Football clubs, films, and live e-commerce, the business models of these industries are actually relatively poor, but it is difficult for football clubs to make profits every year, and superstar remuneration accounts for a large share;film, the actor takes the lion's share;Live e-commerce relies heavily on super anchors, resulting in entanglements between anchors and platforms. The turmoil in Oriental Selection is no exception.
Contributing author of this journal Lin Songli.
From the perspective of investment returns, investors must be confused about a sub-industry: football clubs. The confusion lies in the fact that football clubs are largely unprofitable, but their value has risen year on year, and there is no sign of being mispriced.
This phenomenon is not limited to football clubs, but also exists in video and live streaming e-commerce, and their business models have something in common.
The superstar takes the lion's head
Manchester United Football Club, it is the most successful football club in the last ten years, if not the last few decades. However, Manchester United has only made a slight profit in 2019 in the past five years, and the rest of the years have basically been losses. Not only is it a loss, but it also has to invest huge capital expenditure every year. Over the past few years, United's liabilities have increased by £500 to 600 million, and these capital expenditures will eventually turn into even bigger losses on the income statement.
But in the past decade, Manchester United's market value has not **, but has roughly doubled compared to a decade ago. Since Manchester United's market value was high ten years ago, Manchester United's market value increase is the smallest among Premier League clubs. And the Wolves team that Guo Guangchang bought in 2016 may have increased in value tenfold. But this investment is far less than ten times, because in the next six or seven years, Guo Guangchang needs to invest a lot. Although Manchester United is not profitable, its market value is currently as high as $3 billion, and in the case of double the premium, the major shareholders are still unwilling to ** Manchester United.
That year, Zhang Jindong also bought Italy's Inter Milan football team. In fact, Italian football is in decline, and the Premier League has been on the rise due to legal management and other reasons. But Rao is so, if Zhang Jindong is willing to ** Inter Milan Football Club, he can still make a lot of money, from the book point of view, the ** price of less than 300 million euros that year, and now it is not small to sell 1.5 billion euros.
Football clubs, although they need to invest money every year, are a bottomless pit, but the market value has been rising, which is understandable, because it is a big toy for the rich. Some billionaires, such as Warren Buffett, donate 99% of their wealth to charity after their deathsSome wealthy people who love football, ** a club, are also returning wealth to society in disguise - provided that you have the ability to continue to invest money. With the wealth of the rich increasing, and the football club is so limited, the ** can only rise.
Football clubs such as the Premier League and Serie A and La Liga need to invest huge amounts of capital every year, but it is extremely difficult to make a profit, is inseparable from the strange characteristics of the sport: the club's superstars take a considerable part of the profits, so much so that it looks like the entire club and fans are working for a few superstars. Needless to say, Messi's annual salary is so high that David Beckham's Miami International Football Club can't afford it (all other clubs have to share a portion of Messi's salary, based on Messi's arrival in the American Soccer League, and everyone benefits). And the other clubs have agreed).
Like Manchester City Football Club, De Bruyne and Haaland both have annual salaries of up to 20 million pounds, and the salary expenses of players alone exceed 400 million pounds a year. In addition to salaries, there are also transfer fees, signing fees, and bonuses for players. Like Haaland, I'm afraid he will take around £50 million a year from the club. The club's total revenue in a year is only £700 million.
Another industry that is very similar to football clubs is film, where actors are paid and often take most of the box office revenue. After all, there are only a few movies that are popular at the box office, and considering that most of the films are extremely poor at the box office, investing in filming movies is really the same as investing in a football club. The production cost of a film, sometimes due to the invitation of superstars to join, the salary can account for more than 80% of the production cost. If the film can be successful, it will only recoup a pitiful return.
These two sub-sectors can be classified as the worst business models from an investment perspective.
Live streaming e-commerce relies heavily on super anchors
The live broadcast selling industry, as a new subdivision of the industry, although it has not been studied much, is very similar to the characteristics of the above industries, when the market value of Dongfang Selection rushed to more than 70 billion yuan, the market is likely to be wrong. Now the market value of Dongfang Selection has fallen to less than 30 billion yuan, even so, in the long run, the market may still be very wrong.
No matter how much valuation the market gives, from an investment point of view, the value is very low, based on three main points.
First, the competition in the selling industry is too fierce, and the business model is really terrible.
