I have enjoyed football for as long as I can remember and, to me, it’s one of the greatest sports in the world. Today, I’d like to discuss if the average investor can reap dividends from investing in the ‘beautiful game’.
Can you invest in football clubs?
Operating a professional football club encompasses a host of background activities including match ticketing, stadium operations, merchandising, and multimedia. Revenue usually comes from three main segments, including commercial (such as sponsorship contracts), media (such as broadcasting) as well as match day income.
Fans are fiercely loyal. Over the past three decades, football has turned into a big business, not only in the UK but also globally. And several of our domestic clubs have tried to capitalise on fan loyalty by floating their clubs on the stock market. Aston Villa, Birmingham City, Glasgow Rangers, and Tottenham Hotspur are among the football clubs that have been publicly traded at some point in their history. They are now all private.
Currently, Glasgow Celtic is the only team listed on a mainstream exchange in the UK. If you’re considering becoming an investor, then the share price is about 165p. My family is planning a move to the greater Glasgow areas in two years as well as buying into the club at the time.
In August 2012, Manchester United listed on the New York Stock Exchange (NYSE) with an opening price of $14.05. In 2018, the shares hit an all-time high of $27.70. Yet year-to-date, they are down about 11%, hovering around $16. If you are a Man United fan who also wants a piece of the club, then you may want to check with your UK-based brokerage firm if its platform would enable to you buy the shares.
If you are wondering about buying Arsenal stock, that’s somewhat more complicated. Only about 60,000 shares in the club have been issued. However, they’re not listed on a public exchange available to the average investor. Instead the shares are traded on the specialist market NEX Exchange.
Sportswear and broadcasting
Even if you may not find it easy to buy into football clubs directly, you may consider investing in sports indirectly. Take JD Sports Fashion, for example. In 2016, its share price was hovering around 200p. At the time, if investors had paid attention to how customers and fans drove up the demand for must-have trainers as well as other sports clothing, they might have purchased JD shares.
Fast forward to October and each share is worth about 765p. In other words, the investment would have have almost quadrupled.
Finally, it is worth remembering that BT Group and Sky, the latter owned by the US conglomerate Comcast Corporation, constantly battle for televised domestic and European football rights. For example, in 2017, BT Sport paid £1.2bn to secure rights to Champions League and Europa League matches for three seasons. Thus the group may offer another alternative to invest in football and other sports.
The Foolish takeaway
“In life, as in football, you won’t go far unless you know where the goalposts are” is a quote attributed to Arnold H Glasgow, an American humorist and author. We can possibly apply his wisdom to investing too. In other words, saving regularly and investing with a clear focus would help most of us achieve our longer-term financial goals.
