Description

Ollamani (AGUILCPO MM) (referred to in this writeup as AGUIL) is a sports/casino operator recently spun out of Televisa, virtually unknown to investors given almost no public filings with significant upside (both on a NAV and free cash flow basis) to 100 pesos or 175% upside on 9x 2027 free cash flow (first normalized year). 

What’s so interesting about this business are the multiples ways to win on earnings power compared to the low valuation and stability of current earnings. Converting to USD here in the preamble; on a $320m market cap, gaming alone generates $50m in operating income and if they were to double the number of casinos (more later), this number doubles. US broadcast rights alone for the Club America soccer team are $12m (for one of the most watched teams in the US) which could go significantly higher with an Amazon or Apple deal. These options are on top of the earnings power we lay out below that shows the stock trades at 9x current PE. 

We also believe Emilio Azcarraga Jean has been in the market buying stock puked by Televisa US ADR holders hence the usual spin dynamics have not held up but supports the significant long-term upside value. 

We will try and make this writeup detailed with overviews of each business and our modelling assumptions given the few filings and no sellside research.

Ollamani is comprised of the following segments: 

1. Soccer Business: Ollamani owns Club América, the professional soccer team considered one of the most popular teams in Mexico and that has won 14 championships in Mexico

2. Azteca Stadium: Ollamani owns and operates the Azteca Stadium, which is the largest stadium in Mexico in terms of capacity and a leading venue for large events

3. Gaming and Sweepstakes Business: under the “PlayCity” brand, Ollamani operates 18 casinos in Mexico with food and beverage service, as well as a website offering online sports betting and casino gaming

4. Publishing and Print Media Distribution Business: Ollamani owns Editorial Televisa and Intermex, which are leading publishing and print media distribution business in Mexico

(1) Club America and its affiliates

Club América participates in the first division of the Mexican soccer league currently known as Liga BBVA MX, and AGUIL also owns Club América Femenil, a professional soccer team that participates in the first division of the Mexican women’s soccer league, Liga MX Femenil. The men’s team plays its home games at the Azteca Stadium and the women’s team plays most of its games in the CFA facilities. Club América has the most championship wins of any team in the history of the tournaments organized by the Federación Mexicana de Futbol Asociación, A.C., with 14 championships. 

List of Titles 

Fan Base/Social Media Following

Club América has approximately 23 million followers on its social media (Facebook, Instagram, X, YouTube), making it the team with the most followers not only in Mexico but in all of CONCACAF. It is also the team with the third most followers in Latin America. Nielsen analysis in 2019 also estimates that Club América has a fan base of more than 30 million fans in Mexico and more than 10 million fans in the United States and they have an average audience of 8.1 million per game, larger than all other teams in Mexico and the United States. 

Junior/Women’s Team

Similar to publicly traded BVB, Club America has a junior team that develops players from which Raúl Jiménez, Diego Reyes, Diego Laínez, Edson Álvarez, Sebastián Córdova have all come. CFA also has a women’s team, which participates in Liga MX Femenil and has won the championship in the 2018 and 2023 Apertura Tournaments. The women’s team holds the record in Liga MX Femenil for attendance, 58,000 people for the first leg final of the 2023 Apertura Tournament and more than 5 million viewers in the broadcast of the finals. 

US Presence

Televisa has disclosed that Liga Mx is the most popular and most watched soccer league in the United States, better than the MLS and leagues in Europe with 17 of the 25 most watched games in the US.

Who knows how these publications value sports teams and what’s accurate but Sportico valued the team at $735m USD in the link below. 

https://www.sportico.com/feature/soccer-teams-football-club-ranking-list-1234721408/

(2) Azteca; World Cup and Stadium Renovation

Azteca will host the first World Cup match on June 11, 2026 (along with four additional matches), before which, the stadium will undergo a renovation which should last 18-24 months and be done before the first World Cup match. It should include skyboxes, better parking, more access points, bathroom renovations, better lighting, all to get the stadium up to FIFA standards for the World Cup. However, there is some risk the renovation isn’t finished before the World Cup starts.

