Football Stocks

The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2042-678X.htm
Football stocks: a new asset class Football stocks
attractive to institutional
investors? Empirical results and
impulses for researching investor 471
motivations beyond return Received 31 July 2019
Revised 21 January 2020
11 March 2020
Stefan Prigge 10 May 2020
14 May 2020
HSBA Hamburg School of Business Administration, Accepted 23 May 2020
IMF Institute for Mittelstand and Family Firms, Hamburg, Germany, and
Lars Tegtmeier
Department of Business Administration and Information Sciences,
University of Applied Sciences Merseburg, Merseburg, Germany
Abstract
Purpose – The aims of the research are twofold: (1) exploring whether football club stocks can be considered
an asset class of their own; (2) investigating whether football stocks enable well-diversified investors to achieve
more efficient risk-return combinations.
Design/methodology/approach – Using efficient frontier optimization, a base portfolio, with standard
stocks and bonds, and a corresponding enhanced portfolio, which includes football stocks in the investment
opportunity set, are defined. This procedure is applied to four portfolio composition rules. Pairwise
comparisons of portfolio Sharpe ratios include a test for statistical significance.
Findings – The results indicate a low correlation of football stocks and standard stocks; thus, football stocks
could be considered an asset class of their own. Nevertheless, the addition of football stocks to a well-diversified
portfolio does not improve its risk-return efficiency because the weak performance of football stocks eliminates
their advantage of low correlation.
Research limitations/implications – This study contributes to the evidence that investments in football
are different from ‘ordinary’ investments and need further research, particularly into market participants and
their investment motives.
Practical implications – Football stocks are not attractive to pure financial investors. Thus, football clubs
need to know more about which side benefits are appreciated by which kind of investor and how much it costs
to produce these side benefits.
Originality/value – To the best of authors’ knowledge, this is the first study to analyse the risk-return
efficiency of football stocks from the perspective of a pure financial investor, i.e. an investor in football stocks
who does not earn side benefits, such as strategic investors or fan investors.
Keywords Sports economics, Investment decisions, Portfolio choice, Football stocks, Football investors
Paper type Research paper
1. Introduction
As they hold 41% of the global market capitalization, institutional investors are the largest
kind of shareholders in listed companies (OECD, 2019, p. 17). An institutional investor is a
legal entity ‘that manages and invests other people’s money’ (Çelik and Isaksson, 2013, p. 96).
Examples of institutional investors include mutual funds, sovereign wealth funds, and
private equity firms. For instance, the private equity firm KKR bought an equity stake in the
unlisted German Bundesliga club Hertha BSC Berlin in 2014. As professional investors,
institutional investors evaluate investments in terms of risk-return combinations. They Sport, Business and Management:
An International Journal
welcome additions to their investment opportunity set that allow them to push their efficient Vol. 10 No. 4, 2020
pp. 471-494
© Emerald Publishing Limited
2042-678X
JEL Classification — Z2, G11, G12 DOI 10.1108/SBM-07-2019-0063
SBM frontier more to the north-west, i.e. reach a higher-than-expected return for a given amount of
10,4 risk or bear a smaller amount of risk for a given expected return (see, e.g. Brealey et al., 2011,
pp. 214–218). These efforts explain the popularity of, and the ongoing search for, new asset
classes (D€opke and Tegtmeier, 2018; Platanakis et al., 2019).
Greer (1997, p. 86) defines an asset class as a ‘set of assets that bear some fundamental
economic similarities to each other, and that have characteristics that make them distinct
from other assets that are not part of that class’. An asset class is usually considered as being
472 ‘distinct from other assets’ when its returns are only loosely correlated to established assets.
Due to low correlation, new asset classes could make more efficient risk-return combinations
feasible. Examples in recent years include private equity (e.g. D€opke and Tegtmeier, 2018)
and infrastructure (e.g. Dechant and Finkenzeller, 2013) or, most recently, cryptocurrencies
(e.g. Kr€
uckeberg and Scholz, 2019).
Professional football as a global industry with a long and strong growth path (Boccia, 2018)
that was rather unaffected even by the financial crisis of 2008 and its aftermath (Deloitte, n.d.)
might capture the attention of institutional investors who may ask themselves whether
professional football is a new asset class that offers attractive diversification properties.
Thus, this article addresses two research questions:
RQ1. Can football stocks be described as a new, i.e. separate, asset class?
RQ2. Do football stock returns dispose of such properties that their addition to a well-
diversified portfolio allows investors to achieve more efficient risk-return
positions?
One might argue that the sector of listed football stocks, which is the easiest accessible vehicle
for investments in football, is too small in terms of number of listed football clubs and trading
volume. That might be true for the current status as of year-end 2019, where there are 22 listed
European football clubs. However, this does not undermine the reasoning put forward here, for
several reasons: Institutional investors might also buy a stake in a football club via a private
transaction, i.e. the club is not listed, as in the KKR-Hertha BSC Berlin case mentioned above.
Despite private transactions, public stock markets are, nevertheless, often used as indicators for
the valuation and the risk-return profile of a comparable unlisted company (de Fontenay, 2017;
Admati and Pfleiderer, 2000). If it turns out that football stocks could become an attractive asset
class for institutional investors, this might cause football clubs to go public (again). Moreover,
other capital market intermediaries might develop investment vehicles that are more liquid
than the assets they invest in, such as listed private equity (Huss and Zimmermann, 2012;
Bachmann et al., 2019), thus making shares in unlisted football clubs more liquid.
Academic research has yet to tackle the issue of whether professional football is an asset
of its own that is attractive to institutional shareholders. Although there is a body of literature
on listed football clubs, it focuses primarily on the effect of on-field performance on stock price
(Bell et al., 2012; Duque and Abrantes Ferreira, 2005; Findikçi; Tapşin, 2015; Lehmann and
Weigand, 1998; Majewski, 2014; Ozdurak€ and Ulusoy, 2013; Palomino et al., 2009; Saraç and
Zeren, 2013; St€ockl and Schulz, 2007; Sun and Wu, 2015). In terms of the asset class question,
some inferences can be drawn from Aglietta et al. (2010), Gomez-Martınez et al. (2017),
Lehmann and Weigand (1998) and Prigge and Tegtmeier (2019). All these studies provide
empirical evidence supporting football stocks being an asset class of their own. However, to
the best of our knowledge, the question of whether professional football is attractive to
institutional investors has not yet been addressed directly in academic research.
This paper explores this topic with an established methodology that has been deployed to
analyse the new-asset-class issue and diversification properties of other assets (e.g. H€ ubner
et al., 2004, for real estate, and Grelck et al., 2017, for family business).
Regarding the asset class issue, the study mainly rests on correlation analysis. Results Football stocks
suggest, in line with the literature, that football stocks are indeed an asset class of their own.
The attraction for institutional investors is analysed using a more advanced approach.
Employing efficient frontier optimization, a base portfolio, with standard stocks and bonds,
and a corresponding enhanced portfolio, which includes football stocks in the investment
opportunity set, are defined. This procedure is applied to four portfolio composition rules for
the complete sample period (1995–2017) and for several subperiods. Pairwise comparisons of
portfolio Sharpe ratios include a test for statistical significance. Despite the comparatively 473
weak correlation between standard stocks and football stocks, football stocks usually do not
allow investors to reach a more efficient risk-return position. This is most likely due to the
inferior return of football stocks compared to standard stocks over the last twenty years or so,
which more than depletes the advantage of low correlation.
The study contributes to research on listed football stocks. To the best of our knowledge,
this is the first study to take the perspective of pure financial investors to analyse the risk-
return efficiency of football stocks. This research adds to the extant evidence that
investments in football are different from ‘ordinary’ investments and need further research,
particularly on market participants and their investment motives (Rohde and Breuer, 2017).
Implications for football club managers and corresponding new research opportunities are
sketched.
The article proceeds as follows: Section 2 derives two hypotheses, the separate asset class
hypothesis and the diversification properties hypothesis, from the reviewed literature.
Section 3 explains the methodology, with a special emphasis on the portfolio composition
rules and the significance test developed by Gibbons et al. (1989). Section 4 describes the data
set. Section 5 presents the results, which are discussed in section 6. Section 7 concludes the
article with a special emphasis on managerial implications and research opportunities.
2. Theoretical background and hypotheses

