Shocks & Stares » Football http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Euro 2012: Fifa vs. Moody’s http://blogs.hillandknowlton.com/shocksandstares/2012/02/euro-2012-fifa-vs-moodys/ http://blogs.hillandknowlton.com/shocksandstares/2012/02/euro-2012-fifa-vs-moodys/#comments Thu, 16 Feb 2012 17:10:12 +0000 nwoods http://blogs.hillandknowlton.com/shocksandstares/?p=541 It’s 2012, another year in which I can gorge upon a feast of world class sport. The Olympics, the Paralympics, the European Championships and god forbid another failed attempt by Andy Murray to win Wimbledon. The UK may be nearing a ratings agency downgrade but it’s not all bad and a glorious summer awaits.

I wonder what it’s like working in the City when a major sporting event is on. With targets to hit, demanding clients, every pound and every move under scrutiny, I bet they never get chance to scream “REF!!!!” across the trading floor.

Euro 2012 kicks off in 2012 but with ECB research showing inattentive trading during national football matches what impact for the Eurozone? (Image:Euro2012media.com)

Interesting then, that according to the latest bit of research from the European Central Bank, that’s exactly what happens. Its White Paper “The pitch rather than the pit – Investor inattention during FIFA world cup matches” looks at trading data during 2010 World Cup matches and draws some interesting conclusions. My favourite excerpts from the three key findings include:

First, we find strong evidence of decreased activity in stock markets during soccer matches at the 2010 World Cup. Trading activity dropped markedly, especially if the national team was one of the competitors. Compared to normal market circumstances, the median number of trades dropped by 45% if the national team was playing, while the volume dropped by around 55%.”

“Second, we show how goals scored by either team led to an even stronger decline in the number of trades and offered quotes. Also, we find that market activity was already significantly below the benchmark right before the match started, and continued to be lower during the 45 minutes after the match had ended”

 “Third, we show that also price formation was affected during the soccer matches, as the evolution of returns on national markets decoupled from those on global markets.”

Worrying stuff indeed! We all know that lots of research points to the financial benefits of hosting a major sporting event such as the Olympics or World Cup but does this latest study suggest a potential economic threat caused by investor inattention? With the European Championships scheduled for this summer could we finally see sport play a major role in shaping the Eurozone’s economic future?

Whats even more interesting is if you take the official FIFA rankings of those countries qualified (hence their likelihood of progressing further in the competition) and compare this with their respective credit rating:

Country  FIFA Ranking Moodys Credit Rating
Spain 1st A3
Germany 2nd Aaa
Netherlands 3rd Aaa
England 5th Aaa
Portugal 6th Ba3
Italy 8th A3
Croatia 9th Baa3
Denmark 10th Aaa
Russia 13th Baa1
Greece 14th Ca
France 17th Aaa
Sweden 18th Aaa
Republic of Ireland 20th Ba1
Czech Republic 29th A1
Ukraine 59th B2
Poland 70th A2

 

The above analysis not only raises conspiracy theories around the UK Government’s involvement in the appointment of Fabio Capello and hence its relatively robust economic rating but it also points to  potential problem for the PIGS, who’s traders according to form are likely to be inattentive for longer. With this in mind should any of the PIGS nations live up to their footballing prowess we could see the Eurozone put under even greater pressure.

Either way, I’m sure that having undoubtedly read the ECB’s latest research in great detail, both Merkel and Sarkozy will be praying that we don’t get a re-run of 2004. A Greece vs. Portugal final could be catastrophic!

]]>
http://blogs.hillandknowlton.com/shocksandstares/2012/02/euro-2012-fifa-vs-moodys/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-18/ http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-18/#comments Fri, 02 Sep 2011 17:32:25 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=267 Hello All! A little late this week, and we apologise for that, but as it’s now officially the end of summer that means it’s the start of the business season and we’ve all been a little flat out here at H&K Towers. Still, we wouldn’t want to miss out on reporting another busy week in the world of financial and professional services. And what a week it’s been. Thanks to our contributors this week: Ed, Ross, Clare and Rachel.

Turn that frown upside down…At the end of a pretty crazy August, there have been some fairly gut-wrenching figures this week from the Markit/CIPS Purchasing Managers Index (one of our clients). Declines in manufacturing output prompted fresh talk of double-dip recession, construction continued to be weighed down by weak confidence in the housing market, and all eyes are now on the all-important Services PMI which comes out on Monday.

Happy faces are hard to come by in the UK at the moment. But are we talking ourselves down too much?

