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Partnering with Real Madrid, Eastern Sports Club aims for listing

By SCMP, editing by Yutang Sports Wednesday, 15 Jul 2015 12:00

Buoyed by Eastern’s new partnership with Real Madrid, ambitious boss Peter Leung Shou-chi has set a goal few sports clubs in the world can attain – a stock-exchange listing.

Acknowledging the idea would be “unrealistic to some”, Leung said he wanted to set targets outside of winning soccer titles.

But the financial reality is Eastern would first have to break even – the soccer team suffered a multi-million dollar loss last season – then show a positive cash flow of at least HK$20 million in aggregate for two financial years before being able to list. That most basic of GEM listings also requires a market cap of HK$100 million.

A main board listing is even more stringent, with profits of at least HK$50 million in the last three financial years, including at least HK$20 million in the most recent year, plus a market cap of HK$200 million.

Leung admitted the club was losing money but is hoping their joint venture with Spanish giants Real Madrid will signal a change in their fortunes and build a foundation for a future listing.

“We know some people may say this is unrealistic as investment in Hong Kong sports can never make a profit to fulfil listed company requirements,” said Leung. “But it is always important to set a target so we can work towards it and be successful.

“It will never happen if we don’t try and we hope our results in the upcoming season can be the first step towards our goal.

“We are working with Real Madrid in setting up soccer and basketball schools in Hong Kong and that will generate income,” said Leung, who is also in charge of the basketball section. “They are a top brand in both events and should have little problem in making profit.”

Eastern’s basketball team will become the first fully professional team next season with an investment of over HK$10 million.

Although Leung refused to disclose their soccer budget for next season, it is believed they will spend HK$20 million on a 26-strong squad.

Tags: Real Madrid


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