2.1 Separate asset class hypothesis
Sharpe (1992, p. 8) established three criteria for a set of assets to be considered a distinct asset
class of its own: (1) asset classes are mutually exclusive to each other; (2) exhaustiveness
within an asset class; and (3) returns differ among asset classes. Criterion 1 requires that asset
class definitions be free of overlaps; for instance, a certain security is included in one and only
one asset class. The second criterion requires that all assets, which meet the criterion to be
included in a certain asset class, actually be a component of this asset class. Both criteria are
met in our empirical analysis. We use the STOXX Europe Football Index to represent football
stocks. This index includes all listed European football clubs (exhaustiveness). The EURO
STOXX 50 Index and the JPMorgan EMU Government Bond Index, which represent
standard stocks and bonds, respectively, contain no football stocks. Thus, the following
discussion can focus on the most relevant criterion, i.e. whether football stock returns can be
expected to differ from the returns of standard stocks.
Standard stocks represent the general economy. Thus, standard stock returns reflect
business cycles. To substantiate our claim that football stock returns ‘differ’, the following
discussion deals with (1) the link between the general business cycle and football revenues, (2)
the link between the general business cycle and football stock shareholders’ motives to own
shares, (3) the effect of on-field performance – an event unrelated to the general business cycle –
on football stock returns, and (4) empirical evidence of the correlation between returns of
standard stocks – reflecting the general business cycle – and football stocks.
Comparing general economic figures with those of the football sector, it appears that the
football sector has managed to decouple itself from the overall economy. Boccia and
Santomier (2018, p. 6; see also Uefa, 2019) calculate that clubs from twenty European top
SBM leagues increased their revenues by 561% from 1995 to 2016. Average growth amounts to
10,4 9.8% per year. Although these growth rates are highly impressive and underline the
attractiveness of the football sector for potential investors, it is even more relevant in terms of
a low correlation with the general business cycle that the annual growth rate was never
negative, even during the financial crisis of 2008.
The rationale of typical holders of football stocks for buying these shares supports the
decoupling of football stock returns from the general business cycle. A distinction could be
474 made between financial investors and other investors. Financial investors are ‘investors with
little or no interest in the business other than the returns it can generate either through the
payment of dividends or the appreciation of the share price’ (Leach and Szymanski, 2015,
p. 28). Football stocks do not appear to be very attractive to financial investors. Soon after an
IPO wave in the early 1990s, institutional investors withdrew from listed English football
clubs (Walters and Hamil, 2010; Wilson et al., 2013). ‘Other investors’ is the umbrella term for
all football investors whose benefits derived from holding football stocks include other items
than dividend and share price appreciation, either in addition to, or instead of, dividend and
share price appreciation. Building on Buchholz and Lopatta (2017), Chemnitzer et al. (2015),
Prigge and V€opel (2014), Rohde and Breuer (2017), Ruoss (2009) and Teichmann (2007), ‘other
investors’ could be divided into strategic investors, patron investors (‘sugar daddies’), and fan
investors. These will be explored one by one to substantiate the argument that the bidding
behaviour of these investor types is only weakly correlated with the general business cycle.
A strategic investor is a corporate entity that wants to protect and deepen the business
relation with a specific football club via a substantial equity stake in that club (similarly
Capasso and Rossi, 2013; Millward, 2013). Insurance company Allianz and Bayern Munich
are one example. Allianz became a stadium name sponsor during the planning and
construction of the Allianz Arena in the early 2000s. In 2014, Allianz bought an equity stake
of 8.33% in Bayern Munich and, at the same time, extended their sponsorship until 2041.
Thus, it seems plausible to assume that Allianz is not a financial investor, but that part of the
return from equity ownership takes the form of protecting the substantial stadium name
sponsoring via voting rights at the general meeting and a seat on the supervisory board.
Business cycle sensitivity of such flagship marketing projects can be expected to be
moderate.
Turning to patron investors as the third kind of investor, Andreff (2007, p. 6) characterized
them as those shareholders who ‘behave as non-profit-seeking investors, patrons, or tycoons’.
‘Sugar daddy’ is a more recent term for this type of extremely wealthy businessman who buys
a significant equity block in a football club. Quite a variety of people are filed under the rubric
‘patron investor’ (Rohde and Breuer, 2017, 2018). For instance, Morrow (2017, p. 168) assumes
that Roman Abramovich at Chelsea and Sheikh Mansour bin Zayed Al Nayhan at
Manchester City act as utility maximisers. However, the source of their utility might be quite
different in both cases. It may be becoming a celebrity and obtaining access to important
people in the first case and using football as a geopolitical tool in the second (Yueh, 2014).
Notwithstanding this diversity, however, it does not seem overly presumptuous to assume
that their demand for football stocks is rather insensitive to the business cycle.
Moreover, the same assumptions can also be made, and justifiably so, for the fan investors,
the fourth kind of investor. They invest in ‘their’ club mainly because of their emotional
attachment to it rather than for a financial return (Bell et al., 2012; Ruoss, 2009, pp. 68–69).
Zuber et al. (2005, p. 313) concluded that fan investors in the English Premier League are
‘insensitive to traditional financial information’. Huth et al. (2014) and Demir and Rigoni
(2017) provided supporting empirical evidence for fan investors in Germany and Italy,
respectively. Summarizing his own empirical research and extant empirical evidence, Huth
(2019, p. 15) states ‘that traditional investment objectives [e.g. return, risk, liquidity; the
authors] are more or less irrelevant for supporter-involved financial instruments’.
The willingness to provide funding grows with one’s club attachment; this also applies to Football stocks
crowdfunding (Huth, 2018a; 2018b).
In short, for two kinds of investors, patron investors and fan investors, it is highly likely
that their bidding behaviour relative to football stocks is only loosely related to the
business cycle. Strategic investors might be only slightly more business-cycle sensitive, at
least in those cases where the equity stake in the football club protects a flagship
sponsoring project, as in the Allianz case. In such cases, one could expect ownership in
football clubs to be scrutinized only during severe economic downturns. As financial 475
investors earn no extra benefits from holding football stocks, their bidding behaviour can
be assumed to rest almost exclusively on the core fundamentals of the pure football stock,
i.e. dividends and change in share price. However, they are clearly the minority among
shareholders of European clubs. Applying a slightly different classification scheme,
Buchholz and Lopatta (2017) reveal that 14.5% of European clubs are majority-owned by
economic investors whose focus is on maximizing a club’s profitability and thus their own
stake’s value. On the other hand, 60.3% of European clubs are majority-owned by sporting
investors who derive other benefits from club ownership (see also Birkh€auser et al., 2019,
for an extensive list of investor payments in 305 European football clubs from 2004/05 to
2014/15).
What else drives football stock returns? Research mainly supports the hypothesis that on-
field performance affects stock returns; see research on England (Lehmann and Weigand,
1998; Palomino et al., 2009; Bell et al., 2012), Germany (St€ockl and Schulz, 2007), Italy
(Majewski, 2014; Sun and Wu, 2015), Portugal (Duque and Abrantes Ferreira, 2005), and
€
Turkey (Ozdurak and Ulusoy, 2013; Saraç; Zeren, 2013; Findikçi; Tapşin, 2015). As on-field
performance affects share price but is uncorrelated with the general business cycle, the
empirical evidence backs the claim that football stocks are only weakly correlated with the
general market.
Since the new asset class issue is mainly decided by the extent to which football stock
returns are related to standard stock returns, extant empirical studies, which often examine
that correlation as a by-product of their main research question, provide a first indication.
Aglietta et al. (2010) find a correlation coefficient of 0.28 between the STOXX Europe Football
Index and the EURO STOXX 50 Index for the time period 1991 to 2009. Gomez-Martınez et al.
(2017) document correlation coefficients of slightly more than 0.5 between the STOXX Europe
Football Index and several European stock indices from January 2015 to January 2016. The
beta factor also hints at the correlation between football stocks and standard stocks. The beta
results of Lehmann and Weigand (1998) (Premiere League clubs, 1995–1997) and Prigge and
Tegtmeier (2019) (European football clubs, 2010–2016), as well as the Bayesian network
analysis by Gomez-Martınez et al. (2017), indicate only a moderate correlation between
football stocks and standard stocks.
Theoretical reasoning and available empirical evidence yield hypothesis 1:
H1. Football stock returns differ from those of standard stocks, especially as correlation
between them is low.A rejection of hypothesis 1 would inevitably imply that football
stocks are not an asset class of their own.
2.2 Diversification properties hypothesis

Institutional investors seek assets that increase the risk-return efficiency of their total
portfolio. We discuss in turn the return contribution and the risk contribution that could be
expected from adding football stocks to a portfolio.
We begin with the return contribution. As described above, European football has forged
a strong growth path in terms of revenues. At least as importantly, after six consecutive years
of net result improvement, European top division club football became profitable in season
SBM 2017/18 for the first time in many years, with a profit of V0.6 billion in 2017/18, up from a loss
10,4 of V1.7 billion in 2011/12 (Uefa, 2019, p. 79). However, extant empirical evidence documents
the poor performance of football in the stock market. Prigge and Tegtmeier (2019) found that
the STOXX Europe Football Index was overvalued during their sample period 2010–2016,
even leading to a negative monthly excess return of 0.12% (excess over the one-month Euro
LIBOR interbank rate). This is weak compared to the monthly excess return of MSCI Europe
of 0.66% during that period. Aglietta et al. (2010) find similar results from 1991 to 2009. Thus,
476 based on stock returns, it appears unlikely that the addition of football stocks makes
portfolios more risk-return efficient.
In terms of risk contribution, matters look more favourable for football stocks, though their
risk profile might appear unattractive at first sight. Prigge and Tegtmeier (2019) as well as
Aglietta et al. (2010) measure a relatively high volatility of the STOXX Europe Football Index
compared to their respective proxies for European standard stocks. Since institutional
investors would add football stocks to a portfolio that has already been well diversified, only the
systematic risk involving football stocks matters rather than volatility, which includes both
systematic and diversifiable idiosyncratic risk (see, for example, Brealey et al., 2011, pp. 191–
198; the entire reasoning is based on the Capital Asset Pricing Model (CAPM) developed by
Lintner, 1965; Mossin, 1966; and Sharpe, 1964). Prigge and Tegtmeier (2019) divide total risk
yields into systematic risk and unsystematic risk. For their sample stocks, the average
systematic risk yield amounts to 1.84% and the unsystematic risk yield to 13%, demonstrating
that the total risk of single football stocks is overwhelmingly caused by idiosyncratic, i.e.
diversifiable, factors. In essence, the minor importance of systematic risk is simply another
incarnation of the weak correlation between football stocks and the general stock market
previously discussed in relation to hypothesis 1. Thus, the empirical evidence put forward for
hypothesis 1 also supports the hypothesis that adding football stocks to a well-diversified
portfolio does not add much systematic risk to that portfolio, if any at all, making it likely that a
more efficient risk-return combination can be achieved with football stocks.
In summary, there are contradictory arguments and evidence relating to the
diversification properties of football stocks. The poor return of football stocks over the last
decades does act against attractive diversification properties, whereas the minor relevance of
systematic risk for football stocks favours attractive diversification properties. Therefore, we
split hypothesis 2 into two parts:
H2a. Football stocks offer attractive diversification benefits, i.e. their addition to a well-
diversified portfolio improves the portfolio’s risk-return efficiency.
H2b. Football stocks do not offer attractive diversification benefits, i.e. their addition to a
well-diversified portfolio does not improve the portfolio’s risk-return efficiency.
3. Methodology
To investigate the diversification properties of investments in European football stocks, we
follow the approach of Grelck et al. (2017), who analysed the diversification properties of listed
family firms and the potential of family firms to serve as a separate asset class. Using
Markowitz’s (1952) mean-variance-approach, we analyse whether a base portfolio (BP)
comprising only standard assets, i.e. European stocks and European bonds, could reach a
dominating risk-return combination when European football stocks could be added to that
portfolio: the enhanced portfolio (EP). We apply four different portfolio composition rules that
represent different investment strategies: minimum variance portfolio, tangent portfolio,
naı€ve portfolio and naı€ve return portfolio.
The first portfolio is the minimum variance portfolio (MVP). Its composition is calculated
using formula (1):
N X
X N Football stocks
σ 2MVP ¼ wi wj σ ij → min! ðminimizing portfolio riskÞ (1)
i¼1 j¼1
X
N
wi ¼ 1 ðbudget restrictionÞ (2)
i
wi ≥ 0 ðno short sellingÞ (3) 477

