“As the year progressed the performance of our media companies improved,” said Train. This, he added, has helped offset some stagnation from some of his consumer holdings such as Diageo, Heineken and Unilever.
“Disney and Reed Elsevier led the way and more recently Pearson’s share price has performed well,” said Train. “We were particularly interested to note the huge increase in the value of the TV rights for the UEFA Champions and Europa Leagues at double the existing contract as a result of the aggressive bidding from BT Sports.”
BT paid £897m for the three year contract to trump BSkyB’s bid, a coup for BT in its ambition to lure loyal sports customers to its network.
“BT believe sports content of this quality and following is the only content that will persuade viewers to switch suppliers, which is what BT require if they are to make a success of their investment in sports,” said Train.
“Media analysts decry the crazy price paid, but who is to say it’s too much? There has been a history of such pronouncements at every other time a record price has been paid for football rights in the last five years.”
Train owns four companies in the fund with direct ownership of sports rights, which together make up around 5% of the portfolio: football clubs Celtic and Juventus, plus International Speedway and the largest, World Wrestling Entertainment (WWE).
“WWE is the exception because it is not strictly a sport – it’s entertainment with sporting like characteristics. I doubt there is any read across from the large price that BT has paid for UEFA rights, but independently WWE has almost doubled in price year to date,” Train said.
