Are you a passionate football fan in the USA looking to own a piece of your favorite club? This article explores How To Buy A Share In A Football Club, examining publicly listed clubs, investment strategies, and potential risks. Discover how to potentially invest in your beloved team, or explore alternative avenues like trusts, funds, and memorabilia.
Which Football Clubs Can You Actually Buy Shares In?
Unfortunately, not every football club offers shares to the public. To invest, the club must be publicly traded, meaning it’s listed on a stock exchange allowing the public to freely buy and sell shares.
Here are some prominent publicly-listed football clubs:
1. Manchester United
One of the world’s most valuable football clubs, Manchester United’s market capitalization was approximately £2.46 billion (as of November 2023). However, its share price has seen fluctuations.
Manchester United Share Price
2. Juventus
This Italian club has been listed on the Milan stock exchange since 2001. As of mid-November 2023, its market cap was £566.36 million. However, Juventus shares have experienced declines since July 2019.
3. Celtic
Celtic, based in Glasgow, has been listed on the London Stock Exchange since 1995. While its share price saw moderate growth in 2023, long-term performance has been less encouraging.
Other publicly-listed clubs include Borussia Dortmund (Germany) and AS Roma (Italy).
Clubs That Once Were Listed
Some clubs were previously publicly traded but have since returned to private ownership. Arsenal, for example, was once listed on the NEX Exchange but was delisted in 2018 when Stan Kroenke became the majority shareholder.
Unsuccessful Attempts
Rangers FC (Scottish team) failed in its attempt to list on London’s Alternative Investment Market (AIM) in 2015.
Privately Owned Giants
Manchester City FC, one of the most profitable clubs globally, is privately owned and not open to retail investors.
Why Invest in a Football Club?
For passionate fans, buying shares in a football club can be a deeply sentimental decision.
Emotional Connection
Shares allow supporters to own a piece of their beloved club.
Shareholder Rights
Holding shares confers the same rights as holding shares in any public company, including:
- Voting rights at AGMs (Annual General Meetings).
- A claim to dividends (if the company pays them).
Historically, Manchester United has been the primary football club to pay dividends, but these payments were paused for the 2023/24 financial year.
Risks to Consider Before Investing
Investing in football club shares, like any investment, involves risks. Share values can fluctuate, and these shares can be particularly volatile due to:
High Operating Costs
Running a football club is an expensive endeavor. Player salaries, transfer fees, training facilities, and other costs can make profitability challenging. Clubs must invest heavily to compete at the highest level.
On-Pitch Performance
Share prices are heavily influenced by wins and losses, which can be difficult to predict and can cause unexpected value swings.
Manchester United Share Price
External Factors
The COVID-19 pandemic significantly impacted club finances, leading to match postponements, cancellations, and games played without fans.
Manchester United reported an annual loss of £92.2 million in the 12 months leading up to June 2021, with matchday revenue plummeting by 92%.
Expert Opinion
Russ Mould, Investment Director at AJ Bell, said that “costs, such as salaries and transfer fees, continue to rocket and continually increase the cost of competing. Football clubs therefore look a bit like investment banks – they can generate a lot of cash when things go well, lose a lot when things go badly and even when things go well the money tends to end up in the pockets of the talent, not the owners or shareholders. Football clubs in general have proved to be terrible investments over the years.”
Depending on your financial situation and risk tolerance, purchasing season tickets to support your club might be a more suitable option than buying shares.
How to Actually Buy Shares in a Football Club
Buying shares in a football club can be a risky investment strategy. Here are the steps involved:
Step 1: Open an Account
DIY investors have numerous options when it comes to share trading, including online investing platforms and investment trading apps.
Consider factors such as fee structure, investment range, and user interface when selecting a provider.
Decide whether to hold your investments in a general share trading account or a tax-advantaged account such as a Stocks and Shares ISA.
Disclaimer: Tax treatment depends on individual circumstances and is subject to change.
Step 2: Choose Your Investment Strategy
Plan your investment strategy, which usually involves either investing a lump sum or making smaller, regular investments over time.
Lump Sum vs. Dollar-Cost Averaging:
| Strategy | Advantage in Falling Market | Advantage in Rising Market |
|---|---|---|
| Lump Sum | Increased capital growth. | |
| Regular Investments | You’ll pay less for each share over time, but still gain market exposure right away. |
Step 3: Place an Order
Once you’ve opened a trading account and selected an investment strategy, you can place your order. The exact process varies, but the basics are similar.
After funding your account (usually via bank transfer or debit card), use a search bar or browse an investment catalogue to find the share you want to purchase. Enter the number of shares you want to buy or the amount you want to invest.