with σ 2MVP Variance of minimum variance portfolio MVP
wi Share of investment i in portfolio P
σ ij Covariance between investments i and j
N Number of assets.
The second portfolio is the tangent portfolio (TP). The tangent portfolio is defined as the
portfolio that maximizes the Sharpe ratio, i.e. maximizes the ratio of portfolio excess return
(portfolio return over risk-free rate) to portfolio standard deviation. The Sharpe ratio is
calculated using formula (4):
rP rf
SRP ¼ (4)
σP
with SRP Sharpe ratio of portfolio P
r P Mean return of portfolio P
σ P Standard deviation of portfolio P
rf Risk-free rate of return
The tangent portfolio can then be solved analytically as follows:
PN
i¼1 wi ri rf
SRTP ¼ qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
PN PN → max! (5)
i¼1 j¼1 wi wj σ ij
X
N
i
wi ≥ 0 ðno short sellingÞ (7)
The third portfolio, the naı€ve portfolio (NP), comprises all considered asset classes with an
equal weight. Note that this is the only portfolio whose composition is determined ex ante, i.e.
before the investment period. The naı€ve portfolio is easy to construct, but not necessarily
efficient.
Therefore, a fourth portfolio is considered. The naı€ve return portfolio (RP) is located on the
efficient frontier, yielding the same return as the naı€ve portfolio. The composition of the naı€ve
return portfolio can be calculated as follows:
N X
X N
σ 2RP ¼ wi wj σ ij → min! ðminimizing portfolio riskÞ (8)
i¼1 j¼1
SBM X
N
10,4 wi rRP ¼ rNP (9)

i¼1
X
N
i
478 wi ≥ 0 ðno short sellingÞ (11)
Each of the four portfolios exists in two variants: (1) The base portfolio (BP) with European
standard stocks and bonds, but without European football stocks, and (2) the enhanced
portfolio (EP) that might also be invested in European football stocks. For each of the four
portfolios, the Sharpe ratios will be calculated for the base portfolio and for the corresponding
enhanced portfolio. If, for instance, the Sharpe ratio of the enhanced portfolio MVP with
European football stocks is higher than that of the base portfolio MVP without European
football stocks, this indicates that the inclusion of European football stocks improves the
investor’s position. Furthermore, the approach based on Gibbons et al. (1989) allows one to test
the hypothesis that the Sharpe ratios of a base portfolio (BP) and its corresponding enhanced
portfolio (EP) differ significantly. The following null hypothesis is testable: The Sharpe ratio of
portfolio BP (SRBP) does not differ significantly from the Sharpe ratio of portfolio EP (SREP).
Gibbons et al. (1989) developed the following test statistic for this hypothesis:
ffi 12
0 rffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
2
B ð1 þ SREP C
B C
W ¼ BrffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiC 1 (12)
@ 2 A
1 þ SRBP
with SRBP Sharpe ratio of the base portfolio

SREP Sharpe ratio of the enhanced portfolio
Measuring a value of W that differs significantly from zero would mean that one of the
portfolios under investigation outperformed the other portfolio with respect to its mean-
variance properties in a statistically significant manner. The Wishart-distributed test
statistic W can be transformed into an F-distributed test statistic:
TðT N 1Þ
W ∼ FN ;ðT−N −1Þ (13)
NðT 2Þ
with T Number of observations

N Number of assets.
The transformation only applies to the non-negative values of W. To test whether the
enhanced portfolio produces a statistically significant better Sharpe ratio, (12) is
straightforward as long as SREP > SRBP ≥ 0 holds. Otherwise, the equation must be
modified accordingly. The power of the test statistic depends on the relation between T and
N; Gibbons et al. (1989) mention a threshold of T/N ≥ 3, which is convenient for our data set.
4. Data
To assess whether investments in European listed football clubs are a separate asset class
and might enhance the diversification potential of a traditional stock and bond portfolio, one
must define the traditional asset classes already available to investors. In our investment Football stocks
universe, investors may invest in a well-diversified European stock portfolio and in a well-
diversified European bond portfolio. In total, the investment universe comprises three asset
classes. First, European football stocks are represented by the STOXX Europe Football
Index, which indicates the breadth and depth of the European football industry. In January
2018, the index covered 22 football clubs. Table 1 shows the components of the STOXX
Europe Football Index. Second, European blue-chip stocks are represented by the EURO
STOXX 50 Index, Europe’s leading blue-chip index for the Eurozone. The index covers 50 479
stocks from eleven Eurozone countries. Third, European government bonds are represented
by the JPMorgan EMU Government Bond Index. The index includes liquid government
bonds issued by eleven countries. All indices are denominated on an EUR basis and adjusted
for capital actions and dividends or coupon payments. Our observation period spans January
1995 to December 2017.
A comparison of European football stocks with traditional European stocks and
European bonds is illustrated in Figure 1.
Table 2 shows the descriptive return statistics for the three indices under observation.
Furthermore, we conduct robustness checks for different market phases. Panel A shows the
descriptive return statistics for the full sample. Panels B, C and D represent three upmarkets
and panels E and F two downmarkets in the general stock market.
During the full sample period, the monthly mean returns of the indices range between
0.72% for traditional stocks and 0.30% for football stocks, which is lower than the mean
return for bonds (0.48%). The standard deviation is highest for football stocks (6.54%),
followed by blue chips (5.36%) and bonds (1.13%). This setting is also reflected in the lowest
Sharpe ratio for football stocks. With respect to downside risk as measured by semi-volatility,
value-at-risk, and the maximum drawdown, football stocks exhibit the greatest downside
risk for all three measures. Furthermore, only football stocks exhibit a positive skewness. A
No Club Country
1 Aalborg Boldspilklub DK
2 AGF Kontraktfodbold DK
3 AIK Football SE
4 Ajax Amsterdam NL
5 AS Roma IT
6 Benfica Lissabon PT
7 Besiktas Istanbul TR
8 Borussia Dortmund DE
9 Brondby IF B DK
10 Celtic Glasgow GB
11 FC Copenhagen DK
12 FC Porto PT
13 Fenerbahce Istanbul TR
14 Galatasaray Istanbul TR
15 Juventus Turin IT
16 Lazio Rom IT
17 Olympique Lyonnais FR
18 Ruch Chorzow PL
19 Silkeborg DK
20 Sporting Lissabon PT Table 1.
21 Teteks Ad Tetovo MK Components of the
22 Trabzonspor TR STOXX Europe
Note(s): As of January 2018; https://www.stoxx.com/index-details?symbol5FCTP football index
SBM 600
10,4
500
400
300
480 Stoxx Europe FI
Euro Stoxx 50
200
JPM GBI EMU
100
01.10.2014
01.02.2003
01.06.2012
01.12.2015
01.02.2017
01.04.1997
01.06.1998
01.08.1999
01.10.2000
01.12.2001
01.06.2005
01.08.2006
01.04.2011
01.08.2013
01.10.2007
01.12.2008
01.12.1994
01.04.2004
01.02.2010
01.02.1996
Note(s): This graph displays the STOXX Europe Football Index, the EURO
STOXX 50 Index, and the JPMorgan EMU Government Bond Index. All the
Figure 1. indices are denominated on an EUR basis, adjusted for capital actions and
Indices from January
1995 to December 2017
dividends or coupon payments, and set equal to 100 at the beginning of the
sample period. The sample period lasts from January 1995 to December 2017
positive skewness implies rather small losses but larger gains, so it has a long tail on the right-
hand side of the distribution, which is usually preferred by investors. In addition, football
stocks exhibit the highest excess kurtosis. This is an indication of a higher likelihood of an
extreme event compared to the normal distribution (fat tails). Turning to the Jarque–Bera test
statistic, the null hypothesis of a normal distribution must be rejected at the 1% level for the
returns of football and traditional stocks.
For the three upmarket periods, in any period football stocks exhibit the highest standard
deviation and a lower monthly mean return than standard stocks. Remarkably, football
stocks are positively skewed both in the full sample period and in each upmarket period.
Within the two downmarkets, no uniform patterns can be observed.
To obtain a first impression of the diversification properties of football stocks, Table 3
shows the correlation structure between football stocks and traditional stocks and bonds.
During the full sample period, the correlation coefficients between football stocks and
traditional stocks and bonds amount to 0.29 and 0.02, respectively. The full sample period
correlation coefficient of 0.29 might underestimate the recent link between football stocks and
standard stocks. The first upmarket period displays an exceptional negative correlation, but
represents the last century. For the remaining up- and downmarkets, no uniform patterns can
be observed in terms of a rise or fall in the correlation between football stocks and traditional
stocks; the correlation coefficient ranges from 0.40 to 0.54. Comparatively, the correlation
coefficient between football stocks and bonds is always lower and often negative. All in all, the
figures report that the correlation between football stocks and traditional stocks and bonds,
respectively, is relatively low. A reviewer proposed to apply a more demanding benchmark
than a general stock index and analyse the correlation between football stocks and stocks
representing closely related sectors. Again, correlation coefficients are very low, i.e. 0.34 for the
FTSE Eurofirst 300 Media Index and 0.37 for the FTSE Eurofirst Travel and Leisure 300 Index
for the time period 2006–2017. The time series for the STOXX Europe 600 Travel and Leisure
Index was even available for our full sample period and yields a correlation coefficient of 0.27.
Mean SD Minimum Maximum Sharpe ratio SV 90% VaR MDD Skewness Excess kurtosis JB test AC(1) AC(2)
Panel A: Full sample 01/1995–12/2017

