Effects of COVID-19 on Stock Returns of European Football Clubs: An Event Study Analysis

The COVID-19 pandemic has created major financial problems all over the world. The football industry has also been negatively affected by this global crisis. Due to the epidemic, all leagues have been postponed for a certain period of time. In particular, football clubs, which depend on TV, ticket sales and advertising revenues, have suffered significantly. It is inevitable that this situation will be reflected in the returns of football club stocks. The aim of this study is to examine the effect of the COVID-19 epidemic on the return of all football club stocks traded in European stock markets. For this purpose, event study was chosen as the method. 11 March 2020, when the World Health Organization declared COVID-19 a global epidemic day, was determined as the event day. According to the results, the cumulative abnormal average return (CAAR) of all football club stocks was negative between five days before and five days after the pandemic declaration date. The CAAR of football clubs between these dates varies between -14.21% and -103.13%. In the long-term window, between the sixth day and the thirty-sixth day after the event day, the CAAR was between -5.00% and 60.78%. In the study, football club stocks were also compared with country national indices. The average return losses of country football club stocks are higher than the country national index returns in the short-term window. However, the opposite is true in the long-term window. In addition, the existence of abnormal returns during the crisis also shows that the football stock market is not an efficient market.