Are football clubs as pieces of art or as regular corporations? An empirical evidence of market valuation of football clubs in the big 5 leagues

Purpose: The aim of this paper is to determine whether football clubs are valued according to financial parameters, as in other profit-seeking investments, or depending on the subjective preference of the buyers, in situations where buyers seek emotional rewards or a status symbol. Design: This work analyses a unique data set of the prices of actual transactions of shares from clubs in the big European leagues from 2001 until 2019. A theoretical model is presented introducing financial, sporting, and localisation variables to study their influence in market value. Findings: We have found that the valuation of football clubs in acquisitions is influenced by financial parameters, as in other profit-seeking investments, and does not depend on the subjective preference of the buyers. Practical implications: Our findings show the end of the alignment of interests between new football owners and fans or current organisers of competitions, due to the preferences of the new investor profit-seekers of an American model of sport. Research contributions: The ownership of football clubs in the big leagues has changed dramatically in the last years. For the first time, to the best of our knowledge, the present paper demonstrates the opportunity of analysing the valuations of the football industry with actual data from the transactions.