Football Stocks 0.30% 6.54% 24.92% 32.84% 0.02 4.29% 6.89 –83.03% 0.64 2.98 121.21*** 0.23** 0.15**
Stocks 0.72% 5.36% 18.64% 15.49% 0.10 4.03% 6.15 –59.90% 0.48 0.89 19.67*** 0.09 0.00
Bonds 0.48% 1.13% 2.82% 4.02% 0.26 0.83% 1.12 –6.58% 0.18 0.20 1.89 0.11** 0.02
Panel B: Up market 01/1995–05/2000
Football Stocks 2.06% 8.69% 0.11% 32.84% 0.20 4.95% 6.78 –49.75% 1.19 1.50 21.49*** 0.25** 0.27**
Stocks 2.47% 5.34% 14.36% 13.69% 0.40 4.05% 3.85 –23.10% 0.69 0.98 7.73** 0.02 0.09
Bonds 0.72% 1.07% 1.76% 3.10% 0.34 0.78% 0.55 –4.56% 0.27 0.45 1.32 0.19 0.14
Panel C: Up market 01/2003–10/2007
Football Stocks 1.25% 4.28% 12.55% 13.88% 0.24 2.94% 3.69 –19.82% 0.08 1.53 5.70* 0.01 0.11
Stocks 1.37% 3.61% 6.29% 14.70% 0.32 2.55% 3.78 –14.42% 0.36 1.99 10.86*** 0.03 0.04
Bonds 0.31% 0.91% 1.6% 2.23% 0.10 0.67% 1.12 –3.08% 0.29 0.81 2.37 0.11 0.22
Panel D: Up market 06/2012–07/2015
Football Stocks 0.23% 5.05% 11.39% 11.91% 0.04 3.49% 6.57 –17.74% 0.07 0.29 0.16 0.10 0.27
Stocks 1.70% 3.48% 5.84% 7.41% 0.49 2.52% 3.38 –5.84% 0.21 0.80 1.28 0.18 0.05
Bonds 0.59% 1.20% 2.57% 2.60% 0.49 0.93% 1.46 –5.49% 0.70 0.09 3.09 0.09 0.03
Panel E: Down market 06/2000–12/2002
Football Stocks 3.54% 4.71% 16.12% 5.89% 0.82 3.56% 8.25 –70.18% 0.55 0.31 1.67 0.04 0.34
Stocks 2.13% 6.93% 18.64% 14.32% 0.35 2.52% 10.12 –56.09% 0.11 0.20 0.11 0.13 0.10
Bonds 0.65% 0.95% 1.29% 2.62% 0.33 0.68% 1.06 –2.22% 0.23 0.21 0.34 0.07 0.07
Panel F: Down market 11/2007–02/2009
Football Stocks 3.00% 7.63% 24.92% 5.77% 0.44 6.04% 9.66 –43.25% 1.38 2.23 8.42** 0.29 0.06
Stocks 4.57% 6.19% 14.66% 6.08% 0.79 4.47% 13.7 –54.21% 0.21 1.13 0.98 0.04 0.38
Bonds 0.57% 1.43% 1.33% 3.88% 0.16 0.91% 1.21 –3.61% 0.60 0.08 0.97 0.16 0.23
Note(s): Football stocks are represented by the STOXX Europe Football Index, stocks by the EURO STOXX 50 Index, and bonds by the JPMorgan EMU Government
Bond Index. All indices are denominated on an EUR basis and adjusted for capital actions and dividends or coupon payments. All numbers are based on discrete monthly
returns in EUR. The Sharpe ratio relates the arithmetic average of the weekly excess return of the index under consideration over the 1-month EUR Libor to the standard
deviation (SD). The semivolatility (SV) only includes negative deviations from the mean. The value-at-risk (VaR) indicates the loss that will not be exceeded with a
probability of 90% within one month. Maximum drawdown (MDD) shows the maximum loss caused by consecutive loss months. The Jarque–Bera test (JB test) checks
whether a variable is normally distributed. */**/*** indicate statistical significance better than 10%/5%/1%, resp. AC (i) displays the autocorrelation coefficient for the lag
of i months
481
Football stocks
Table 2.
statistics
Descriptive return
SBM All results indicate that football stocks might be an asset class of their own and might offer
10,4 attractive diversification properties. This will be investigated in depth in the next section.
5. Results
Table 4 displays pairwise comparisons of Sharpe ratios. In each pair of portfolios, the base
portfolio represents the investment opportunity set without listed European football clubs,
i.e. traditional stocks and bonds only, and is the benchmark for its counterpart, the enhanced
482 portfolio. For the enhanced portfolio, the same portfolio composition rule, e.g. tangent
portfolio, is applied to an investment opportunity set that includes a listed European football
club component in addition to standard stocks and bonds. When the Sharpe ratio of the
enhanced portfolio with a European football stock component is higher than that of its
benchmark base portfolio, this means that adding a European football stock component to a
standard portfolio yielded a more favourable risk-return combination. Furthermore, the
statistical significance of the difference in Sharpe ratios is tested.
When exploring the enhanced portfolios, it makes sense to begin with the portfolio
composition, as only the naı€ve portfolio (NP) definitely includes a football component, with a
weight of one-third. The composition of the remaining three enhanced portfolios is
determined ex post. The investment opportunity set of the enhanced portfolios includes
European football stocks; however, the optimal share of football stocks might be zero percent.
When this happens, this indicates that adding football stocks is not at all useful in achieving a
superior risk-return combination. For the full sample period, two out of the three enhanced
portfolios with ex-post optimization do not include football stocks, and for the enhanced
portfolio that does include football stocks (MVP) the share is as low as 1.91%. The Sharpe
ratio of the enhanced MVP is equal to that of the base MVP. The Sharpe ratio of the enhanced
NP (0.10) is clearly inferior to the base NP’s Sharpe ratio (0.15). Thus, for the full sample
period, including football stocks did not improve performance. At first sight, this is
surprising in view of the remarkably low correlation of 0.29 between football stocks and
standard stocks for the full sample period. However, the advantage of low correlation seems
to be more than undercut by the weak performance of football stocks. They earned even less
than bonds did (0.30 vs. 0.48% per month).
A similar story could be told for the third upmarket period (6/12–7/15). On the other hand,
the first upmarket period, located primarily in the late 1990s, has good prerequisites enabling
Football stocks Stocks Bonds Football stocks Stocks Bonds
Correlation matrix (full sample 01/1995–12/2017) Correlation matrix (up market 06/2012–07/2015)
Football stocks 1.00 0.29 0.02 Football stocks 1.00 0.48 0.36
Stocks 1.00 0.07 Stocks 1.00 0.39
Bonds 1.00 Bonds 1.00
Correlation matrix (up market 01/1995–05/2000) Correlation matrix (down market 06/2000–12/2002)
Stocks 1.00 0.13 Stocks 1.00 0.59
Correlation matrix (up market 01/2003–10/2007) Correlation matrix (down market 11/2007–02/2009)
Stocks 1.00 0.29 Stocks 1.00 0.16
Note(s): Football stocks are represented by the STOXX Europe Football Index, stocks by the EURO STOXX
Table 3. 50 Index, and bonds by the JPMorgan EMU Government Bond Index. All indices are denominated on an EUR
Correlation of monthly basis and adjusted for capital actions and dividends or coupon payments. All numbers are based on discrete
returns monthly returns in EUR
Full sample 01/1995–12/2017 Up market 01/1995–05/2000 Up market 01/2003–10/2007
Portfolios MVP TP NP RP MVP TP NP RP MVP TP NP RP
Base Portfolio
Return 0.49% 0.50% 0.60% 0.60% 0.74% 1.06% 1.59% 1.59% 0.43% 0.64% 0.84% 0.84%
Standard deviation 1.09% 1.10% 2.70% 2.70% 1.06% 1.43% 2.77% 2.77% 0.78% 1.10% 1.71% 1.71%
Sharpe ratio 0.28 0.28 0.15 0.15 0.37 0.50 0.45 0.45 0.27 0.38 0.36 0.36
Weights
Standard stocks 5.40% 8.37% 50.00% 50.00% 1.43% 19.63% 50.00% 50.00% 11.37% 31.19% 50.00% 50.00%
Bonds 94.6% 91.63% 50.00% 50.00% 98.57% 80.37% 50.00% 50.00% 88.63% 68.81% 50.00% 50.00%
Enhanced Portfolio
Return 0.49% 0.50% 0.50% 0.50% 0.77% 1.15% 1.75% 1.75% 0.43% 0.66% 0.98% 0.98%
Sharpe ratio 0.28 0.28 0.10 0.28 0.40 0.56 0.43 0.51 0.27 0.39 0.35 0.36
Weights
Football stocks 1.91% 0.00% 33.33% 0.00% 1.92% 7.62% 33.33% 16.48% 0.00% 6.81% 33.33% 16.22%
Standard stocks 4.69% 8.37% 33.33% 7.79% 1.76% 19.16% 33.33% 46.22% 11.37% 27.42% 33.33% 48.58%
Bonds 93.40% 91.63% 33.33% 92.21% 96.32% 73.23% 33.33% 37.30% 88.63% 65.77% 33.33% 35.20%
F-statistic 0.14 0.00 1.22 5.08 0.50 1.06 0.24 0.99 0.00 0.13 0.19 0.02
p-value 0.94 1.00 0.30 0.00 0.69 0.37 0.87 0.40 1.00 0.94 0.90 1.00
(continued )
483
Football stocks
Table 4.
with significance test

