Juventus
    Juventus
      24.10.2019 15:00 - in: Events S

      Andrea Agnelli’s speech to Shareholders

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      The club president opened proceedings at the 2019 Juventus Shareholders' Meeting, held today at Allianz Stadium

      Good morning everyone and welcome to our annual meeting.

      Before beginning proceedings, here is a short video on Juventus. 

      This video provides an honest reflection of what Juventus has strived to become in recent years and must be a starting point and something to provide inspiration, as we push towards ourgoals for the coming years.

      In February of this year, we announced the placement of a non-convertible bond loan for €175 million, with the aim of providing the club with financial resources for its operations,as well as optimising the structure and maturities of its debt. Today, in addition to asking you to approve the financial statements for the year ended 30 June 2019, we will ask youthe shareholders to approve a capital increase of €300 million, entirely dedicated to the development plan for the 2019/2020financial years and up to 2023/2024, which seeks primarily to ensure our competitiveness on a sporting level, to increase our operating revenues, to boost the visibility of the Juventus brand in international markets, and help consolidate oureconomic-financial balance.

      In Italy, a €175 million bond loan and €300 million capital increase have provoked astonishment at the scale of resources demanded of the bond market and shareholders. However, our benchmark should never be solely and exclusively Italy, but rather the big European clubs. We can look at examples of steps taken by our competitors, who represent our benchmark on an international level on the bond and capital markets; Manchester United, in the last four or five years, has raised some £450m from shareholders. If we look at the bond market, Real Madrid raised around €600 million in March 2019, while Tottenham Hotspur have recently refinanced a debt with a £500 million bond issue. In recent years Manchester United has issued bonds worth around €1 billion. These are the bond market and capital market figures that have been recorded in our industry. We must not make the mistake of comparing Italian entities to what is our true reference market: Europe. We can say it with pride: Juventus is biggest football club in Italy but only one of the biggest on the European stage. 

      One figure that does not necessarily reflect the true valuation of clubs, but which our industry looks at carefully, is their level of turnover. When we look at the leading clubs in Germany, England and Spain – so Borussia Dortmund, Manchester United, Bayern Munich, Barcelona and Real Madrid – we see that their turnover ranges from €489 million at Borussia Dortmund to almost €1 billion made this year by Barcelona. These are the clubs that should be our benchmark.

      We should be extremely proud of our growth and development. Nonetheless, our current level of turnover,excluding player transfers, stands at around €500 million; that is the level of turnover at Real Madrid when I took over as club president at Juventus back in 2010. It is clear that thegrowth rate we have achieved has been superior to that of Real Madrid; we have gone from some €170 million up to €500 million at present, while Real Madrid have improved their turnover from €500 million to €750 million. So, our turnover has more than doubled, while that of Real Madrid has grown by only 50%. There is still a gap, however, which we clearly need to bridge. 

      We need to keep up with our European competitors, our benchmarks, and the reality around us. If we are to keep up, we need to consolidate our management approach, which has helped us achieve extraordinary results in recent years. Our management process is based on division of responsibility across three specific areas, managed and led by Fabio Paratici, Marco Re and Giorgio Ricci. Fabio Paratici is at the helm of the sports area, and we must not forget that sports is our main area of operation – it is about the team that takes to the field. Nonetheless, this area of activity is heavily influenced by the results achieved in the other two areas: the investment and management capacity of the entire company, as well as the costs of the services that operate within Juventus, all of whichfall under the responsibility of Marco Re; and finally, the ability to generate the resources to invest in the team, and make sure it remains competitive in Italy and on the European level, which is the responsibility of Giorgio Ricci.

      Before looking ahead, let's take a glance at our recent past. From 2010 to 2019, we have seen our turnover increase from €172 million in the 2010/2011 season to €621 million this season. The growth in turnover, which has allowed the club’s plans to be implemented, has also had a significant impact in terms of employment in the local area. Few companies in Italyhave hired as much as us in recent years: from the 2010/2011 season to the 2018/2019 season, the number of Juventus employees has increased from 85 to 258, taking the total workforce, including athletes and technical staff, to 885 people.

      In terms of the value of our club, on 30 June 2010 Juventus’ market capitalisation was €162 million. On 30 June 2019, it was €1.47 billion – and our current value is similar to this. That means that over the course of the last nine years, we’re created more than €1.2 billion in value. 

      And of course I must underline our on-field achievements, of which we have to be extremely proud. I want to reserve a special mention for the only two players who have participate in all eight consecutive Scudetto wins – captain Giorgio Chiellini and Andrea Barzagli – and for the contribution of Max Allegri, who played a key role in the progression of Juventus.