Worrying indeed, but could it be that the UK economy is going through stage four of what could be termed ‘post financial crisis bereavement’ (PFCB)? According to one description, this involves ‘a feeling of listlessness and tiredness’ and possibly ‘wandering around in a daze.’

Well it certainly does feel like that sometimes but if the theory holds at least this is the final stage before acceptance sets in and the economy ‘regains its energy and goals for the future.’  It may just be the time for a bit of Vince Cable style positive thinking.

Breaking News – Football clubs spend less…The last minute wheeler-dealing of transfer deadline day was interesting for many reasons. But it’s the debate it has started about financial fair play which poses the biggest question for the future of the beautiful game. We’ve commented before on the ownership of football clubs, particularly in the immediate future. The onset of the Financial Fair Play from UEFA, requiring elite clubs to record a maximum debt of £39.5m over a three year period, may also have implications.

Fernando Torres may be the last £50m player we see for a while

Michel Platini, champion of these new regulations, would argue otherwise, but the financial future of football could go one of two ways. Clubs will either find loopholes in the rules and splash out enormous sums of money for overpriced talent. Or the rules will re-establish a sense of financial realism and build a future for football based on financial sustainability. The more prudent approach from England’s top clubs in the latest transfer window is a hopeful start. Ultimately however, the path football decides to take will come down to UEFA’s refereeing of the clubs who fall foul.

Women and Pay – the fight goes on…All things being well, Clare’s imaginary great granddaughter will be assured a pay packet that is on a par with her male counterparts, according to research published by the Chartered Management Institute this week. Some might call that progress. But we don’t.

There still aren't enough women in boardrooms (Image: Able & How)

It is forty one years since the Equal Pay Act. The Act prohibits employers from favouring one sex over the other in terms of pay and conditions. Whilst some things have improved in the past four decades, many others have not. Men still earn, on average, nearly a third more than women doing the same job. This, quite frankly, is ridiculous.

Over the past couple of months, the issue of women in the workplace has been an ongoing topic, particularly following Lord Davies’ inquiry into the dominance of men in company boardrooms. Whilst we think it is great this topic is being addressed, why is it employers still think that they can treat 50% of their workforce in such a manner? And the conclusion Clare has come to is this: they can, because they can get away with it. Is there another Act in British history that has been allowed to be so flagrantly ignored?

What then is the answer? Implementation! Transparency! Mobilisation! Anyone want to join the revolution? Please note – it might take us another 98 years to get anywhere near what we want…

Britain’s place in Europe…Ross wrote two weeks ago about the detrimental impact politics and politicians are having on the global economy and investor confidence. He was particularly critical of Angela Merkel as she seemed to be avoiding the glaringly obvious: Germany has to underwrite the debts of those struggling in the Eurozone and be prepared to commit much more to the European Financial Stability Facility (EFSF) for it to be taken seriously.

Credit where credit is due, Chancellor Merkel seems to be winning over enough parliamentarians in order to squeeze a bill through the Bundestag that will give German parliamentarians more of a say on the EFSF. By giving the Bundestag more of a say on future aid packages Ms Merkel is hoping to bridge the domestic and international problem she faces by merging the two. She is currently having to overcome domestic political pressures as the German electorate resent the fact that they should have to pay for the problems of others in distance places like Greece.

Should the Bundestag gain these powers, Germany’s economic dominance in Europe is likely to sore further. On the one hand, this may finally be the security the Eurozone needs, but on the other it may push the UK even further to the periphery. So far the UK Prime Minister David Cameron has kept the UK out of the Eurozone crisis, but by doing so Germany may be able to cement its position as the true leader of Europe.

Good Week/Bad Week…Two sides of the banking coin this week. For Vince Cable, champion bank-basher, scorned scourge of Rupert Murdoch, and Parliamentary stand-up it wasn’t a particularly good week. He’s been banging the drum on banking reform for several months now, but it seems as though the Independent Banking Commission’s recommendations are firmly on route to the long grass.

On the flip side, for bankers, and particularly those with both retail and investment arms, it was a relatively good week for the very same reason. Their lobbying effort has been long, hard and expensive, but with the likes of the CBI and BCC now on-board, it looks like it might be paying off. It wasn’t all good for the banks this week though – Alastair Darling’s forthcoming book launch looks set to drag them through the muddy playing fields again in a few weeks time.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/09/fps-friday-fiver-18/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/08/fps-friday-fiver-16/ http://blogs.hillandknowlton.com/shocksandstares/2011/08/fps-friday-fiver-16/#comments Fri, 19 Aug 2011 15:39:30 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=256 Hello All! August really isn’t showing any sign of slowing down is it? At the start of the week there was a collective pause for breath, but since Wednesday it’s been a case of deja vu with the world’s markets continuing to do their best impression of the Pepsi Max Big One. The focus of the Friday Fiver this week is understandably on these events, but we also find time for a bit of sporting action too. Thanks to Ed, Ross, Jonathan and new writer Helen this week.