based on Sharpe ratio
Portfolio comparison
10,4
484
SBM
Table 4.
Full sample 01/1995–12/2017 Up market 01/1995–05/2000 Up market 01/2003–10/2007
Portfolios MVP TP NP RP MVP TP NP RP MVP TP NP RP
Base Portfolio
Return 0.59% 0.87% 1.14% 1.14% 0.41% 0.65% 0.74% 0.74% 0.15% 0.57% 2.00% 2.00%
Sharpe ratio 0.50 0.59 0.56 0.56 0.12 0.34 0.34 0.34 0.14 0.17 0.79 0.79
Weights
Standard stocks 0.00% 25.17% 50.00% 50.00% 8.39% 0.00% 50.00% 50.00% 8.10% 0.00% 50.00% 50.00%
Bonds 100.00% 74.83% 50.00% 50.00% 91.61% 100.00% 50.00% 50.00% 91.90% 100.00% 50.00% 50.00%
Enhanced Portfolio
Return 0.59% 0.87% 0.84% 0.84% 0.36% 0.65% 1.67% 1.67% 0.16% 0.57% 2.33% 2.33%
Sharpe ratio 0.50 0.59 0.32 0.59 0.04 0.34 0.65 0.81 0.14 0.17 0.70 0.80
Weights
Football stocks 0.00% 0.00% 33.33% 0.00% 1.80% 0.00% 33.33% 51.87% 5.70% 0.00% 33.33% 3.17%
Standard stocks 0.00% 25.17% 33.33% 22.25% 7.79% 0.00% 33.33% 5.37% 3.86% 0.00% 33.33% 54.24%
Bonds 100.00% 74.83% 33.33% 77.75% 90.4% 100.00% 33.33% 42.76% 90.44% 100.00% 33.33% 42.59%
F-statistic 0.00 0.00 2.34 0.30 0.13 0.00 2.69 4.63 0.01 0.00 0.43 0.05
p-value 1.00 1.00 0.09 0.82 0.94 1.00 0.07 0.01 1.00 1.00 0.74 0.98
Note(s): Football stocks are represented by the STOXX Europe Football Index, standard stocks by the EURO STOXX 50 Index, and bonds by the JPMorgan EMU
Government Bond Index. All indices are denominated on an EUR basis and adjusted for capital actions and dividends or coupon payments. All numbers are based on
discrete monthly returns in EUR. The base portfolio (BP) comprises standard stocks and bonds only. The investment opportunity set of the enhanced portfolio (EP) also
includes football stocks. Four portfolio composition rules are applied to BP as well as to the corresponding EP: the minimum variance portfolio (MVP), the tangent portfolio
(TP), the naı€ve portfolio (NP), and the naı€ve return portfolio (RP). Weights display the portfolio composition. The p-value relates to the difference between the Sharpe ratio
of the BP and that of the corresponding EP.
football stocks to demonstrate their diversification properties. The correlation coefficient Football stocks
between standard stocks and football stocks is negative (0.12), and the return of football
stocks (2.06%) is only slightly lower than that of standard stocks (2.47%) but much higher
than the bonds return (0.72%). Indeed, football stocks are part of all four enhanced portfolios.
For the three ex ante optimized portfolios, the Sharpe ratio of the enhanced portfolio exceeds
that of the corresponding base portfolio. The difference is not statistically significant but is of
economic relevance for an investor (ranging between 0.03 and 0.06). Only the enhanced NP
yields a slightly lower Sharpe ratio than the base NP. The prerequisites are different for the 485
second upmarket period (1/03–10/07). The relative returns for all three kinds of assets are
similar to that of the first upmarket period, but the correlation coefficient between standard
stocks and football stocks amounts to 0.45 instead of 0.12. Accordingly, football stocks are
only represented in two out of three ex-post determined enhanced portfolios, and there are no
relevant differences in the Sharpe ratios.
Turning now to the two downmarket periods (6/00–12/02 and 11/07–2/09), aside from the
enhanced TP in both periods, football stocks are included in all enhanced portfolios. In the
first downmarket, the risk-return performance of enhanced portfolios including football
stocks is inferior in all three cases. In the second downmarket, where football stocks had a
performance advantage compared to standard stocks (3.00% vs. 4.57%), Sharpe ratios
between the base portfolio and its enhanced portfolio are almost alike for the three ex-post
optimized portfolios. For the NP, the performance advantage of the enhanced portfolio is not
statistically significant but at least economically relevant (Sharpe ratio of 0.70 vs. 0.79). In
sum, only one out of the eight pairwise portfolio comparisons in the two downmarkets
supports the hypothesis that adding football stocks to a standard portfolio makes it more
risk-return efficient.
Last, we implemented an unreported robustness check suggested by a second reviewer.
As football stocks are small cap stocks, we repeated the calculations using the MSCI Europe
Investable Market Index (IMI) comprising large, mid- and small cap stocks as another proxy
of the European stock market instead of the EURO STOXX 50 Index, which only covers large
cap stocks. Within the robustness check, the results did not change substantially. (For the
sake of brevity, we make the respective results available upon request from the authors.)
6. Discussion
Hypothesis 1 claims that football stock returns differ from standard stock returns. Sharpe
(1992) does not prescribe numerical thresholds, e.g. an upper limit of the correlation
coefficient that an asset must satisfy in order to be considered an asset class of its own.
However, in view of low correlation coefficients with standard stocks (0.29) and with closely
related business sectors (media, and travel and leisure), it seems plausible to claim that the
figures support hypothesis 1. Our findings are in line with previous empirical research by
Aglietta et al. (2010), Gomez-Martınez et al. (2017), Lehmann and Weigand (1998), and Prigge
and Tegtmeier (2019). They are also consistent with developments in the European football
sector, as reflected in the accounting figures (Boccia, 2018; Boccia and Santomier, 2018; Uefa,
2019), and with the strand of literature that ascribes a specific bidding behaviour to some
holders of football stocks, which might further contribute to decoupling football stock returns
from standard stock returns (see the discussion above). Thus, our analysis supports the view
that football stocks could be regarded as a separate asset class.
While the results of hypothesis 1 can be seen as confirming extant analyses reframed in
Sharpe’s (1992) ‘new asset’ framework, hypothesis 2 deals with an open question. Extant
research does not provide a definite ex ante answer as to which of the two opposing forces is
stronger: The concept of football stocks being an asset class of their own makes it likely that
their integration in well-diversified portfolios enables one to reach more efficient risk-return
SBM combinations because of the football stocks’ risk profile. However, the returns of football
10,4 stocks are weak. They are lower than those of the standard stocks for the whole sample
period and for all sub-periods except one. Thus far, our results confirm those of Aglietta et al.
(2010) and Prigge and Tegtmeier (2019). They are also in line with Buchholz and Lapotta
(2017), who classified 60.3% of the clubs as being majority-owned by sporting investors who
do not focus on the financial performance of their stake in the club because they generate
other benefits from owning a successful football club. This owner group could be assumed to
486 be willing to pay higher prices for football club shares, leading to low share returns.
As for which of the two opposing effects is stronger, our findings leave no doubt: The
weak returns destroy the attractive correlation properties. There is little evidence in our
results in favour of adding football stocks to a well-diversified portfolio.
Our results may appear to be a simple update and confirmation of Aglietta et al. (2010),
particularly because they also apply the Sharpe ratio. Aglietta et al. (2010) calculate Sharpe
ratios of 0.01, 0.20, and 0.86 for the STOXX Europe Football Index, the EURO STOXX 50,
and the Merrill Lynch EMU Government Index, respectively, for the period from 1991 to 2009.
Please note that their approach considers diversification effects only within the three indices
they analyse, but not between them. They do take into account the diversification effect
among the football stocks in the index portfolio. Thus, club-specific risks should have been
diversified to a great extent. This effect is quite substantial (Prigge and Tegtmeier, 2019).
However, the analysis of Aglietta et al. (2010) does not include the diversification effect
between a diversified portfolio of football stocks, such as the index and other assets. This
effect is captured in our analysis. In other words, although our analytical framework
considers the potential diversification properties of football stocks in their entirety, which is
still not enough to compensate for their weak return.
Generally, our study adds new empirical evidence to the body of research that found that
football stocks are a market segment that differs from the general market (see the discussion
in section 2). There appear to be specific kinds of investors whose investment calculation
includes more than simply dividends and changes in share price. The stock attracts a special
clientele (Rohde and Breuer, 2017). For those investors who do not earn some kind of extra
benefit from holding football stock, such as strategic investors, patron investors, and fan
investors, the market is not attractive because the stocks are overvalued, according to
standard valuation principles (Prigge and Tegtmeier, 2019). Overvaluation is not
overcompensated by the risk properties of this new asset class, although the risk
properties themselves are considered attractive. Therefore, it is no surprise that institutional
investors lost interest in this market segment soon after its establishment (Walters and
Hamil, 2010; Wilson et al., 2013).
7. Conclusion
7.1 Results and contribution
Building on the extant literature on football stock returns, the research on football investor
types, and the strong growth in earnings in the professional football sector that seems to be
decoupled from the general business cycle, this article establishes and tests two hypotheses.
In line with previous research, we find support for the first hypothesis that football stock
returns are only loosely related to standard stock returns. Thus, football stocks can be called a
separate asset class, according to Sharpe (1992). The low correlation is an apt prerequisite
that the addition of football stocks to a well-diversified portfolio might allow investors to
achieve more efficient risk-return combinations. Nevertheless, the second hypothesis must be
rejected because the weak performance of football stocks destroys their advantage of low
correlation.
Our study, particularly hypothesis 2, contributes to research on listed football stocks. To
the best of our knowledge, this is the first study to analyse the risk-return efficiency of
football stocks from the perspective of a pure financial investor, i.e. an investor not earning Football stocks
side benefits from owning football stocks, such as strategic investors or fan investors. Our
findings are consistent with the extant literature in that they point out that the segment of
listed football stocks seems to play, at least partly, according to its own rules. As an indirect
contribution, this underlines the relevance of further research on investor types interested in
football stocks, which would be highly useful for club managers and is discussed in greater
detail next.
487
7.2 Managerial implications
Since opportunities for future research can be directly derived from managerial implications,
we begin with the latter. Football clubs might be happy about their current status of assumed
overvaluation because this would mean lower cost of capital. However, this might be
deceiving. As long as we assume shareholder rationality, shareholders can be expected to
demand extra benefits that compensate for the inferior return from dividends and share price
appreciation. Providing these extra benefits comes at a cost for the clubs. The cost of the extra
benefits provision must be added to the traditional cost of equity to calculate the real cost of
equity. From the perspective of football club managers, the tasks are to (1) identify which
different kinds of extra benefits are in demand by football investors, (2) determine the club’s
production costs of these extra benefits and (3) address potential investors who favour the
kinds of extra benefits the club can produce at comparatively low costs so that the real cost of
funding, including the extra benefits, can be minimized. As a fourth step, one could consider
whether the real cost of equity differs for different equity instruments, such as ordinary
shares with voting rights compared to preference shares without voting rights.
To make these abstract considerations more specific, we discuss some illustrative
examples. Let us assume a club with a fan and member base that favours participation and
engagement opportunities in club policy and is rather critical towards commercialization in
football. For such a club, the extra cost of capital would be rather high if it makes, for instance,
an international soft drink giant or an international businessman with no previous
connection to the club its dominant shareholder. Members and fans would begin protesting,
stadium attendance would go down and the club’s brand value would decrease. For such a
club, funding from wealthy local businessmen or from fans and members would be cheaper in
terms of true cost of equity. As a second example, equity investments in clubs by equipment
providers are common, e.g. Adidas and Puma in Bayern Munich and Borussia Dortmund,
respectively. It might be more advantageous for a club to obtain equity funding from pure
financial investors than from the main equipment provider. This is because in the former
scenario, i.e. pure financial investors, the club could auction off the position of main
equipment provider and might earn higher revenues that would more than compensate for
the higher cost of capital of the funding obtained from the pure financial investors.
All in all, this is a profiling and matching task. The managers must profile potential
investors and their specific needs and must profile their own club in terms of its production
costs for these extra benefits. With such profiles at hand, club managers would be well placed
to find potential matching investors who require extra benefits that lead to a minimum cost of
equity (similarly, see Huth, 2019, p. 15, regarding small fan investors).
Some clubs might possibly be happy if institutional investors evinced greater interest in
football shares because these investors would not seek these extra benefits. At least this
would apply to those clubs for which the package of capital funding plus additional benefits
leads to an overly high effective cost of capital, i.e. cost of capital including the costs of extra
benefits for shareholders. New club IPOs could revive the institutional shareholders’ interest
in football stocks, thus expanding the market segment of listed football stocks. Institutional
investors withdrew from that market segment in the 1990s. However, the football sector has
changed and grown tremendously since then; European football has even become profitable
SBM recently (Uefa, 2019). Thus, institutional investors might be interested to return and
10,4 participate in this development. Consequently, one managerial implication for institutional
investors would be to explain to the clubs that there might be hidden costs when issuing
shares to other investors, costs that are much lower or even non-existent when shares are
issued to institutional investors without side interests.
7.3 Research implications, limitations, and opportunities for future research