Aside from the World Cup, we have a number of examples around the world where stadium renovations yield higher capacity, higher occupancy and more events – significantly leveraging fixed costs. 

Wembley Stadium in London underwent a major renovation in 2007, increasing its capacity from 82,000 to 90,000 seats, adding a second tier to the eastern and western stands, effectively accommodating more fans without compromising sightlines. Camp Nou stadium in Barcelona, home to FC Barcelona underwent a massive renovation project that increased its capacity from 99,354 to 105,000 and Borussia Dortmund's Signal Iduna Park in Germany  added its "Yellow Wall," to accommodate over 25,000 fans. When Juventus renovated their stadium, the club saw an uplift in attendances of over 60% while increasing the utilization from 78% in 2011 to 88% 2013. More below on how this benefits earnings power. 

(3) PlayCity Casino Business

AGUIL operates 18 casinos across Mexico with 3.5m average annual visitors, 6k slots and gaming terminals and 200k active online accounts (very small online business). The casinos and the online casino and sports betting website operate under a permit granted by the Mexican Ministry of the Interior (Secretaría de Gobernación), which is valid until 2030. Initially, AGUIL was authorized to open up to 45 casinos, but in the license, the limit dropped to whatever they had open by May 2021. Because of COVID delays, they had only 18 open so they are in the process of requesting an increase. 

(4) Publishing and Distribution

Ollamani publishes 11 titles, with six wholly owned trademarks and five trademarks licensed by renowned publishers, including Spanish-language editions of some international brands, as well as nine digital platforms and two digital native brands , with 11m circulation in 2022. Ollamani’s main magazines in Mexico include “TVyNovelas,” a weekly entertainment and show business magazine; “Vanidades,” a popular monthly women’s magazine; and “Caras,” a leading monthly lifestyle magazine. Ollamani also manages 15 digital platforms that generated 215 million unique users and 520 million video views in 2022. They also publish and distribute in Mexico, the Spanish-language print and digital editions of Cosmopolitan, Harper’s Bazaar, and Esquire, through a partnership with Hearst along with National Geographic and National Geographic Traveler. 

Financials Metrics, Modelling and Estimates 

1. Club America Revenue Drivers/KPIs

We assume fairly flat growth of 5% across the board for Club America as a team though we are likely conservative on domestic and US broadcasting rights. We also assume ‘remaining’ which consists of prize money, concessions, sponsorships and trademark royalties stays fairly constant since it is somewhat hits driven. Most of our Soccer segment growth comes from the stadium revenue. 

Broadcast Rights

As discussed above, Club America is one of the most popular and watched teams in the US and the article below highlight’s Amazon’s interest in Liga MX broadcast rights. With Apple’s recent push into MLS, they are also a potential bidder. Liga MX is also in the process of potentially selling broadcast rights for the league as a whole to the highest bidder, much like European soccer leagues do. 

https://12ft.io/proxy

https://en.as.com/soccer/amazon-increase-offer-to-secure-chivas-broadcast-rights-n/

We believe there is room for significant increases in broadcast rights, especially US rights for Club America, either individually or with the league though we do not model this potential growth. 

2. Stadium Azteca KPIs

What’s interesting about the stats above is that with a capacity of 83k, attendance was only in the 20-38k range for games though higher for concerts like Bad Bunny (67k attendance) or a Patriots game (75k)…etc. The number of events is also much lower at 49 vs. comparable stadiums at hundreds. After RealMadrid renovated their stadium, they drove events to 300 days/year. We think there is room to increase the number of events and increase attending which would be a significant return on the $150m USD spent to renovate Azteca. As per the assumptions below, we believe they take out a project finance loan for $100m at a lower interest rate than they receive on the cash on their balance sheet. 

The stadium drivers above are the real growth drivers for the Soccer segment. We assume a drop in attendance of about 20% in 2025 as the stadium is renovated but as per some of the examples above, we believe that the remodeling will drive increased events (up to 30) and higher ticket prices. As a sanity check, the 297 pesos average from events above post-renovation compare to the 1,200 peso ticket price for Bad Bunny’s performance at Azteca – clearly at the high end of the spectrum but a gut check for accuracy. 

