This is a question that surely many football fans may ask themselves: do football teams trade on the stock market? If so, which teams are listed on the stock market? Can I buy their shares like those of any other company?
The truth is, yes, there are several European teams listed on the stock market, and their shares can be bought as easily as shares of any other company. After all, as much as we are passionate about this sport, football and business have always been closely connected.
Read on to learn how to invest in football teams and why you may want to do so.
What was the first football team to trade on the stock market?
As mentioned before, football has transformed from a mere sport into a significant business over the years. In 1983, Tottenham became the first football club to go public and trade on the stock market. Following their lead, numerous clubs from Denmark, Holland, Italy, Turkey, Portugal, and France have also become publicly traded entities.
It is remarkable that, in a particularly tough year for world economies like 2020, football teams also suffered major drops in their income, due to the football stoppage as a result of the lockdown and the closed-door matches. In fact, now that we can consider the pandemic over, we see how most sports clubs have not yet recovered their pre-pandemic performance.
What was the STOXX Europe Football?
In 2002, an exclusive index was created for football clubs, the STOXX Europe Football. This index, which was active until mid-2020, has suffered great volatility throughout its history. In June 2020, the Stoxx announced the end of this index.
Why did the STOXX Europe Football cease to exist after 18 years?
As shown in the figure below, the index suffered great volatility. In fact, had one invested in the index since its inception, they would have incurred losses of up to 50%. Even the upswing at the end of 2019 couldn’t offset these losses, as it was nullified by the decline in 2020. Eventually, despite a partial recovery in value, Stoxx decided to cease tracking this index. Time revealed that it was not among the most profitable investment options.
Which teams are listed on the stock exchange?
Here is an expansive list of the main football teams listed on the stock exchange:
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Do British football teams trade on the stock market?
Some British football teams are publicly traded on the stock market. This means that people can buy and sell shares of the team, just like they would with shares of a regular company. Being publicly traded allows teams to raise money that they can use to improve the team, like buying new players or upgrading their stadiums.
However, not all football teams choose to go public. Some remain privately owned, which means their shares are not available for the general public to buy or sell.
Two well-known examples of publicly traded British football clubs are Manchester United and Celtic Football Club. Manchester United trades on the New York Stock Exchange, while Celtic is listed on the London Stock Exchange.
The first British football team to become publicly traded
The first British football team to become publicly traded on the stock market was Tottenham Hotspur. The club went public in 1983. By doing this, Tottenham Hotspur was able to raise money from the public by selling shares in the team. This move was considered innovative at the time and paved the way for other football clubs to also go public.
Going public helped Tottenham Hotspur to generate funds that could be used for various purposes, such as improving the stadium, signing new players, and overall enhancing the club’s operations.
After Tottenham Hotspur went public, several other British football clubs followed suit, seeing it as a way to raise capital and improve their financial situation. However, being publicly traded also comes with its own set of challenges, such as increased scrutiny from shareholders and the need to maintain strong financial performance.
Other successful cases of football teams that went public | Manchester United and Celtic Football Club
Manchester United is one of the most famous football clubs in the world, based in Manchester, England. The club went public in 1991 when it was listed on the London Stock Exchange. However, it was later bought by the American Glazer family in 2005 and taken off the London Stock Exchange. In 2012, the club went public again, but this time it was listed on the New York Stock Exchange in the United States.
The club’s shares have seen periods of both increase and decrease over the years. Their performance on the stock market can be affected by various factors, including how well the team is doing on the field, its commercial deals, and its overall financial health. Generally speaking, good seasons and lucrative sponsorship deals have had a positive impact on the share price, while poor performance and financial uncertainty have led to declines.
Celtic is a famous football club based in Glasgow, Scotland. The club went public in 1995 and is listed on the London Stock Exchange‘s Alternative Investment Market (AIM). Going public allowed Celtic to attract investment and strengthen its financial position. The funds raised have been used for various purposes, including upgrading the stadium and signing new players. Celtic has a large and dedicated fan base, which adds to its appeal as a publicly traded entity.