Live streaming of goods, on the side, it can be seen that the industry of selling goods is really a frightening bad business model - the competition is so fierce that the business is getting bigger and bigger, but it is getting more and more difficult to make money.
From the earliest supermarkets and shopping malls and other hypermarkets, home appliance hypermarkets and various supermarket chains with Suning as the industry's first, they have been closed down by e-commerce in just over a decade. Foreign businessmen Metro and Carrefour withdrew from China in total annihilation;And Walmart, even if it is not closed, is mostly for the purpose of cooperating with Sam's Club. The rise of e-commerce Ali soon encountered its competitor JD.com, and JD.com was followed by Pinduoduo, only five or six years later, and its market value has surpassed Alibaba. However, it's not over yet, live streaming sales such as Douyin, and communities such as Meituan** and flash sales, have to take away some market share from them.
Second, the business model of live streaming is even worse.
Recently, there is a ** of Yu Minhong circulating, the content is that Yu Minhong told about a famous lecturer in his New Oriental back then, and asked Yu Minhong to pay him 1 4 of his operating income as a salary. Yu Minhong could only agree, but at the same time immediately train a teacher to replace him. When Yu Minhong told about this past, he was still a little frightened. But live streaming is a hundred times worse than this.
As mentioned earlier, Beckham invited Messi to join, but the club could not pay such a huge salary and demanded that other clubs also share it. In fact, in addition to Messi, Neymar, Haaland, and even quasi-first-class players such as Sancho and Foden, who have never heard of ordinary people, have salaries of tens of millions of pounds.
The same is true for the superstars in the production of the film, so it is a few Disney cartoons that bring huge profits to the company, because the cartoons save a lot of money from the movie stars' salaries.
And the super anchor's share will only be more!Ordinary super anchors, such as Li Jiaqi, ask for 1 4 of the amount sold, which is quite small. It's normal to take a third. Super anchors like Li Jiaqi and Dong Yuhui are actually all employees of the company working for them - they want to take most of the profits.
Of course, you can also not invite super anchors like Li Jiaqi and Dong Yuhui, so the company's live broadcast sales can sell 1.8 billion yuan a year, which is amazing.
The influence of an excellent anchor can be so great that "without a certain anchor, the company cannot operate normally"?Yes. This is an important feature of the live streaming industry. I believe that Yu Minhong has recognized this after the turmoil in the Oriental selection.
The anchor is the most important part, anyone can replace it, but the anchor cannot. The incident reflects the important position of live streaming in the current market, and the decisive guiding role of top anchors in a platform. And in the short ** era, of course, it is rare for super anchors to have such influence, unless their personal abilities are very outstanding.
Outstanding ability is not enough, among so many excellent teachers in New Oriental, if Yu Minhong replaces Dong Yuhui and cultivates him, can he become a live broadcast close to Dong Yuhui's influence?It's too hard unless you're particularly lucky. Even Dong Yuhui has a great element of luck - he drifts north from the grassroots, and has a simplicity that has not been worn away, and when he first appeared, he suddenly resonated and became an Internet celebrity.
The third is that Dongfang selects self-built or cooperates with a third party to build a first-class chain and launch a variety of products, which is really not optimistic. Does Dongfang Selection have such ability?Almost all of these products are extremely competitive. Due to the direct B to C, at present, the gross profit margin of selling goods through live broadcast is very high, close to 50%. But how competitive will these products be in the future?
The development process of NetEase Yanxuan at that time is worth reference for investors. NetEase Yanxuan is the first entrepreneur in China to start this model: looking for manufacturers who OEM for international brands, and let it play the new trademark of NetEase Yanxuan. In the first few years, it was a multiple-fold growth, but it suddenly came to an abrupt end. Why?Because the competition to join soon became fierce - the competition for selling goods was very fierce all of a sudden. Almost every product it sells, it's all highly competitive. Soon, each manufacturer had to find a manufacturer to process it and put it in its own live broadcast roomThe same goes for pasta, and beef balls have long been available everywhere. As of the end of June, there are already 130 self-operated products, and management is also a huge problem. This is completely different from the previous New Oriental education.
Almost no consumers care whether it is a self-built factory or a third-party factory, and consumers recognize Dong Yuhui as the anchor.
For an investor, starting from rationality, this kind of company that relies heavily on super anchors, super anchors should take most of the profits, and this kind of company with an extremely bad business model must be excluded from its own ** pool.