The financial might of European football clubs is not a secret by any means. Even in a pandemic-hit market, major European top-flight clubs spent billions on summer transfers. Investing in sports stock can be quite profitable if you adopt the right strategy and identify the right stocks. As an individual stock market investor, should you consider buying shares in football clubs?
Are Football Clubs Risky Investments?
Buying shares in football clubs would have been suicidal a year ago. Because of Covid restrictions, the clubs lost a sizable portion of their revenues. A recent estimate has shown that the clubs will miss out on as much as $10.6 billion of revenue because of the pandemic. But, things are taking a turn for the better now.
Thanks to the mass vaccination around the continent and falling rates of cases, clubs have been allowed to reopen their gates to the public again. Fan attendance in the stadium will not only bring gate money to clubs, but it will also boost their TV rights earning by a significant degree.
On top of that, clubs have spent generously to bring in marquee signings and add a further dash of incentives for sponsors to invest and fans to buy more merchandise.
As the football market recovers, now could be the right time to invest in football stocks.
How To Buy Shares Football Clubs
- Not all football clubs are publicly listed. Find the ones that are available for trading, and identify the right profiles for investment. As an investor, you must sideline your emotions. Just because you support a particular football team, you shouldn’t buy its stocks without considering its current financial status. It’s different, however, if you want to have a sense of ownership in the club that you love regardless of profitability.
- Register as a share dealer under a broker.
- Log in and explore the platform. Check which stocks are showing clear signs of growth.
- To find the stocks of a specific club, go to the search bar and type in its name. If it’s available for trading, you will find it.
- Decide the number of shares you want to buy after you have pinpointed your desired share.
- Purchase the shares by clicking on the ‘’purchase now’’ button.
Which Clubs Are Publicly Listed?
Only a limited number of clubs are enlisted publicly. We have highlighted some of them below:
Manchester United is currently going through an ascendancy both on and off the pitch. The club looks like a genuine title contender for the first time since the end of the Sir Alex Ferguson era. Like other clubs in Europe, the Red Devils will enjoy an upswing in revenue. The signing of Cristiano Ronaldo will also hand the club a considerable commercial boost.
From an investor’s perspective, you can expect all these to reflect on the performance of the club’s shares.
The club is currently owned by the Glazers family. The US real estate tycoons bought a 2.9% stake at the club in 2005. By 2005, they became majority shareholders as they controlled 57% of the company. By 2015, the Glazers owned 90% of the club.
In recent years, the Glazers have begun to diversify their investment by selling off shares of the club. Earlier this year, they sold $100 million worth of stocks to a Chicago based investment firm. In terms of percentage, that’s roughly 14% of the club’s total ownership.
Originally, the club was listed on the London Stock Exchange. The Glazers delisted it after taking over the club. In 2014, they made the club public again but shifted it to the New York Stock Exchange.
The club’s share price has been on the rise lately. Every share was valued at around $15 at the start of August. One month fast forward, the share price has exceeded the $17 mark.
Juventus is one of the three football clubs in Italy that have gone public. The Bianconeri have been enlisted in the Milan Stock Exchange since 2001. Unsurprisingly, the club’s stock price took a massive plunge in 2006 following the club’s involvement with the notorious calciopoli. The club was demoted to the Italian second division as a punishment before returning to the top-flight as Serie B champions in 2007.
The Turin-based club has been a dominant force in Italian football following the collapse of Milan giants. Before Inter Milan remarkably won Serie A last season, Juve had won nine consecutive Scudetto.
Continuous success expanded the Juventus brand globally. As a result, the club’s stock prices have risen consistently between 2010 and 2020. In 2018, their stock prices grew 150% following the signing of Cristiano Ronaldo.
Short term investors have reaped incredible rewards for their investment in the club during the Ronaldo hype. The pandemic and Ronaldo’s departure have taken a heavy hit on the club’s share prices, however. Juve’s stock prices have fallen by 30% in recent times. At the moment, the club’s shares sell for €.72 apiece.
You should know Celtic for their incredible football heritage. The 51-time Scottish champions also have a European Cup to their name, a title that has eluded some of the biggest clubs across Europe. Apart from the on-pitch success, the Hoops have excelled financially in recent years too.
The club was near bankruptcy when Canadian businessman Fergus McCann acquired the club. Under his steady management, the club overcame its financial woes. Between 2017 and 2019, the club’s share price skyrocketed. The pandemic took a hit on the club’s finances, as expected. But, it is back on a rising trend now.
AS Roma’s journey as a publicly listed company went off to the right path. After a promising start, unfortunately, the share prices took a dip and didn’t recover for 16 years. The lacklustre performance in the league is one of the many factors that have led to this downfall. Since the club’s IPO announcement, Roma’s share prices have declined by 85%.
That said, the recent signs have been encouraging for the Giallorossi. Following Jose Mourinho’s appointment as the new manager, the club’s share prices have risen. Can the special one bring back the glory days to Rome and make Roma shareowners happier than they have been in decades? That remains to be seen.
Borussia Dortmund is the only club in Germany that has made its shares available to the public through the stock market. In 2000, the club enlisted itself in the Frankfurt Stock Exchange. In the first 10 years, BVB failed to attract many investors and the shares performed poorly.
The club made an outstanding comeback over the last ten years as the share prices rose steadily. Bar the pandemic year, Borussia Dortmund share prices have gone up. In recent months, BVB shares have been on an upward trajectory again. Since 2019, it has been paying dividends to its shareholders.
Investing in football clubs can be a great way to make money if you manage to assess the market perfectly before investing. Besides the club’s performance and fan following, you have to take into account the financial status of the owners too. Without stable ownership, investing in a football club would be quite risky, no matter how successful or popular it is.