Football is more than just a sport; it's a global phenomenon that captures hearts and minds. But have you ever thought about not just cheering from the stands but also investing in the game itself? How do football and the stock market fit together? Let's explore the exciting opportunities and potential pitfalls of investing in the world of football.
From Fans to Investors: A New Perspective
The recent match against Italy stirred all of Switzerland. Even casual fans were captivated. Football, the world’s most popular sport, ignites national passions and creates connections. But beyond the emotions, it’s also a colossal business.
Over the past four years (2019-2022), FIFA generated 6.8 billion francs (7.568 billion US dollars) in revenue. Last year alone, despite no World Cup, FIFA made over one billion francs (1.169 billion US dollars). The bulk of this revenue comes from broadcasting rights. Beyond FIFA, major clubs like Manchester United, listed on the stock exchange, players, infrastructure providers, and media rights holders all benefit from football's immense popularity.
Football as an Investment: Opportunities and Risks
Football’s popularity shows no signs of waning. But how does it fare as an investment? Let’s dive into the possibilities, opportunities, and risks.
1. Buying Shares in Listed Football Clubs
Several clubs are publicly traded, with Manchester United being a prime example, boasting a market capitalization of around 2.5 billion francs. Other listed clubs include Ajax Amsterdam, Juventus Turin, Borussia Dortmund, and Celtic Glasgow.
Returns on these shares vary. For instance, Benfica Lisbon (+103.11%) and FC Porto (+77.41%) have delivered solid returns over the past decade, while Borussia Dortmund (-38.10%) has not fared as well. You can buy shares through a brokerage platform. Some clubs also offer bonds with attractive interest rates but high risk.
2. Structured Products, ETFs, and Bonds
No dedicated ETFs for football clubs exist, but their shares are often included in sports ETFs. For example, the VanEck Video Gaming and eSports UCITS ETF has achieved +94.97% over five years (as of June 2024).
Newer products, like Swissquote's "Football Fever" certificate, invest in companies benefiting from the football boom, including hospitality, football clubs, and broadcasting rights holders. Since 2018, it has returned +45.2%, compared to the MSCI World's +76.11%.
Investing in football allows you to ride its global popularity, but it also comes with risks:
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Unpredictability: Success depends on many unpredictable factors.
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Volatility: Football club shares are highly volatile.
- Negative Returns: Investments may not yield expected returns.
- Lack of Diversification: Investing in a single club lacks diversification.
- Transparency Issues: The industry often struggles with transparency and scandals.
- Foreign Currency Risk: No Swiss clubs are listed.
- Liquidity Issues: Football shares are less liquid than those of other companies.
- Structured Products: These may not perform better than traditional, diversified world indices.
Unconventional Investment Ideas
1. Next World Cup 2026
Football's unpredictability, from game results to player transfers and injuries, makes it a high-stakes investment. The hype and FIFA's biggest revenues center around major tournaments, especially the World Cup. The 2026 World Cup in the USA, Canada, and Mexico could present interesting investment opportunities in infrastructure.
2. Women's Football
Women's football is on the rise, with the European fan community projected to grow 2.3 times by 2033. The 2023 FIFA Women’s World Cup saw record attendance and over 2 billion viewers, signaling a lucrative growth area.
3. Gaming and E-Sports
The e-sports market continues to boom, with expected global revenue of 3.8 billion francs (4 billion euros) in 2024, largely driven by e-sports betting. By 2028, this market is projected to grow to 5.13 billion francs (5.3 billion euros). The biggest growth is expected in the USA, with significant contributions from Asia, Germany, and France.
Investing with Passion
Investing in football offers exciting opportunities but also comes with high risks. Whether you’re a passionate fan or a savvy investor, it’s crucial to invest amounts you’re willing to lose. So, what do you think? Are you ready to invest in the beautiful game, or do you prefer to cheer from the sidelines?
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Disclaimer: Investing carries risks. The value of investments can go down as well as up, and you may lose some or all of your money. Past performance is not indicative of future results. This email is for informational purposes only and does not constitute financial advice.