488 Profiling and matching were identified as the main tasks of club managers, though such
knowledge would also be relevant for equity providers. These tasks would profit from the
availability of relevant research. Our discussion of research opportunities begins with
investor profiles. There is already a stock of literature on investor typologies (see discussion
and references above). However, even rather recent research, such as Buchholz and Lopatta
(2017, p. 522), calls for a more disaggregated exploration and classification of football investor
types and their motives, implying that their dichotomy of economic and sporting investors
needs further refinement. In fact, it seems plausible that defining a few investor prototypes is
merely a stop-over on the way to a much richer trait-based classification scheme. If, for
instance, research finds that five qualities of football investors are of particular importance
and that each quality exists either in a low, intermediate, or strong form (though continuous
scales would be more plausible), this would already lead to 35 5 243 different profiles. There
is great demand from the football industry for research on such a trait-based scheme to profile
football investors. The search for relevant traits and which form they might take should be
based on extensive analysis of actual football investors, as proposed by Buchholz and
Lopatta (2017). In addition to document analyses, questionnaires, such as the one distributed
by Bauers and Hovemann (2019a) among football investors in German clubs, would be an
appropriate approach. Not surprisingly, they found that one important trait might be how
much importance investors attach to influencing club policy.
Moreover, this research should exploit already existing concepts as much as possible.
Such search should not be limited to the football context, but should also try to borrow and
adapt concepts from other fields. One reviewer recommended applying entrepreneurship
theories to football investments. Ratten (2018, p. 13) defines sports entrepreneurship as ‘the
exploitation of opportunities within the sports sector to create change’. As entrepreneurial
examples in the football context, Ratten (2010, p. 561) mentions stadium naming rights and
the introduction of luxury suite boxes. In a recent surveying publication, Ratten (2018, p. 8)
states that ‘entrepreneurship research in sport is a young phenomenon with little collective
knowledge developed by scholars’. Nevertheless, entrepreneurship concepts could become
valuable for developing football investor profiles. Applications to strategic investors such as
Red Bull (see Bauers et al., 2015, pp. 7–8, on RB Leipzig) seem to be particularly promising.
The socio-emotional wealth (SEW) concept developed in family business research could
also be a rewarding loan from another field. Going back to initial research by Gomez-Mejıa
et al. (2007), SEW could be described as the ‘nonfinancial aspects or ‘affective endowments’ of
family owners’ (Berrone et al., 2012, p. 259), or, more simply, as the wealth the family owners
derive from ownership in addition to the financial aspects. Within only a few years, the SEW
concept has become a cornerstone of family business research. A recent editorial in the most
prestigious family business research journal noted the idea of transferring the SEW concept
from the family sphere to ‘non-family-based SEW to socially mandated organizations (e.g.
charity, religious, disease-oriented organizations)’ (Brigham and Payne, 2019, p. 327). The
SEW approach could have a good fit with wealthy local businesspeople as investors in their
home club. The term pleasure or trophy assets (Deloitte, 2014, p. 12) might also contribute to
further developing this idea.
Turning to small fan shareholders, recent research by Huth (2018a, 2018b, 2019) could be
used as a starting point for identifying relevant traits. He found that club attachment, income,
age, and nationality were related to willingness to invest. His results also provide indications Football stocks
as to which fan investor traits matter whether they require a financial return on their
investment.
In addition to investor profiles, the second major ingredient for the proposed matching
process is the club profile. Research should explore which club traits matter, i.e. affect side
benefits production costs, and thus these should be components of the club profile, which
should correspond to the setup of the investor profile. A strong candidate for inclusion into
the club profile is the power structure within the club and whether it allows the investor to 489
achieve a dominant position. This depends on the legal form of the club, e.g. corporation or
members’ association, and on league regulations, such as the 50 þ 1 rule in Germany (Bauers
and Hovemann, 2019a). The power of members and fans, the tradition of fan involvement, and
the attitude towards commercialization can also be expected to be relevant to the club profile.
Recent surveys (Bauers and Hovemann, 2019b; Bauers et al., 2020) have revealed the major
relevance of such issues in Germany. However, one might expect this to differ from club to
club and possibly from country to country. This part of the club traits profile development
should be closely linked to the stakeholder discussion (see, for example, Anagnostopoulos,
2011; Senaux, 2008) and to the club objective discussion (Madden, 2012; Sloane, 1971; see
Rohde and Breuer, 2018, for a recent summary of the club objective discussion). In addition, of
course, financials matter, such as the allocation of TV earnings among clubs (Beech, 2018,
p. 138; Ramchandani et al., 2018), the financial consequences of relegation (Wilson et al., 2018),
and salary caps (Maxcy and Milwood, 2018) as well as the peculiar nature of professional
team sports in general (Gratton, 2000; Neale, 1964).
In regard to the fine-tuning in the matching process between investor and club, the various
characteristics of financing instruments might become relevant to accommodating the
interests of both parties. In addition to listed shares that were at the centre of our empirical
analysis, one could also think of fan bonds (see, e.g. Weimar and Fox, 2012; Huth et al., 2014)
or crowdfunding vehicles (see, e.g. Fox, 2016), for example, as further investment vehicles. A
club in the legal form of a corporation could issue different share classes variously equipped
with voting rights. This could be used to design the club’s power structure. See in this context,
for example, the current discussion on dual- or even tri-class stock structures in stock market
giants such as Alphabet or Facebook (see, e.g. Bebchuk and Kastiel, 2018). Entrepreneurial
activities leading to financial innovation might also be initiated by clubs. An example is the
Second Bundesliga club FC St. Pauli in Germany. They are currently discussing plans to
collect equity from fans and members by setting up a cooperative, thus avoiding outsourcing
and incorporating the professional football department (for details, see Prigge, 2019). This
financial structure would take into account the strongly critical view of St. Pauli’s fans on
commercialization and investors (club traits). Generally, there is a research gap that could be
addressed using a comparative analysis of how instruments in football financing relate to the
needs of specific club and investor profiles.
Another interesting research question stems from the basic idea proposed above that the
side benefits many investor types derive from football stock ownership might come at a cost
to the club. Club managers require concepts to calculate the hidden cost of equity to obtain an
