Abstract
This study investigates the sporting and financial performances impacts of football clubs on stock price dynamics. The sample covers all the European football companies listed on the Stock Exchange over the period 2012-2017. The stock price formation process for listed football companies is investigated through a multiple regression model in which the share price is a function of several variables of listed European football companies, because the authors analyze the impact of both sports and financial and management performance on the share prices of the companies. Panel data fixed effects estimations are employed to mitigate endogeneity concerns and to control for within-firm dynamics. It was found that on market performance: i) positively impacts of sports performance; ii) positively impacts of economic performance; iii) positively impacts of asset and revenue diversification. This topic would be of interest to international investors and will push club managers to nurture their own corporate culture, which, in many cases, is still not in keeping with the size or pace of market development. These findings have important implications for investors as well as club managers. The empirical research provides useful implications to direct club managements towards best practices that will help football clubs access capital markets. Indeed, they present an encouragement for the improvement of the competitive results and the economic-financial performances.
Highlights
Over the last few years and with the advent of the digital age, the football industry has become the largest entertainment industry in Europe, outperforming any other sport and entertainment, from music, cinema or theater
This study aims to investigate the sporting and financial performances impacts of football clubs on stock price dynamics
In the preliminary empirical analysis, carried out both at the level of a single listed European company and at an aggregate level, it was investigated what impact the sports results achieved by the company at time T on its share prices had on the following day of listing
Summary
Over the last few years and with the advent of the digital age, the football industry has become the largest entertainment industry in Europe, outperforming any other sport and entertainment, from music, cinema or theater. The turnover of the major European football companies has grown at a pace unknown to all the other economic sectors, driven by the development of the digital economy, media revenues and sponsorships. This study aims to investigate the sporting and financial performances impacts of football clubs on stock price dynamics. The ordinary shares of football clubs are financial instruments that represent a portion of the share capital of the issuing sports companies, typically set up as a joint-stock company. The issue and subsequent trading of shares by football clubs is aimed at collecting financial resources in the form of risk capital
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