Football Club Share Prices: Exploring the Worth of Club Ownership and Fan Investment Experience

Exploring the Worth of Club Ownership: A Deeper Dive into the Fan Investment Experience

When it comes to supporting a football team, there are many ways in which you can gain a closer affinity with your heroes. If it is not the season ticket you have purchased, it is the merchandise you will adorn over the course of the season.

While if you do not have a season ticket to hand, then an expensive subscription for the channel or channels that screen the matches is likely to be the next level of expenditure. The relationship between club and fan is certainly symbiotic, but what if it could be stronger?

The strongest way to show your love for a club is arguably to own a piece of it and although rich superfans outright own some outfits, this scenario usually means the ownership of shares in your favoured sporting institution.

Something that can be facilitated in several clubs across Europe but is such an investment worthwhile when you consider the expenditure that is required. That is something we are now going to take a deeper dive into.

Rather surprisingly there are only 13 clubs that currently find themselves on stock exchanges across the world which means it is rather slim pickings for those supporters who want to invest in their favourite clubs.

While the highest profile of this select group is arguably Manchester United and with the sale of the Old Trafford outfit being nothing short of protracted, it has at least seen the share price more than double in the past 12 months.

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Even though United ply their trade in the English Premier League, it is the New York Stock Exchange where they are found when it comes to financial trading and whereas a share was worth just over $10 in June 2022, that same commodity is now worth $24 a year later.

For fans of Erik ten Hag’s men or those who have decided to add United to their investment portfolio, this equates to a 126.38% return on the outlay of 12 months previous, and when it comes to stocks and shares, this is not something that you would turn your nose up at.

Although if we look at the ten entities that currently have the most significant shareholders in Manchester United, it looks like you are going to need deep pockets to strike it rich.

As you can see, this is not the pursuit of the superfan, this is nothing more than a vehicle for venture capitalists to speculate and should the sale of the club go ahead sooner rather than later, then they will certainly accumulate as well. 

However, it could also be argued that investing in Manchester United is the exception rather than the rule when it comes to football shares and the reason for this is due to such low prices when looking at the other clubs that you can buy into.

For example, if we were to look at Juventus and the share prices in June 2022 and June 2023, there has been an increase by the smallest of margins. What was worth just 0.34 euro last year, is now worth 0.35 during this. 

An increase of 2.94% may be, but not enough movement to make any supporter rich overnight. To put this into context, we can look at the ten biggest shareholders of the Turin outfit and the number of shares that they currently own:

The private equality firm Exor NV owns more than 1.6bn shares in Juventus and currently has a 63.80% stake in Serie A outfit. A lot of shares, yes. A lot of genuine value, arguably not. At the same time, the same statement can be made for each of the top 10 biggest shareholders.

Even at the bottom of this list, BlackRock Advisors (UK) Ltd owns more than 2.3m shares in Juventus; right now that 0.09% holding in the club is worth just over 800,000 Euro and one wonders where the genuine value is in all of this.

Shares for Normal Fans?

Of course, if you were a supporter of Juventus, Roma, Lazio or any other of the 13 clubs listed on stock exchanges, you may want to purchase a share or two to say you are an owner of the club. At the same time, this can be nothing more than a token gesture. 

Take Celtic for example. Their share price was 125 GBX in June 2022, which increased to 127.5 GBX a year later. Big numbers on the surface of it and a 2% increase on your return on investment. 

However, there is a catch here; it comes with the currency in which Celtic’s shares are sold. Unfortunately, GBX does not have parity to GBP; instead, you need 100 of the former to get just one of the latter.

For all intents and purposes, a share in Celtic is currently worth just £1.25. A small barrier to entry but one that makes you wonder if it is ever going to be something that makes a substantial return for the diehard supporter.

Increases Everywhere, but How Much do you have to Invest

When looking at the 13 clubs in the data table, we can see that 12 teams have recorded a share price increase from June 2022 to June 2023 and only if you invested in Lyon would you have seen a shrinking of your financial outlay.

The evidence shows that you can make a profit on football club investments, but unless you are prepared to take a substantial or even majority shareholding in the sporting institution, it does seem as if your money is not going to be well spent.

While even clubs themselves have concluded that being listed on a stock exchange is not the best of ideas.  Whereas you could in the past invest in a piece of Tottenham, Arsenal, Millwall or Birmingham, these four clubs have long since been removed from public trading.

Because even though the majority of active clubs have seen their share prices increase in the space of 12 months, this could just be a favourable capture of time. Who is to say things could not come tumbling down another year later?

Volatility Due to Performance

When you consider how much financial volatility there could be due to matters both on and off the field, any football club investment is always going to be a rather nervy endeavour. Especially when you consider the impact that results can have on a club’s revenue streams.

Clubs heavily rely on revenue streams such as ticket sales, sponsorships, and TV rights, which can fluctuate based on team performance, league standings, and economic conditions. Poor financial results could lead to a decrease in share value or even bankruptcy.

Bankruptcy may be the nuclear outcome, but administration is certainly not, if the books cannot be balanced, any share price can quickly dissipate to either very little or nothing at all – even if the barrier to entry can be rather small.

Not to mention the emotional attachment that comes with any sporting investment. Investing in your favourite football club can be driven by personal passion and emotional attachment rather than sound financial decision-making. 

This means emotional decisions may cloud judgment and lead to impulsive investments that do not align with your overall financial goals and risk tolerance. Which begs the question are you investing with your heart or your head?

Not only that, but football shares are often illiquid investments, meaning they are not easily bought or sold on a public stock exchange. This lack of liquidity can make it challenging to exit your investment when desired or in response to changing circumstances.

What about Non-League Clubs?

Perhaps the best way to own a share in a club is at a non-league level. Here the share has nothing more than a token value, but the most important thing is that it is equal to all the other shareholders at the club.

Because as a minority shareholder at somewhere like Manchester United your influence on the club's decision-making process may be limited if anything at all. As a shareholder at non-league level, your share will be able to have a much larger impact on the club.

The process is far more democratic and every opinion from shareholders is concerned. Not only are you helping a team at grassroots level but more importantly, your voice is not going to be ignored at the upcoming AGM.

Which begs the question as to whether you should invest in a football club. If you are a diehard fan, then there is nothing wrong with owning a small stake but if you are banking on this being your retirement fund, you may be working for a little longer than first planned.