accurate idea of the real cost of capital. In some settings, a transaction becomes a related-
party transaction because, e.g. the equipment provider is also a shareholder who is
represented on the board. The problem of prices in related-party transactions not being
necessarily in line with market terms among independent parties has already been addressed
in the football context as part of Uefa Financial Fairplay. It is also a major issue in the Second
Shareholder Rights Directive of the European Union passed by European bodies in 2017.
Thus, football research could forge a link to research in this area to further the estimates of
the hidden costs of such transactions. From another perspective, having a certain large
shareholder might rule out other business opportunities for the club, i.e. reduce its business
SBM options. Real option valuation (e.g. Brealey et al., 2011, pp. 561–579) might be another
10,4 promising tool with which to estimate the cost-of-equity effect of certain investors.
Last, one further research opportunity should be mentioned. In this paper, we investigate
whether the stocks of listed football clubs can be considered an asset class of their own and
examine their diversification benefits. An analysis of the risk-return characteristics of other
investment vehicles in football, such as fan bonds or crowdfunding vehicles, would be of
interest for future investigations. However, this requires that reliable data in the form of a
490 performance index be available for these investment vehicles. The availability of such indices
would then make it possible to incorporate fan bonds or crowdfunding vehicles into the
framework of modern portfolio theory.
References
Admati, A.R. and Pfleiderer, P. (2000), “Forcing firms to talk: financial disclosure regulation and
externalities”, Review of Financial Studies, Vol. 13 No. 3, pp. 479-519.
Aglietta, M., Andreff, W. and Drut, B. (2010), “Floating European football clubs in the stock market”,
working paper 2010-14, University of Paris West-Nanterre la Defense, EconomiX, Nanterre.
Anagnostopoulos, C. (2011), “Stakeholder management in Greek professional football: identification
and salience”, Soccer and Society, Vol. 12 No. 2, pp. 249-264.
Andreff, W. (2007), “French football: a financial crisis rooted in weak governance”, Journal of Sports
Economics, Vol. 8 No. 6, pp. 652-661.
Bachmann, C., Tegtmeier, L., Gebhardt, J. and Steinborn, M. (2019), “The ‘sell in May’ effect: an
empirical investigation of globally listed private equity markets”, Managerial Finance, Vol. 45
No. 6, pp. 793-808.
Bauers, S.B. and Hovemann, G. (2019a), “Stakeholderorientierte Perspektiven in der sportpolitischen
Diskussion von beherrschendem Einfluss im deutschen Profifußball–Empirische Ergebnisse
einer Befragung von Investoren_innen zur 50þ 1-Regel und deren Zukunft”, FuG–Zeitschrift
f€ur Fußball und Gesellschaft, Vol. 1 No. 1, pp. 25-45.
Bauers, S.B. and Hovemann, G. (2019b), “Regulation von beherrschendem Einfluss im deutschen
Profifußball–Eine empirische Vergleichsanalyse von Faninteressen der Jahre 2011 und 2017”,
Sport und Gesellschaft–Sport and Society, Vol. 16 No. 2, pp. 155-180.
Bauers, S.B., Lammert, J. and Hovemann, G. (2015), “Beherrschender Einfluss von Investoren im
deutschen Profifußball – eine Bestandsaufnahme und Analyse bestehender Umgehungen der
50þ1-Regel”, Sciamus – Sport und Management, Vol. 6 No. 3, pp. 1-17.
Bauers, S.B., Lammert, J., Faix, A. and Hovemann, G. (2020), “Club members in German professional
football and their attitude towards the ‘50þ 1 Rule’–A stakeholder-oriented analysis”, Soccer
and Society, Vol. 21 No. 3, pp. 274-288.
Bebchuk, L.A. and Kastiel, K. (2018), “The perils of small-minority controllers”, The Georgetown Law
Journal, Vol. 107 No. 6, pp. 1453-1514.
Beech, J. (2018), “Football’s failing finances”, in Dodds, M., Heisey, K. and Ahonen, A. (Eds), Routledge
Handbook of International Sport Business, Routledge, Abingdon and New York, pp. 135-145.
Bell, A.R., Brooks, C., Matthews, D. and Sutcliffe, C. (2012), “Over the moon or sick as a parrot? The
effects of football results on a club’s share price”, Applied Economics, Vol. 44 No. 26, pp. 3435-3452.
Berrone, P., Cruz, C. and Gomez-Mejia, L.R. (2012), “Socioemotional wealth in family firms: theoretical
dimensions, assessment approaches, and agenda for future research”, Family Business Review,
Vol. 25 No. 3, pp. 258-279.
Birkh€auser, S., Kaserer, C. and Urban, D. (2019), “Did UEFA’s financial fair play harm competition in
European football leagues?”, Review of Managerial Science, Vol. 13 No. 1, pp. 113-145.
Boccia, A.A. and Santomier, J. (2018), “Football and Finance”, Presentation Delivered at the 26th Annual
Conference of the European Association for Sport Management (EASM), Malm€o, September.
Boccia, A.A. (2018), Football and Finance: Exploring the Capital Markets, September. Football stocks
Brealey, R., Myers, S.C. and Allen, F. (2011), Principles of Corporate Finance, 10th ed., Global Edition,
McGraw-Hill/Irwin, New York.
Brigham, K.H. and Payne, G.T. (2019), “Socioemotional wealth (SEW): questions on construct
validity”, Family Business Review, Vol. 32 No. 4, pp. 326-329.
Buchholz, F. and Lopatta, K. (2017), “Stakeholder salience of economic investors on professional
football clubs in Europe”, European Sport Management Quarterly, Vol. 17 No. 4, pp. 506-530. 491
Capasso, A. and Rossi, M. (2013), “Systemic value and corporate governance: exploring the case of
professional football teams”, Business Systems Review, Vol. 2 No. 2, pp. 216-236.
Çelik, S. and Isaksson, M. (2013), “Institutional investors and ownership engagement”, OECD Journal:
Financial Market Trends, Vol. 2013 No. 2, pp. 93-114.
Chemnitzer, F., Leißle, N. and Quitzau, J. (2015), “Finanzierung im Profifußball. Anleihen, Investoren,
M€azene & Co”, available at: https://www.berenberg.de/files/MacroNews/150121_BERENBERG
%20MAKRO_Trends_Finanzierung_im_Profifussball_final.pdf (accessed 19 December 2019).
de Fontenay, E. (2017), “The deregulation of private capital and the decline of the public company”,
Hastings Law Journal, Vol. 68 No. 3, pp. 445-502.
Dechant, T. and Finkenzeller, K. (2013), “How much into infrastructure? Evidence from dynamic asset
allocation”, Journal of Property Research, Vol. 30 No. 2, pp. 103-127.
Deloitte (2014), A Premium Blend. Annual Review of Football Finance–Highlights.
Deloitte (n.d.), Revenue of the Biggest (Big Five*) European Soccer Leagues from 1996/97 to 2017/18
(In Million Euros), Statista—The Statistics Portal, available at: (accessed 27 March 2018).
Demir, E. and Rigoni, U. (2017), “You lose, I feel better: rivalry between soccer teams and the impact of
schadenfreude on stock market”, Journal of Sports Economics, Vol. 18 No. 1, pp. 58-76.
D€opke, J. and Tegtmeier, L. (2018), “Global risk factors in the returns of listed private equity”, Studies
in Economics and Finance, Vol. 35 No. 2, pp. 340-360.
Duque, J. and Abrantes Ferreira, N. (2005), “Explaining share price performance of football clubs listed
on the Euronext Lisbon”, working paper, Technical University of Lisbon, Lisbon.
Findikçi, M. and Tapşin, G. (2015), “A panel data analysis of the relationship between league
performance and the shares of the publicly-traded football clubs”, European Scientific Journal
ESJ, Vol. 11 No. 10, pp. 334-349.
Fox, A. (2016), “Crowdfunding - eine Alternative f€
ur professionelle Fußballclubs?”, Corporate Finance,
Vol. 7 No. 11, pp. 403-408.
Gibbons, M.R., Ross, S.A. and Shanken, J. (1989), “A test of the efficiency of a given portfolio”,
Econometrica, Vol. 57 No. 5, pp. 1121-1152.
Gomez-Martınez, R., Prado-Roman, C. and Moreno, R.M. (2017), “Investing in shares of Europe football