The result is a fairly large increase in Azteca ticket sales but still conservative with only 30 non-soccer (plus 49 soccer) events at the stadium per year (again, compare to 300 events at Real Madrid total). 

Consolidated Soccer/Stadium Income Statement

While the jump in Azteca ticket sales seems large in 2026, we think the additional capacity, higher prices and additional events allows them to leverage fixed costs more effectively. We are being somewhat conservative in our operating margin assumptions, accordingly. 

As a sanity check, the incremental 300m pesos in operating income is on a 2.6bln peso spend on the new stadium, not an aggressive return assumption with room for potential upside on higher ticket prices and additional events. 

3. PlayCity Casino Modelling/KPIs

As discussed above, PlayCity has 18 locations around Mexico with KPIs listed below.

The online sports business is small and given the limited information on growth/strategy, we don’t assume significant growth though this is an additional free option. We also assume low single digit growth in visits, spend…etc for the physical casinos. That said, the additional optionality comes from increasing the number of casinos from 18 to 40+ as per the synopsis above. 

We use the Macau casinos steady state operating margins to estimate 45% incremental margins for the business to drive operating income growth, shown below all driven through the KPIs above. 

4. Publishing

Aside from the description above, this division is barely worth discussing since it doesn’t contribute much to the bottom line and is likely in secular decline, even in an emerging market but financials listed below. 

Capex and Remodelling Assumptions, Interest Expenses 

According to BMV, Televisa had guided to $150-160m USD (2.6bln pesos) in capex spending for Azteca which we break down over 21 months in 2024-2026 ahead of the World Cup. We also assume (shown above) that they finance about $100m USD at 8% in a project finance related loan, hence the logic in financing the remodeling vs. using cash on hand. We also account for interest income and lease expenses above.

Consolidated Income Statement, Free Cash Flow and Valuation

2027 is the first normalized year post stadium expansion capex and we can see how free cash flow generative this business is vs. the market cap/EV.

Without extremely aggressive assumptions, Ollamani trades at a 3x FCF multiple on normalized free cash flow. The current PE is also 8-10x so we aren’t paying much today with significant room for future multiple expansion and cash flow growth. 

At 100 pesos, the company trades at 9x our 2027 normalized free cash flow, offering  175% upside. 

Appendix

Liga MX Big 4

• In Mexican football, the Big Four refers to a group of four clubs, Club América, Guadalajara (popularly known by their nickname Chivas), Cruz Azul and Pumas UNAM, which are the most popular and successful sides in the country (Link)

• With 41 Liga MX titles and 18 CONCACAF Champions Leagues between them, it is hard to argue that they are not (Link)

Liga MX Recent Titles

(Link)

Cruz Azul

• One of Mexico’s “Big Four” and one of Mexico’s four most popular teams. Their main rival is fellow Mexican City club, Club America, in the rivalry that’s known as the “Clásico Joven” or “The Juvenile Classic”

• Estadio Azteca, the nation's largest sports venue, served as their home venue until 1996, when they moved to the Estadio Ciudad de los Deportes, which was renamed Estadio Azul (Link)

Club Deportivo Guadalajara

• Their nickname Chivas, is a Mexican professional football club based in the Guadalajara metropolitan area, Jalisco, Mexico

• Guadalajara is one of the ten founding members of the Primera División (Liga MX) and is one of seven teams that have never been relegated

• Guadalajara have played their home matches at Estadio Akron in Zapopan since 2010, having previously played at Estadio Jalisco. Guadalajara is the only football club in Mexico that does not sign foreign players (Link)

Club Universidad Nacional, A.C.

• It is commonly referred to as UNAM or their nickname Pumas, is a professional football club based in Mexico City, Mexico. Founded in 1954, they play their home games at Estadio Olímpico Universitario

• The club has a long-standing rivalry with Club América in the derbi capitalino

• The team is also known for its youth development system, which has produced international players such as Hugo Sánchez, Manuel Negrete, Luis Flores, Miguel España, Claudio Suárez, Luis García and many more (Link)

Catalyst

Earnings calls, investor relations efforts, stadium renovation, casino ruling, general investor knowledge