Alright, first of all. From now on I will call football by its real name. Soccer. Go North America, join the program!
Stripping that away, football is big business. It’s the most watched sport in the world, and I’m writing this a day before the end of the European season. The last match is the Champions League final which will be held on May 28, 2022 between Real Madrid and Liverpool. This match will be one of the most watched sporting events in the world. Much bigger than the Super Bowl. The 2021 Champions League final drew 700 million viewers compared to Super Bowl 2022 112 million.
Money and football have a long history. Many believe that football is slowly becoming the sport of the rich now that billionaires are taking over the game. It all started with a Russian oligarch who bought Chelsea FC, but lately we have seen Middle Eastern money coming in. and spend big. Manchester City and Paris St Germain anyone? The Saudis actually bought Newcastle United FC, and technically Newcastle has the richest owners in world football. Paris St Germain have recently been accused of ruining football over Kylian Mbappe’s contract.
A few headlines over the past few weeks. First, my beloved Chelsea FC is bought for £4.25 billion. This acquisition more than doubles the record for the most expensive in the history of sport. American billionaire Todd Boehly and his consortium take the reins of Stamford Bridge. Boehly is also part owner of the MLB team Los Angeles Dodgers. The important thing is that the United States starts to pay attention to football (the European variant).
This has happened before with mixed results. Fenway Sports Group, owner of the Boston Red Sox and the Pittsburgh Penguins NHL team, owns Liverpool FC. Very decent management and Liverpool are one of the best teams in the world right now. On the other side we have the Glazers and Manchester United. Great team, but the owners are regularly voted as the worst owners in the Premier League. Finally, Stan Kroenke, owner of the Colorado Avalanche, Denver Nuggets, Colorado Rapids and Los Angeles Rams, owns Arsenal FC. This takeover of Chelsea is significant as Boehly’s bid even beat the bid of the UK’s richest man, Jim Ratcliffe. Now let’s see if Boehly will spend as much as the Russian and Arab billionaires!
Sports teams are great investments for billionaires. I mean, let’s face it, people will still go to games and fill seats even if the team isn’t playing the best. I’ve seen many fans try to boycott football matches to sell tickets, but tourists and foreigners quickly grab those seats. Going to England and watching a Premier League match is on many people’s to-do list. Sports teams at this level tend to retain their value and can be sold for a larger profit.
Investing in lower division teams is also becoming popular. Equity Guru’s Chris Parry has invested in Altrincham FC. Hollywood actor Ryan Reynolds is just one celebrity who also invested in a football team. This time a team in Wales.
But how about investing in football teams through the stock market? I have three tables of the main football teams from three different leagues which I will detail. In the European markets, there are many big teams listed on different exchanges.
Juventus FC (JUV)
Juventus is Italy’s biggest football club and is often referred to as the ‘old lady’. Their black and white jerseys are iconic. The team had one of their worst seasons recently and will likely have to spend big to make a statement for next season.
You can see that the stock has seen a big increase in 2018. The Cristiano Ronaldo effect. Upon his arrival, Juventus saw a huge increase in all of their social media channels and shirt sales. On the stock market, Juventus saw their market capitalization increase by £300m when Ronaldo joined them.
Juventus currently have a brand value approximately $1.95 billion.
The stock chart is not the best. Yes, we had a nice pop when Ronaldo joined, but the stock gave up on those gains. We are now trading around €0.37. As a technical analyst, I really like the setup right now. But it would be an exchange, not an investment.
Borussia Dortmund (BVB)
Borussia Dortmund is a German team that plays in the Bundesliga. The team is actually known for doing great business. They buy young players, develop them, and then resell them with a big profit. Some notable players are Ousmane Dembele, Robert Lewandowski, Ilkay Gundogan, Christian Pulisic, Pierre Emerick Aubameyang and most recently Norwegian superstar Erling Haaland.
Dortmund have seen a huge brand boost according to Forbes with brand value now at $1.9 billion.
Stock wise, same pattern as Juventus. I had a bit of a bump but then gave up recent gains, although I would say Dortmund performed better than Juventus stock. In terms of recent price action, my technical analyst eyes see a very intriguing trade entry if we can break above 4.05 Euros.
For US traders and even Canadians investing in US markets, you can buy Manchester United shares.
Manchester United are a juggernaut when it comes to brand value. They are one of the most famous and recognizable sports teams in the world. They are also the third most valuable team in world football according to Forbes.
The last season was bad. Manchester United failed to qualify for the Champions League and finished 6th in the league. Poor and disappointing performance has been the norm recently. The team spends a lot to bring in players (Harry Maguire lol) but they just can’t make things click. The word ‘rebuild’ is always mentioned, even though Manchester United have spent the second largest amount of money in England on bringing in players in the last 5 years!
On the chart, Manchester United shares hit all-time highs last week, hitting lows of $10.51. In technical terms, this looks like an attractive area to buy as the buyers have driven the stock higher in order to approach the crucial support at $12.25. Keep an eye out for other bases here, and we might have a trade to work with.
In summary, it’s great to own shares in a club you support. Watch the games, then check how stock prices react. However, football stocks did not perform well. Support your team by spending money on merchandise, but stocks have suffered big losses as teams spend BIG. Don’t mix passion and investment when it comes to football teams. When it comes to trading rather than investing for the long term, it’s a whole different story. Some of these chart setups look intriguing, especially Manchester United.