Bourse et Football
AbstractIn 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Dalloz in its journal Revue d'économie politique.
Volume (Year): Volume 118 (2008)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.cairn.info/revue-d-economie-politique.htm
stock exchange; financial crisis; economics of sport; football; governance; regulation;
Other versions of this item:
- 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
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: Competition and regulation in north American vs. European professional team sports leagues," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00677436, HAL.
- 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.
- Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
- Sébastien Dessus & Gaël Raballand, 2011. "L'Etat peut-il rendre compétitif les clubs de football français ?," Post-Print halshs-00639300, HAL.
- 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.
- Sébastien Dessus & Gaël Raballand, 2011. "L'Etat peut-il rendre compétitif les clubs de football français," Documents de travail du Centre d'Economie de la Sorbonne 11048, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.