Many brokerages allow investors to add a ‘stop loss’ order to their account to limit losses if the share price falls. For instance, if you purchased shares at $10 and set a stop loss order of $8, your shares would be automatically sold if the share price fell below $8, limiting potential losses to 20%.
Step 4: Monitor Performance
Regularly monitor your investments (e.g., monthly, quarterly, or annually). This allows you to decide whether to buy, sell, or hold shares based on their performance.
To sell your holdings, log in to your investing platform, select the investment from your portfolio, and choose the sell option. Enter the number of shares you want to sell.
If you’ve made a substantial profit, you may be liable for Capital Gains Tax (CGT).
Other Investment Options to Support Your Club
If buying shares isn’t your preferred option, consider these alternatives:
Investment Trusts and Funds
Invest in a trust or fund that includes holdings in multiple football clubs. The Finsbury Growth & Income Investment Trust, for instance, includes holdings in both Manchester United and Juventus.
Memorabilia
Purchase memorabilia such as shirts, signed footballs, or collectible cards. Signed football shirts can range from a few hundred to $10,000, depending on factors like whether they were worn during a match and whether the team won. However, there’s no guarantee that memorabilia will increase in value, and these items offer less liquidity than shares.
Sponsor Companies
Invest indirectly by purchasing shares in publicly traded companies that sponsor your favorite club. For example, Adidas is the long-running kit supplier for Manchester United.
Diversification
Consider combining multiple investment avenues to diversify your portfolio.
Alternatives to Direct Investment in Football Clubs
Before investing in a football club, be sure to consider alternative, potentially less volatile investments.
Exchange-Traded Funds (ETFs)
ETFs that track broader market indexes or specific sectors might provide more stable returns. According to a 2022 report by the Investment Company Institute, ETFs offer diversification and can be a cost-effective way to invest.
Bonds
Government or corporate bonds are generally considered less risky than stocks. The returns may be lower, but they offer more stability, especially during economic uncertainty.
Real Estate
Investing in real estate can provide long-term appreciation and rental income. According to the National Association of Realtors, real estate has historically been a reliable investment, although it does require significant capital.
High-Yield Savings Accounts
For those looking for minimal risk, high-yield savings accounts offer a safe place to grow your money while earning interest rates that are higher than traditional savings accounts. The FDIC insures these accounts up to $250,000 per depositor, per insured bank.
Commodities
Investing in commodities such as gold or silver can be a hedge against inflation and economic instability. These investments can be made through commodity ETFs or by purchasing physical assets.
Peer-to-Peer Lending
Peer-to-peer lending platforms connect borrowers with investors. These platforms can offer higher returns than traditional savings accounts, but they also come with increased risk as the loans are not FDIC-insured.
Annuities
Annuities are contracts with an insurance company where you make a lump-sum payment or a series of payments in return for regular disbursements, either immediately or at some point in the future. They can provide a steady stream of income during retirement.
Key Considerations Before Investing
Before making any investment decisions, consider these factors:
- Financial Goals: Define your investment goals and risk tolerance.
- Diversification: Diversify your portfolio to mitigate risk.
- Research: Conduct thorough research on any investment.
- Professional Advice: Consult with a financial advisor.
Mr. Mould at AJ Bell advises: “Buy the shares for emotional reasons of attachment by all means, but do so with eyes wide open.”
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FAQ: Buying Shares in a Football Club
Here are some frequently asked questions about buying shares in a football club:
1. What does it mean for a football club to be publicly traded?
A publicly traded football club is listed on a stock exchange, allowing the public to buy and sell shares in the club.
2. What are the benefits of buying shares in a football club?
Benefits include owning a piece of your favorite club, voting rights at AGMs, and potential dividend payments.
3. What are the risks of investing in football club shares?
Risks include high operating costs, influence of on-pitch performance on share prices, and external factors such as pandemics.
4. How do I buy shares in a football club?
Open a trading account, choose an investment strategy, place an order, and monitor performance regularly.
5. What is a stop-loss order?
A stop-loss order automatically sells your shares if the price falls below a set level, limiting potential losses.
6. Are there alternative ways to invest in or support a football club?
Yes, including investing in trusts or funds, purchasing memorabilia, or buying shares in sponsor companies.
7. Should I consult a financial advisor before investing in a football club?
Yes, consulting a financial advisor is highly recommended.
8. What factors should I consider when choosing an online investing platform?
Consider fee structure, range of investments, and user interface.
9. What is Capital Gains Tax (CGT)?
CGT is a tax on the profit from selling an asset, such as shares.
10. Where can I find reliable information about investing in football clubs?
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