      On top of the Scudetto titles, we have won four Coppa Italias and two Italian Super Cups, as well as reaching the Champions League final on two occasions and consistently reaching the quarter-final stage of that competition. These achievements position Juventus among the top teams in Europe, as illustrated by our rise from 43rd position in the UEFA ranking in 2010 to fifth – and there are reasonable grounds to suggest that we could overtake Bayern Munich at the end of this season and climb to fourth.

      However, this period has not been without some highly complex situations – situations that have further strengthened the leadership group at the club. Take, for example, the task of coordinating the first team during the six-month period in which our coach was banned due to the football betting scandal in 2012. On many occasions, Pavel, Fabio and I have asked ourselves what other club would have been able to negotiate six months without a head coach in the dug-out. It was an experience that undoubtedly strengthened our senior management. There was also the “Alto Piemonte” investigation into the infiltration of the ‘ndrangheta into ultras groups and the FIGC investigation that followed, the Anti-Mafia Commission and the “Last Banner”investigation into alleged extorsion against Juventus. Naturally, these were demanding periods for all at the club.

      Looking back at this period, I have to remind you all that the club has invested – directly and indirectly – around €400 million in real-estate development: €180 million on the stadium, as well as further investment for the new headquarters, JTC, J-Medical and the club stores. Around €100 million has been invested through the J-Village fund, €90 million for the commercial area on the east side and around €16 million to improve Vinovo and the surrounding area. It all means that your club has invested around €400 million to develop its assets. I also want to stress the courage we showed in January 2017 when we unveiled the new Juventus logo. It was met with initial scepticism, but now the senior management teams of other clubs are recognising the bravery we showed in launching a new logo to help us tackle future challenge and acknowledging the value of it. When it was launched, the logo was described in a way that I feel is wholly appropriate: “The new identity captures the essence of the Juventus aesthetic and incorporates it into the sleek lines of an iconic, simple logo. It is a bold, uncompromising approach which goes against the traditional rulebook of the football industry.” That’s what we managed to do – and now we’re getting the credit for that.

      We’ve expanded our professional football sector to include the women’s football area, which is expertly led by the best Italian women’s football director there is. Stefano Braghin has built a hugely impressive organisation, and although Juventus Women aren’t yet professionals, they are managed as such – so for me they are part of our expanded professional sector. In the two years since the team’s creation, Juventus Women have won two back-to-back Scudetto titles as well as one Coppa Italia. Their coach, Rita Guarino, deserves huge credit. We want to wish them the best of luck from all of us here ahead of the Italian Super Cup final on Sunday: let’s hope they can bring home another piece of silverware for the club.

      The expansion of the professional sector continued last year with the creation of the U23 team and a comprehensive reorganisation of the competitive sector. Federico Cherubini has played a key role in the development of the sports area and is showing great knowledge, wisdom and commitment in taking a whole range of steps that – while perhaps less visible than other activities – are vitally important to the development of the club. 

      Last season, we were successful in bringing the best player in the world – Cristiano Ronaldo – to the club. I hope that he is awarded the Ballon d’Or this season: he deserves it on account of everything he has achieved here.

      We’ve become the fifth-biggest club in the world in terms of the number of followers we have on digital platforms – and we could soon climb to fourth. We have 90 million followers and average monthly engagement of around 1.2 billion interactions. We’ve become the fourth-biggest club in terms of European fanbase and our global support numbers over 400 million people.

      Also worthy of mentions are the public opening of J-Hotel in September, the launch of club stores in Milan and Rome last season and the opening of our offices in Hong Kong, which will allow us to secure further growth in that part of the world. 

      There are important achievements of which we should be proud. Yet they are all things that have happened in the past, and we cannot build our future by living in the past – except by identifying any mistakes we have made in order to keep progressing.

      We operate in a highly complex industry. And though we have some extraordinary strengths, we also harbour weaknesses which should give us cause for reflection for the future. Our strengths are illustrated by the incessant growth of the sector: in the last year alone, the industry has grown by 5%, with the top five leagues – which monopolise the global football industry – recording growth of 16%. In turn, those top five leagues are monopolised by a small group of 10, 12, 15 clubs, which have grown by 7%. Over 50% of the growth of the big clubs derives from their commercial areas, and this – combined with the radical changes occurring within the industry – places us in a situation of disintermediation. Thankfully, we are moving away from the excessive dependence on intermediation as regards our revenues – specifically the dependence on television rights revenues. These continue to play a role of great importance, but this year commercial revenues are exceeding domestic television rights revenues. 

      It means that domestic television rights account for around 20% of our revenue, while for clubs outside of the European elite, television rights continue to account for between 40% and 60% of their total revenue. These results bode well for our future.

