fans (Kotler's
book) Team analysis
19
Questions?