Wither Angela, Woe Nicolas…..Tuesday’s summit between Angela Merkel and Nicolas Sarkozy was their latest attempt to tackle the Eurozone’s woes. However, no matter what they do to try and convince markets otherwise, politicians both sides of the Atlantic are still failing to win over investors’ confidence.

It's not all hugs and smiles in the Eurozone anymore - another tough week for Merkel & Sarkozy

Does democracy have any culpability for this? Well yes, it does. Merkel is finding it increasingly difficult to win domestic support for the continued underwriting of Eurozone debt – Germany’s latest growth figures won’t help her cause here either. She knows that the electorate are less likely to vote for a Chancellor who uses German money to bail out other nations, than one who does not. Despite this, the Eurozone’s survival largely depends on German financial commitment.

The recent debacle in the US over their debt ceiling and subsequent ratings downgrade was another prime example of politics trumping the good of the nation. Make no mistake, this episode was driven primarily by party political point scoring with the Presidential election around the corner – the Republican’s are already calling it the ‘Obama downgrade’.

With politicians at the helm the economic situation seems to be worsening. However, what they seem to ignore is that voters often reward politicians who show strong leadership and make bold decisions that solve difficult problems. The current status quo – a lack of leadership and an unwillingness to meet the problem head on – means that no-one wins, including politicians seeking re-election and investors craving market stability.

Big retailers in small communities…..According to the BRC, over the past week in particular we’ve seen how closely retailers are connected to their neighbourhoods. Really? This seems a curious statement given it was precisely those in the neighbourhood who smashed in their windows. For Ed, the lasting image of the riots were people walking out of JD Sports with a new pair of trainers. This is a nationwide retail outfit with a turnover of £770m. That’s a different proposition to an independent butchers or clothes store, which we’d associate much more with community.

Independent retailers face a tough task rebuilding from the riots

As neatly summarised in the Independent on Sunday: “Supermarkets are cheap and efficient. They stabilise quality and increase choice. They have transformed shopping, but this comes at a cost…The counterpoint to this has been the drastic decline of neighbourhood shops. We have reached a tipping point where the increased expansion of supermarkets will do more harm than good.”

Most agree that our high street retailers need as much help and support as they can get, especially after the riots. They are fundamental to the economy – which is why David Cameron has asked Mary Portas to lead a review into how to revive the high street. But let’s not kid ourselves about the role the big boys play in the local community. Rather, celebrate and revive the independent stores that do.

There’s more than one Olympic Games next Summer…..Awe-inspiring to spend time this week with Paralympics legends past, present and future just ahead of one year to go to the London 2012 Paralympic Games. We were lucky enough to pop into the Paralympic simulation training camp at Bath University with an eager group of national media all clamouring for a word with 11-times Paralympic gold medal winner Tanni Grey-Thompson and other assembled Paralympic royalty, including the inimitable 9 times gold medal-decorated Lee Pearson.

Humbled doesn’t really cover it when you hear stories of bright young talent including Will Bayley, current world number two table tennis player who trains for six hours a day, every day and gave a up a promising acting career after time at the Brit School for his sport; or the Paralympic swimmer Kate Grey who told her story of meeting another athlete with one arm who taught her a great lesson in life: how to put your earrings in one-handed. Helen for one will be among the first in line to bid for tickets come the start of the process on September 9th.

Good Week/Bad Week…..A bad week for US/China relations as chaos erupted in a supposedly friendly basketball match between Georgetown University and the Bayi Rockets. The contest, which was organised to coincide with Vice President Biden’s visit to China saw players brawling on scratchy camcorder replays of the scene.

It would be an inappropriate stretch to link the on-pitch animosity to the tension between the two nations. However, it’s the latest in a string of public spats between the two superpowers. Friction between the two countries is predominantly a result of economic realities – Jonathan insists you click HERE for a better explanation by dancing pandas. Let’s hope they keep the squabbles on the sports field.

