The market for football club investors: a review of theory and empirical evidence from professional European football

ABSTRACT

Research objectives: The European market for football club investors is undergoing a significant transformation, with German clubs opening up for strategic investors, French clubs being taken over by private majority investors, and English top-league clubs experiencing an influx of foreign investors. Economic and legal politics have played an important role in the deregulation of closed member associations.

Research methods: This paper aims to summarize the history and market situation of the ‘Big Five’ European leagues, review available theory and empirical evidence on incorporations and public and private investors, and suggest research gaps that deserve further attention. The authors have also constructed a unique database covering all owners in the two premium divisions in England, France, Germany, and Italy for the period from 2003 to 2014.

Results and findings: The available articles in the growing research field of football club investors cover various theoretical areas, such as the application of property rights theory to European football clubs. In addition, several empirical papers analyze the financial and sporting impact of domestic and foreign private investors and public listings. All these studies highlight the increasing importance of club ownership in the rat race of European football.

Implications: Nevertheless, some research gaps remain to be studied at an appropriate depth. First, further empirical studies should analyze the impact of incorporations in German football and the entry of private majority investors in France. Furthermore, future research may address the paradox of de-listings in England and additional listings in continental Europe. Finally, this article identifies the impact of foreign investors and multi-ownership synergies as promising research fields. In this respect, the article provides some managerial implications for football club owners, managers, and regulators.

KEYWORDS:

• Sports economics
• club ownership
• incorporation
• commercialization
• internationalization
• majority investors
• foreign investors
• Europe

JEL CLASSIFICATION:

• D2
• D4
• D92
• L1
• L2
• L83

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The following analyses are based on revenue and wage data from Deloitte, DNCP, and club accounts; market value and transfer fee data from Transfermarket.de; and author calculations. The detailed results are available from the authors upon request and refer to first and second division football clubs in England, France, Germany, and Italy as of June 2012.

2. The figures are based on author calculations using public data for first and second division clubs in England, Germany, Italy, and France as published by Deloitte, DNCP, club accounts, and Transfermarkt.de. “Leverage” implies correlation rather than causation. Data summaries are available upon request.

3. See note 2.

4. As of 10 May 2016, Transfermarkt.de lists nine UEFA Champions League players worth more than €20 mn. A detailed list is available upon request.

5. A detailed overview of the private ownership of Ligue 1 and Ligue 2 clubs is available from the authors upon request.