Thursday, June 20, 2024

European Super League Controversy: How Are Club and Other Related Stocks Affected?

News emerged on Sunday of a breakaway “European Super League”, comprising 12 or more of Europe’s top football teams, in direct competition with UEFA’s flagship Champions League and Europa League tournaments. It’s a topic that has already stirred strong feelings among players, managers and fans alike. But with the motives predominantly financial, what has been the immediate effect on stock valuations for those clubs that are publicly traded?

Participating clubs

Those clubs participating in the league have already seen a major boost to their stock prices:

  • Manchester United shares are up 9% since trading opened
  • Juventus shares are up more than 12% since trading opened

Objectors

While Bayern Munich and PSG are not publicly traded, stock in Borussia Dortmund (for the remaining 49% stake not reserved for traditional German fan ownership) is already up over 7% since trading opened this morning.

Commentary:

While an initial rise in share prices for those breaking away was always to be expected, with revenue growth one of the key drivers behind the move, it is hard to say what will happen next. How will the stock of publicly traded clubs and European stalwarts such as AS Roma and FC Porto, outsiders to the European Super League, react to the prospect of major devaluation in their regular domestic and European competitions? The stock market and the European football scene are reaching simultaneous crests of volatility this year, making almost anything possible. Will we see another grassroots investment drive, for instance, where fans club together to drive up the stock price of a publicly traded club outside the European Super League – perhaps an objector, such as Borussia Dortmund?

by Naeem Aslam, Chief Market Analyst at AvaTrade

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