The impact sporting and financial performance of football clubs on their stock price: an analytical study of European clubs sample listed in the financial market

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Abstract
Purpose – The purpose of this research is to determine the nature of the relationship between sports,
financial performance and stock price of football clubs by adopting the quarterly financial statements of the European clubs that represent the research sample: Juventus, Borussia Dortmund, and Olympique Lyonnais, which helps clubs’ managers in evaluating the sporting and financial performance effect on the share price at the quarterly level.
Design/methodology/approach – The research is performed using the panel data technique, for
Juventus, Borussia Dortmund and Olympique Lyonnais (2007–2016). The sporting performance is
represented by the quarterly rate of the number of goals scored by the club to the number of goals scored
against it; the quarterly rate of the number of wins to the total number of matches played by the club in
local and international competitions. At the same time, financial performance is represented by the
quarterly rate of the current ratio, the quarterly rate of the leverage ratio, and the quarterly rate of earnings per share (EPS).
Findings – The analysis of the results was distributed at two levels: macro and micro. The analysis at the
macro-level dealt with the correlation and influence between the sports performance indicators and the
financial performance indicators of the three clubs combined on the share prices of those clubs. The micro-level performance is analyzed separately from the macro analysis. The results indicated that there was an effect on macro analysis. As for the microanalysis, the results showed no effect of the sporting performance of the three clubs on their share price.
Research limitations/implications – The main implications of this research reveal the weakness
of the correlation between the clubs’ share price in the financial market, possibly due to the quarterly
rate of the data. But there is a slight change for Juventus. There is a moderate correlation between the
quarterly sporting performance indicators of this club and the quarterly average of its share price in the
market.
Practical implications – The main implications of this research reveal the weakness of the correlation
between the clubs’ share prices in the financial market, possibly due to the quarterly rate of the data. But there is a slight change for Juventus. There is a moderate correlation between the quarterly sporting performance indicators of this club and the quarterly average of its share price in the market.
Social implications – The social implications of the current research are clear by dealing with the
relationship between the sports and Financial performance of football clubs and its relationship to the price of its shares in the financial market. The success of football clubs in achieving sporting victory attracts more fans. This leads to an increase in the club’s profits and consequently to an increase in the price of its shares in the financial markets. Therefore, the societal benefit will be achieved by increasing the enjoyment of the audience and increasing the revenues of the club and the city to which it belongs.
Originality/value – The originality of this research is represented in its use of quarterly data to clarify the
relationship between the sporting and financial performance of a sample of European football clubs with the price of its shares in the financial markets. Therefore, this research differs from previous research that used only daily and annual data for clubs to clarify the relationship between their sporting and financial
performance.
Keywords Sporting performance, Financial performance, Share price, Number of goals, Number of wins,
Current ratio, Leverage ratio, and Earnings per share.