The Tribune

By CHRIS ILLING

CCO @ ActivTrades Corp

Just like the game on the field, the prices of soccer stocks on the stock exchange are often difficult to predict. Because listed clubs are impacted by major events, particularly their on-field success, these stocks are often considered volatile. Sporting success increases the attractiveness of the club for fans and advertising partners, and increases the chance of selling more fan articles.

Some of the fans and investor favourites are Ajax Amsterdam, AS Roma, Borussia Dortmund, Brondby, Glasgow Celtic, FC Porto, Juventus, Manchester United, Olympique Lyonnais, Lazio and Sporting Lisbon.

The precarious financial situation facing many of the major Spanish and Italian clubs, as well as the delisting of some English clubs' shares from the stock exchange, has contributed to the bad reputation of soccer stocks. Regardless of the poor financial situation, interest in football is unbroken. In terms of popularity, soccer is still the number one sport in Europe ahead of athletics, tennis and Formula One.

One example that showed just how soccer share prices are influenced by positive news was the return of Portugal’s all-time favourite star, Cristiano Ronaldo, to Manchester United in 2021. The club's stock market value rose by £212m during the day of the announcement.

Now, the same Manchester United is apparently negotiating exclusively with Sheik Jassim bin Hamad al-Thani, from Qatar, about a sale of the club. The more than $6bn takeover of Manchester United would be one of the biggest deals ever in the sports world.

The sale is apparently getting closer. The English Premier League club is negotiating exclusively with a consortium led by Sheikh Jassim. He is the son of former prime minister, Sheikh Hamad bin Jassim bin Jaber al Thani, one of the richest men in the country. As a result, Manchester United shares, which are listed in the US, temporarily rose by almost 15 percent on Thursday last week before declining again on Friday.

If an agreement is reached between the sheikh and the present owners, the Glazer family, the latter will withdraw completely. The competing offer from British billionaire, Sir Jim Ratcliffe, provided for the Glazers to keep a certain stake. However, insiders warned the situation remains uncertain and a new offer from Ratcliffe could prevent Sheikh Jassim from securing exclusivity.

It was initially unclear how long the period for the exclusive negotiations would last. The Glazers had started a formal sale process in late 2022. The deal would be one of the biggest ever in the sports world, following a similarly sized sale of the Washington Commanders NFL franchise earlier in 2023. Manchester United has over 650m fans worldwide and therefore one of the largest supporter bases in the world.

Just last week the soccer world reported one of the largest transactions ever. Major League Soccer in the US put together a deal for Lionel Messi that includes a percentage of sales from Apple's MLS Season Pass, a percentage of Inter Miami's shirt sales and an ownership stake in the club. This is on top of his annual salary of roughly $53m.

The share price of soccer clubs is being influenced by fan sentiments, the successes and failures during the season and the general development in the market. There are plenty of opportunities for the savvy investor.