Factors Affecting the Sporting Performance of European Football Clubs After Acquisition

Abstract

The trend of takeovers of European football clubs has been evident since year 2003 when Chelsea Football Club were acquired by Russian billionaire Roman Abramovich, thus prompting the European football governing body UEFA to introduce the Financial Fair Play (FFP) Regulations in order to curb its destructive effects on European football. Hence, we want to investigate the effects of acquisitions on the sporting performance of European football clubs and identify the factors that influence the post-acquisition sporting performance of football clubs by applying and extending the mergers and acquisitions (M&A) theories for regular firms onto football clubs. We suggested that higher industry relatedness, friendly takeover, concentrated ownership, lesser managerial changes and higher amount of player trading action would contribute to greater improvement of post-acquisition sporting results. Based on 57 sample events from the top two level leagues of the four major European footballing nations between season 2003/04 and 2010/11, we applied multiple regression to test the impact of these factors on changes in end-of-season league positions, average league points and overall average points. Our results showed that mood of acquirer’s acquisition bid and player trading action significantly contributes to the improvement of sporting performance among newly acquired football clubs.