      Yet there are also some weaknesses, such as the management of the handful of clubs that are dominating both global growth in the industry and – as a consequence – results on the pitch. Think of the monopoly of Bayern Munich in German, of the monopoly Juventus in Italy – something we’re immensely proud – and of the duopoly of Real Madrid and Barcelona in Spain. These sequences of sporting results are generating great tension within the various leagues and this must lead us to reflect on how future competitions are managed and what the overall aims are.

      There are also a number of threats that we need to consider. In Europe, there is an anti-piracy campaign underway which must lead us to reflect. The CEO ofbeIN Sports has said: “From now on, we will no longer treat television rights as exclusive rights.” The loss of exclusivity of sports rights means the loss of a large part of their value. We must take stock of European television viewing figures: in the last five years, viewing figures among the 12-34 years bracket have fallen by 40%. It shows that football as a product – in the way that it’s being produced and distributed at the current time – is currently more suitable for people over the age of 35.

      One such threat is the world of eSports, which must in fact be turned into an opportunity. One stat stands out: in 2017, the final of League of Legends, one of the leading eSports games, attracted 58 million spectators. And the numbers are constantly growing. Traditional sports are on a downward trend among younger age groups, while new forms of entertainment – including eSports – are experiencing strong growth. We must reflect on these developments.  

      Yet there are not just threats, but opportunities too. As I was saying, the fact that television rights have become only our third-biggest revenue stream shows that we are moving towards a model of disintermediation. This means that we are once again the owners of our own content and of the way in which we interact with the end consumer, without the need for intermediaries. In this regard, digital activities must be used strategically and could become a killer application, but only if this is rolled out globally. Therefore, it’s vital that we maintain our global approach while we wait to identify – or for industry to identify – the tools necessary to allow us to make a big step forward in terms of the generation of revenue through digital applications. 

      As part of our focus on the new generations, we’ve initiated studies that will allow us to gain a better understanding of Millennials and Generation Z. If we find that they are more attracted by other activities, it is on these areas that we must concentrate. The young people of today are very well informed and when they choose an activity as their main focus, they follow is extremely closely. We’re seeing a proliferation of OTT platforms, which in turn leads to more widespread distribution – we must be a part of that. FIGC yesterday announced the launch of a platform on Team Vision, which followed the announcement of the creation of UEFA TV six months ago. We must show ourselves to be capable of seizing the opportunities that the market offers us in the coming months and years.

      Another opportunity is undoubtedly represented by women’s football. One great positive was the decision to host what we dubbed the Première here at Allianz Stadium: the first match played by our women’s team at the stadium, which was sold out for the game. Around the same time, Atletico Madrid’s women’s side sold out the Wanda Metropolitano and a fantastic Women’s World Cup further increased the focus on women’s football. As the women’s game begins to engage with new markets and new consumers, it presents opportunities that we must be ready to take advantage of in the next few years. 

      As a result, as well as asking you to approve the financial statement, we are also asking you for a capital increase to be entirely dedicated to pursuing the club’s opportunities. 

      We must have a vision. With the plan we approved in 2014, our intention was to turn Juventus into a global brand. In my opinion, we have achieved that: today, Juventus is a global brand. That has to be our vision: our new plan must allow Juventus to prosper as a global brand, one recognised by stakeholders, fans and future generations as modern, innovative and iconic.

      If that is our vision, our mission must remain the same: a mission with sport at its heart. Over the coming years, we must maintain our sporting dominance in Italy and – as we have done in recent seasons – compete at the highest level in Europe while consolidating our economic and financial results.

      The main objectives of the plan are: to participate in the Champions League every year and to maintain the current UEFA coefficient; to remain among the top 12 clubs in Europe in terms of revenue, which is no easy task given the value of domestic and international rights in the Premier League; to ensure that the wages of playing and coaching staff are equal to between 55% and 60% of operational revenues; and, as a club, to help to reposition Serie A on the global market.

      We must view 2019, 2020, this season, this assembly, as a new year zero for Juventus. It is time to think big.

      The aim of the capital increase we submitted to this assembly in 2011 was to help the club to recover, a process that has clearly been completed. The club is fully capitalised, both in terms of its real-estate assets and in terms of the value of the first-team squad, which are the two main sources of value on our balance sheet.

      The aim of the 2019 capital increase is to enable the future development of the club in the long term, to strengthen our net worth and investment position and to ensure that all Financial Fair Play regulations are adhered to.

      We therefore ask you to approve the financial statement to 30 June 2019 and restate your confidence in this leadership group, so that together we can reach new heights.

      Thank you and Fino Alla Fine.

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