No, the Chinese player's foot didn't slip in this picture, he really is going straight for the American's 'in-goal' area (Image: Interbasket.net)

Our good week award goes to tech entrepreneurs and their shareholders. In a deal likely to have significant repercussions for the mobile industry, cash rich Google snapped up Motorola for $12.5bn in the company’s quest for patents and an edge in mobile. It’s been a busy week and today we have seen one of Britain’s most successful start-ups, Autonomy, acquired by HP in a takeover worth £6.7bn.

And finally, the field of dreams…..or rather, the plastic, indoor sweaty sports hall of dreams. Last night the Financial & Professional Services team took on our arch H&K rivals, the Sports team in a winner takes all 5-a-side match at London Bridge’s T47. The result was convincing – a 13-6 win for us moneyheads. Sitting just round the corner from them today has been an unrivalled joy it has to be said.

On a more serious note, T47 is due to close soon which is a great shame. Finding a good football pitch for hire in central London is already difficult. It just got even harder.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/08/fps-friday-fiver-16/feed/ 1
Man Utd’s IPO: A paradox to fans’ ambitions http://blogs.hillandknowlton.com/shocksandstares/2011/08/man-utd%e2%80%99s-ipo-a-paradox-to-fans%e2%80%99-ambitions/ http://blogs.hillandknowlton.com/shocksandstares/2011/08/man-utd%e2%80%99s-ipo-a-paradox-to-fans%e2%80%99-ambitions/#comments Thu, 18 Aug 2011 16:49:56 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=249

Man Utd’s application to list on the Singapore Stock Exchange and make available 30% of the club to Asian investors is a paradox to efforts from fans and parliament alike to see local supporters have a greater say in the direction of their football club.

It is also confirmation of the global reach of those few clubs at the pinnacle of world football and serves as a reminder to the debts they’re carrying, the dizzying sums they spend and despite all this, the sheer force of their brands.

At its heart, the IPO is a symbol for the increasing monetisation of football. The beautiful game has become a beautiful business, or as is more often the case, a burden, on wealthy individuals willing to take the ultimate gamble.

The joke used to be that Man United have more fans in London than they do in Manchester, it now seems they have more fans in the Far-East than they do in the UK. The FT on Wednesday suggested of Man United’s 333m global fan base, 190m come from Asia. That an audience in the Far-East is predicted to have the potential to impose a higher valuation of a football club in Manchester is both testament to the Red Devils’ Asian appeal and the emerging power of the Asian economy, particularly in contrast to Europe.

The Culture, Media and Sport Commons Select Committee’s recent report into football governance called on the FA to look at means of giving properly constituted supporters trusts, or consortia which include supporters trusts, an opportunity to make a successful matching bid for a club that has gone into administration. Admittedly, Man United is not in this position, in spite of its mega debts, but whilst the ambitions of the Government, and I suspect most fans would be to have a greater say in the running of their club, the current crop of football owners have other ideas.

The float in Singapore seems to make business sense for the owners, which is increasingly what football decisions are coming down to. It will no doubt be accompanied by major marketing efforts to tap into United’s growing Asian fan base.

It does seem a shame however that the Red Knights and those on the terraces in the gold and green scarves will not get a more direct opportunity to buy a stake in their club and that this will serve as the model for football ownership in the immediate future.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/08/man-utd%e2%80%99s-ipo-a-paradox-to-fans%e2%80%99-ambitions/feed/ 0
FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-3/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-3/#comments Fri, 15 Apr 2011 17:24:07 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=79 Nearly the weekend. First, here is this week’s Friday Fiver…

Thanks to DC, Daisy, Rachel and Nick for contributions.

Is the economy looking up?…

Economic figures this week were better than predicted, but is this just a pause for breath before the storm?

Here’s a question for you. If GDP growth is so flat (or even in reverse as it was last winter), then how can it be that unemployment fell according to the latest figures? Wednesday’s announcement from the ONS stated that total unemployment was down from 8% to 7.8%. Here’s another question for you as well. If global commodity price rises (particularly food and oil) are showing no sign of slowing down, then how can it be that inflation fell against most predictions according to the latest figures? The ONS’ figures on Tuesday recorded a drop in the Consumer Price Index from 4.4% in February to just 4.0% in March.

So what’s going on? Well, the fall in unemployment was definitely welcome, but it may be shortlived. The reason for this is the continued fear that new jobs created in the private sector may not be able to keep up with the large redundancies likely being made in the public sector as the government trims spending – it’s a bit like pouring water into a bucket at the top, and it flowing out through holes in the bottom; the problem is, we can’t pour water in fast enough.