clubs: definitely, an alternative investment”, in Peris-Ortiz, M., Alvarez-Garcıa, J. and Del Rıo,
M.D.L.C. (Eds), Sports Management as an Emerging Economic Activity, Springer, Cham,
pp. 183-192.
Gomez-Mejıa, L.R., Haynes, K.T., N un~ez-Nickel, M., Jacobson, K.J. and Moyano-Fuentes, J. (2007),
“Socioemotional wealth and business risks in family-controlled firms: evidence from Spanish
olive oil mills”, Administrative Science Quarterly, Vol. 52 No. 1, pp. 106-137.
Gratton, C. (2000), “The peculiar economics of English professional football”, Soccer and Society, Vol. 1
No. 1, pp. 11-28.
Greer, R.J. (1997), “What is an asset class, anyway?”, Journal of Portfolio Management, Vol. 23 No. 2,
pp. 86-91.
Grelck, M.B., Prigge, S., Tegtmeier, L. and Topalov, M. (2017), “The attractiveness of investments in
listed German family firms: reality or deception caused by indexes applying backtest data?”,
Journal of Investing, Vol. 26 No. 4, pp. 89-104.
SBM ubner, R., Schwaiger, M.S. and Winkler, G. (2004), “Indirekte Immobilienanlagen im
H€
Portfoliomanagement am Beispiel des deutschen Marktes”, Financial Markets and Portfolio
10,4 Management, Vol. 18 No. 2, pp. 214-234.
Huss, M. and Zimmermann, H. (2012), “Listed private equity: a genuine alternative for an alternative
asset class”, in Cumming, D. (Ed.), The Oxford Handbook of Private Equity, Oxford University
Press, New York, pp. 579-610.
uhr, C. (2014), “Fananleihen deutscher Fußballunternehmen—eine empirische
Huth, C., Gros, M. and K€
492 Untersuchung des Anlageverhaltens der Zeichner”, Corporate Finance, Vol. 5 No. 1, pp. 7-16.
Huth, C. (2018a), “Back to traditional stadium names”, Sport, Business and Management: International
Journal, Vol. 8 No. 3, pp. 89-104.
Huth, C. (2018b), “Crowdfunding in sports”, German Journal of Exercise and Sport Research, Vol. 48
No. 2, pp. 293-298.
Huth, C. (2019), “Who Invests in financial instruments of sport clubs? An empirical analysis of actual
and potential individual investors of professional European football clubs”, European Sport
Management Quarterly.
uckeberg, S. and Scholz, P. (2019), “Cryptocurrencies as an asset class?”, in Goutte, S., Guesmi, K. and
Kr€
Saadi, S. (Eds), Handbook: Cryptofinance and Mechanism of Exchange, Springer, Cham, pp. 1-28.
Leach, S. and Szymanski, S. (2015), “Making money out of football”, Scottish Journal of Political
Economy, Vol. 62 No. 1, pp. 25-50.
Lehmann, E. and Weigand, J. (1998), “Wieviel Phantasie braucht die Fußballaktie?”, Working paper,
Th€
unen-Series of Applied Economic Theory (No. 16), Institut f€ ur Volkswirtschaftslehre
Universit€at Rostock, Rostock.
Lintner, J. (1965), “The valuation of risk assets and the selection of risky investments in stock
portfolios and capital budgets”, The Review of Economics and Statistics, Vol. 47 No. 1, pp. 13-37.
Madden, P. (2012), “Fan welfare maximization as a club objective in a professional sports league”,
European Economic Review, Vol. 56 No. 3, pp. 560-578.
Majewski, S. (2014), “Modelling of football companies’ rates of return according to sport results and
bookmakers’ expectations on the example of Series A”, Business and Economic Horizons,
Vol. 10 No. 3, pp. 214-222.
Markowitz, H.M. (1952), “Portfolio selection”, The Journal of Finance, Vol. 7 No. 1, pp. 77-91.
Maxcy, J. and Milwood, P. (2018), “Regulation by taxes or strict limits: managing profits in American
professional team sport leagues”, Sport, Business and Management: International Journal, Vol. 8
No. 1, pp. 52-66.
Millward, P. (2013), “New football directors in the twenty-first century: profit and revenue in the
English Premier League’s transnational age”, Leisure Studies, Vol. 32 No. 4, pp. 399-414.
Morrow, S. (2017), “Football, economics and finance”, in Hughson, J., Moore, K., Spaaij, R. and
Maguire, J. (Eds), Routledge Handbook of Football Studies, Paperback 2019, Routledge, London
and New York, pp. 163-175.
Mossin, J. (1966), “Equilibrium in a capital asset market”, Econometrica, Vol. 34 No. 4, pp. 768-783.
Neale, W.C. (1964), “The peculiar economics of professional sports”, Quarterly Journal of Economics,
Vol. 78 No. 1, pp. 1-14.
OECD (2019), OECD Factbook Corporate Governance 2019.
€
Ozdurak, C. and Ulusoy, V. (2013), “Moneyball in the Turkish Football League: a stock behavior
analysis of Galatasaray and Fenerbahce based on information salience”, Journal of Applied
Finance and Banking, Vol. 3 No. 4, pp. 1-12.
Palomino, F., Renneboog, L. and Zhang, C. (2009), “Information salience, investor sentiment, and stock
returns: the case of British soccer betting”, Journal of Corporate Finance, Vol. 15 No. 3,
pp. 368-387.
Platanakis, E., Sakkas, A. and Sutcliffe, C. (2019), “Harmful diversification: evidence from alternative Football stocks
investments”, The British Accounting Review, Vol. 51 No. 1, pp. 1-23.
Prigge, S. (2019), “Das Genossenschaftsmodell des FC St. Pauli - eine erste W€ urdigung”, in
Grundmann, S., Merkt, H. and M€ ulbert, P.O. (Eds), Festschrift f€
ur Klaus J. Hopt zum 80.
Geburtstag, de Gruyter, Berlin, Forthcoming.
Prigge, S. and Tegtmeier, L. (2019), “Market valuation and risk profile of listed European football
clubs”, Sport, Business and Management: International Journal, Vol. 9 No. 2, pp. 146-163.
493
Prigge, S. and V€opel, H. (2014), Zur Diskussion: Investoren und M€azene im Fußball, HWWI
Standpunkt, No. 236, 19 February.
Ramchandani, G., Plumley, D., Boyes, S. and Wilson, R. (2018), “A longitudinal and comparative
analysis of competitive balance in five European football leagues”, Team Performance
Management: International Journal, Vol. 24 Nos 5/6, pp. 265-282.
Ratten, V. (2010), “Developing a theory of sport-based entrepreneurship”, Journal of Management and
Organization, Vol. 16 No. 4, pp. 557-565.
Ratten, V. (2018), Sport Entrepreneurship: Developing and Sustaining an Entrepreneurial Sports
Culture, Springer, Cham.
Rohde, M. and Breuer, C. (2017), “The market for football club investors: a review of theory and
empirical evidence from professional European football”, European Sport Management
Quarterly, Vol. 17 No. 3, pp. 265-289.
Rohde, M. and Breuer, C. (2018), “Competing by investments or efficiency? Exploring financial and
sporting efficiency of club ownership structures in European football”, Sport Management
Review, Vol. 21 No. 5, pp. 563-581.
ugungsrechten und die Governance von Fußballunternehmen: eine
Ruoss, K. (2009), Allokation von Verf€
empirische Analyse unter institutionen€okonomischen Aspekten, Rainer Hampp Verlag, Munich
and Mering, Vol. 24.
Saraç, M. and Zeren, F. (2013), “The effect of soccer performance on stock return: empirical evidence
from ‘the big three clubs’ of Turkish soccer league”, Journal of Applied Finance and Banking,
Vol. 3 No. 5, pp. 299-314.
Senaux, B. (2008), “A stakeholder approach to football club governance”, International Journal of
Sport Management and Marketing, Vol. 4 No. 1, pp. 4-17.
Sharpe, W.F. (1964), “Capital asset prices: a theory of market equilibrium under conditions of risk”,
The Journal of Finance, Vol. 19 No. 3, pp. 425-442.
Sharpe, W.F. (1992), “Asset allocation: management style and performance measurement”, Journal of
Portfolio Management, Vol. 18 No. 2, pp. 7-19.
Sloane, P.J. (1971), “The economics of professional football: the football club as a utility maximizer”,
Scottish Journal of Political Economy, Vol. 18 No. 2, pp. 121-146.
St€ockl, S. and Schulz, M. (2007), “Sportive Success and Share Price: die Abh€angigkeit der
Aktienkursentwicklung vom sportlichen Erfolg am Beispiel der Borussia Dortmund GmbH &
Co. KGaA”, Finanz Betrieb, Vol. 9 No. 3, pp. 155-158.
Sun, T. and Wu, M. (2015), “Stock market reaction to news: evidence from Juventus revisited”,
European Scientific Journal, ESJ, Vol. 11 No. 10, pp. 20-34.
Teichmann, K. (2007), Strategie und Erfolg von Fußballunternehmen, Deutscher Universit€ats-Verlag,
Wiesbaden.
Uefa (2019), Annual Report 2017/18.
Walters, G. and Hamil, S. (2010), “Ownership and governance”, in Hamil, S. and Chadwick, S. (Eds),
Managing Football: An International Perspective, Elsevier, Amsterdam et al., pp. 17-36.
SBM Weimar, D. and Fox, A. (2012), “Fananleihen als Finanzierungsm€oglichkeiten von Sportclubs? Eine
Bestandsaufnahme am Beispiel der Fußballbundesliga”, Corporate Finance biz, Vol. 3 No. 4,
10,4 pp. 181-187.
Wilson, R., Plumley, D. and Ramchandani, G. (2013), “The relationship between ownership structure
and club performance in the English Premier League”, Sport, Business and Management:
International Journal, Vol. 3 No. 1, pp. 19-36.
Wilson, R., Ramchandani, G. and Plumley, D. (2018), “Parachute payments in English football:
494 softening the landing or distorting the balance?”, Journal of Global Sport Management, Vol. 3
No. 4, pp. 351-368.
Yueh, L. (2014), Why on Earth Buy a Football Club?, BBC, 27 February 2014, available at: https://www.
bbc.com/news/business-26365955 (accessed 13 December 2019).
Zuber, R.A., Yiu, P., Lamb, R.P. and Gandar, J.M. (2005), “Investor–fans? An examination of the
performance of publicly traded English Premier League teams”, Applied Financial Economics,
Vol. 15 No. 5, pp. 305-313.
Corresponding author
Stefan Prigge can be contacted at: stefan.prigge@hsba.de
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com

Football Stocks

Uploaded by

Copyright:

Available Formats

You might also like

Football Stocks

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Football Stocks

Uploaded by

Copyright:

Available Formats

The current issue and full text archive of this journal is available on Emerald Insight at:

Football stocks: a new asset class Football stocks

2. Theoretical background and hypotheses

2.2 Diversification properties hypothesis

wi ≥ 0 ðno short sellingÞ (3) 477

wi ≥ 0 ðno short sellingÞ (7)

10,4 wi rRP ¼ rNP (9)

478 wi ≥ 0 ðno short sellingÞ (11)

with SRBP Sharpe ratio of the base portfolio

with T Number of observations

Panel A: Full sample 01/1995–12/2017

Football stocks Stocks Bonds Football stocks Stocks Bonds

with significance test

7.3 Research implications, limitations, and opportunities for future research

You might also like