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Bourse et Football

Author

Listed:
  • Michel Aglietta
  • Wladimir Andreff
  • Bastien Drut

Abstract

In this article, we analyse various issues linked to the quotation of European professional football clubs on a stock exchange. An empirical study of the Dow Jones Stoxx Football index exhibits a high volatility of returns and share prices regarding a sample of floated clubs as well as an insufficient market depth. The relationship between market illiquidity and share price volatitlity does not rely on an insufficient funding by speculators who adopt ?contrarian? behaviour but on the uncertainty attached to the fundamental value of football clubs. From witnessing how brokers and specialised audits value three representative football clubs, it appears that it is extremely difficult to fix the actual fundamental value of a football business. The sporting performances of a club have an incidence on its share price all over the season and are of drivers the fundamental value variations of a football club. Instead of considering that the stock market will discipline the governance and management of European football clubs, we show that it would be worth hardening the clubs? budget constraint before their exposure to financial market evaluation. The financial crisis of European football is less harsh in France though it translates into big clubs accounting imbalances, a high volatitlity of their return on equity, and their lasting indebtedness. It is so despite the existing financial supervisory body which monitors French football, contrarily to the situation in other European football leagues. A weak clubs? governance is revealed by their reluctant account disclosure and their inability to curb wage inflation and handle player transfers. The club budget constraint is softened by the television godsend which is a significant determinant of player wages. Spreading the French model of governance throughout European football still requires some governance improvement, which is also a prerequisite for successful float of football club shares in the stock market. Ten recommendations are derived to improve football regulation.

Suggested Citation

  • Michel Aglietta & Wladimir Andreff & Bastien Drut, 2008. "Bourse et Football," Revue d'économie politique, Dalloz, vol. 118(2), pages 255-296.
    • Handle: RePEc:cai:repdal:redp_182_0255
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    Citations

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    Cited by:

    1. Sébastien Dessus & Gaël Raballand, 2011. "L'Etat peut-il rendre compétitif les clubs de football français ?," Post-Print halshs-00639300, HAL.
    2. Teodor Dima, 2015. "Manchester United’S Ipo (2012)," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 65-71, February.
    3. Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: Competition and regulation in north American vs. European professional team sports leagues," Post-Print halshs-00677436, HAL.
    4. Andreef, Wladimir (Андрефф, Владимир), 2016. "French professional football in European context: how much different? [Французский Профессиональный Футбол В Европейском Контексте: Насколько Велики Отличия?]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 108-137, June.
    5. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Post-Print halshs-00971782, HAL.
    6. Wladimir Andreff, 2008. "Globalization of the sports economy," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(3), pages 13-32, Dicembre.
    7. Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: competition and regulation in north American vs. European professional team sports leagues," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(1), pages 3-27, June.
    8. Jacques Fontanel & Liliane Bensahel, 2009. "Sur la gouvernance du football français," Post-Print hal-02651334, HAL.
    9. Nicolas Scelles & Boris Helleu & Christophe Durand & Liliane Bonnal, 2013. "Determinants of Professional Sports Firm Values in the United States and Europe: A Comparison Between Sports Over the Period 2004-2011," International Journal of Sport Finance, Fitness Information Technology, vol. 8(4), pages 290-293, November.
    10. Matthieu Llorca & Thierry Teste, 2016. "Dépenses salariales et performance dans l’industrie du football," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 125-145.
    11. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    12. Wladimir Andreff, 2009. "Équilibre compétitif et contrainte budgétaire dans une ligue de sport professionnel," Revue économique, Presses de Sciences-Po, vol. 60(3), pages 591-633.
    13. Wladimir Andreff, 2014. "French professional football: how much different?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01244492, HAL.
    14. Jacques Fontanel, 2009. "En guise d'introduction," Post-Print hal-02154975, HAL.
    15. Wladimir Andreff, 2014. "French professional football: how much different?," Post-Print halshs-01244492, HAL.
    16. Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: Competition and regulation in north American vs. European professional team sports leagues," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00677436, HAL.

    More about this item

    Keywords

    stock exchange; financial crisis; economics of sport; football; governance; regulation;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Z19 - Other Special Topics - - Cultural Economics - - - Other
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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