And on inflation? Well, it turns out that we can thank retailers, and especially supermarkets, for the slight fall in inflation. According to the ONS, the level of discounting by shops is at an all time high as they try to maintain the flow of customers in through their doors (this might explain why my local Co-op has been running a 50% off wine promotion almost non-stop since Christmas). The question is, how long will these promotions continue to entice consumers? Especially when growth in wages continues to lag behind inflation, reducing the amount of disposable income we have to spend on the high street.

AV your say…

It’s not been a good week for the No to AV campaign with a survey revealing nearly half of the electorate supports the alternative voting system.  The controversial ad campaign warning us that if we vote Yes soldiers and babies will die or, according to Baroness Warsi, make us complicit in the rise of British nationalism, hasn’t deterred 45% from saying they would vote Yes.

Perhaps they should have opted for the slightly cuddlier celeb approach like the Yes campaign whose leaflet proudly lists off celeb supporters including Tony Robinson, Joanna Lumley, Eddie Izzard, Colin Firth and Stephen Fry. Their involvement in politics may be limited, but something they did has worked if 2,199 voters now put the Yes campaign 12 points ahead of the No camp.

Of course if you are in the No camp you won’t believe these results anyway and will view any survey produced by the Yes supporting think tank the Institute of Public Policy Research (IPPR) with immense suspicion. Or you could use the comically Blytonesque phrase ‘dodgy shenanigans’ to sully the Yes campaigns’ reputation as Mr Osborne did this week- accusing them of receiving more than £15m in contracts from the public purse.  And so the mudslinging continues in what has already been an acrimonious debate (sigh) only three weeks to go!

Journalists follow journalists on twitter. But What do they say?…

Two great infographics. Both covered by the Guardian’s datablog. The first was developed by Tony Hirst showing journalists’ following habits on twitter. The infographic indicates journalists tend to prioritise following their colleagues within the same news outlets.

And secondly, Tweetminster have teamed up with the Guardian to produce this infographic on what the UK Media tends to talk about. All fairly intuitive, but it’s interesting to see it broken down.

Above all else we think they both look great.

What price £ducation?…

In those halcyon days pre 1998, going to Uni seemed so much simpler. No tuition fees, plus those lovely maintenance grants you could blow, unwisely, in the union bar. Fast forward to this week and government adviser Professor Theresa Rees labelled as ‘barking’, the system where what you have to pay for your university degree will depend not only on where you study but also which part of the UK you’re from due to differences in devolved funding decisions.

The Department for Business, Innovation & Skills stepped into the fray on Thursday announcing that higher education students attending 83 of their approved ‘alternative providers’ can now borrow up to £6,000 toward the cost of their tuition fees, in an attempt to boost competition.  This is unlikely to leave the mainstream unis quaking in their boots however, with many willing and able to charge the maximum of £27,000 for a three year undergraduate course (bursaries for the under-privileged aside). Given the overwhelming demand for places at these universities, it will take much bigger market forces to make them more self-conscious about their pricing.

When football club owners go offside…


Sometimes you have to feel a little bit sorry for football managers. Whilst the financial rewards are undoubtedly pretty big, so too are the egos of many of your players, the pressures from unrealistic expectant fans and the chances of stress related heart disease. It’s a tough job at the best of times but in an era of billionaire owners is it becoming even more difficult?

Carlo Ancelotti cut a pretty lonely figure on the touchline during Chelsea’s disappointing performance at Old Trafford this week. You’d think he’d be happy given the fantasy football transfer strategy of Roman Abramovich but it seems that increasingly top managers are having to deal as much with boardroom tactics as they are the opposition’s. Like any group of businessmen, this merry band of football club owners is driven by return on investment and throughout many of their careers they’ve a history of calling the shots and generating success.

However investing in sport is arguably a little bit different. Firstly owners, except in the rarest of circumstances, don’t have the underlying knowledge or experience of their respective team managers. Success is to some extent out of their hands and as a result there must be implicit trust in the owner/manager relationship. Each must understand their role and when boundaries get crossed performance is likely to be compromised.

As in many situations, too many cooks can spoil a broth and when owners start interfering in team selection and tactics even the seemingly most appealing of jobs can slowly begin to look like a poisoned chalice.

I’d imagine the majority of football club owners would be less than receptive to allowing their manager to advise them on what stocks or shares to buy or which emerging market might be best suited to their latest investment strategy. Knowing the strengths and weaknesses of both yourself and your workforce is a fundamental in business and the Roman Abramovich’s of this world could do with a bit of reminder.

]]>
http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-3/feed/ 0