Celtic’s share price has also fluctuated over time. Similar to Manchester United, the value of Celtic’s shares can be influenced by the team’s performance, ticket sales, and other revenue-generating activities like merchandise sales. Major wins or losses, especially in international competitions, can have a noticeable effect on the share price.
How has COVID-19 affected the stock price of these teams?
The pandemic led to a suspension of football matches and closed-door games, which meant a loss of ticket sales and decreased match-day revenue. Sponsorships and merchandise sales also took a hit. As a result, Manchester United’s stock price experienced a decline, especially in the early months of the pandemic in 2020. While the club took steps to manage the financial impact, such as reducing costs and negotiating payment deferrals, the stock price remained sensitive to pandemic-related news and restrictions.
Celtic also faced financial challenges due to the pandemic. The club experienced similar losses in ticket sales, sponsorships, and other revenue streams. As a result, the stock price of Celtic saw declines. The club had to look for ways to reduce costs, including staff furloughs and salary reductions, to cope with the financial strain.
How to invest in football teams?
Investing in publicly traded British football teams is similar to investing in other companies. Here’s how retail investors can invest in teams like Tottenham Hotspur, Manchester United, and Celtic Football Club:
- Open a brokerage account: The first step is to open an account with a brokerage firm. This is the platform you’ll use to buy and sell shares. Make sure to choose a brokerage that allows you to trade the shares of the specific football teams you’re interested in. For example, IG offers a wide range of football teams to choose from – have a look at our IG review to see how this broker works.
- Fund your account: After opening your brokerage account, you’ll need to deposit money into it. This usually involves transferring money from your bank account.
- Research: Before buying shares, it’s essential to do some research. Look at the team’s financial performance, news about player transfers, and other factors that might affect the stock price. If you are new to the investment world, make sure you check our beginners’ guides, such as the stock market for beginners, how to invest in the stock market, and trading guide.
- Place an order: Once you’re ready, you can place an order to buy shares. You’ll need to know the stock ticker symbol for the football team. For example, Manchester United trades under the ticker symbol “MANU” on the New York Stock Exchange. You’ll have options like buying at the current market price or setting a price at which you want to buy – have a look at the main stock order types to get familiar with them.
- Monitor and manage: After buying shares, you’ll need to monitor your investment. The value of your shares can go up or down based on various factors, including the team’s performance and overall market conditions. You can sell your shares anytime you decide, based on your investment goals and money management strategies.
- Diversify: It’s often advised not to put all your money into a single investment. You might want to consider spreading your money across different types of investments for a balanced portfolio, such as investing in commodities, CFD trading, futures trading, or options trading.
Invest in football teams: summary
Certainly, investing in publicly traded football teams offers a unique opportunity for fans and investors alike to become a part of their favourite clubs’ financial journey.
To get started, individuals should first open a brokerage account that provides access to the stock market where the chosen football team’s shares are listed.
Research is key; potential investors should review a team’s financial performance, look at market trends, and possibly conduct technical analysis before making any investment decisions. It’s crucial to monitor your investments regularly, be aware of brokerage fees, and consider diversifying your portfolio to manage risk.
Overall, while investing in football teams can be exciting, it comes with its own set of financial risks and responsibilities that should be carefully considered.
Can I vote in club decisions if I own shares in a football team?
Ownership of shares may give you voting rights in some matters related to the club’s operations. However, the extent of your voting power typically depends on the number of shares you own and the type of shares. For most retail investors with a small stake, the voting power is usually minimal. Large shareholders, like institutional investors or majority stakeholders, often have more influence in club decisions.
Do I need to pay stamp duty when buying shares of British football teams?
When buying shares of UK-based companies, including British football teams listed on the London Stock Exchange, you are usually required to pay stamp duty. This is automatically added when you buy the shares through a UK brokerage. Always check the specifics with your brokerage to understand the full cost of your transaction.
Is it possible to invest in lower-tier or non-league British football teams?
Lower-tier and non-league football teams in the UK are usually privately owned, meaning their shares are not available to the general public on the stock market. However, some smaller teams may run fundraising initiatives, like issuing bonds or community shares, that allow fans and local investors to contribute financially to the club. Always make sure to understand the terms and conditions before participating in such initiatives.