A soccer team can be an especially meaningful love in the life of a real fan and sometimes no less than his marriage. In recent years, one’s favorite team can even reap significant profits, and not necessarily through standard betting, but rather through a real investment if the team is traded on the market. How worthwhile is it to invest in such a team?
By Eitan Eldar
Going for the famous teams
In principle, the most famous clubs in a certain country or those which have achieved world-fame, are those that will be offered for public trading on the market. This is due to the need to guarantee a large and sincere group of buyers who will not abandon the stock when it is offered for trade or afterward. Precisely for this reason, one can see a variety of large and famous teams like Manchester United in England, the Italian Juventus or even the German Dortmund, which have a worldwide fan base. The world’s leading teams in recent years have been investing great marketing efforts in Asia and are building a large fan base in these countries, which contributes greatly to increases in their revenues.
The relative advantage
Clubs that are famous all around the world, play in leading tournaments like the European League and feature famous players that are worth millions, bring the loyal fan base to make a significant financial investment. This type of club can raise large sums of money in the market, and therefore can also yield significantly high returns for the investors.
The yield is undoubtedly affected by the stock’s market performance, but also by management decisions, match losses, and victories, as well as various matters relating to the club and the world of soccer. A quick search will show that many clubs have earned especially large yields, even reaching 200 percentage points of the stock value. However, these clubs are vulnerable to falls due to a single action that is damaging to their market value.
The disadvantage – staying close to developments
The difference between a soccer team and a classical company traded on the market is inherent in the fact that nobody knows what tomorrow will be like. For example, a particularly important match in an important league can affect market value. A classical company can announce a new product or an increase in sales and through this create a sense of calm for its investors, but a soccer team cannot promise real success, even if it brings the best players and invests in training for matches.
Precisely due to this element of uncertainty, the stock can make a significant leap following success or drop when the club doesn’t meet the goals it set for itself. Therefore, it is important to closely monitor all developments, and make sure that the team is ready and prepared for matches, and also to understand the importance of the match for the team. The more information available about the future of a team, the easier it will be to predict its success, and ultimately how profitable it will prove for the investor.
Eitan Eldar holds a degree in law and specializes in mergers and acquisitions of companies. He has used his experience and knowledge of the field of finance to carry out many deals.