Football is the most popular sport in the world with an estimated fan base of approximately 4 billion.  It is called the beautiful game but it is also a business. This brings the most committed fan to the ground but also opens up the emotional opportunity to own a small part of history by buying into the club. Most football clubs tend to be privately owned although there is a significant minority that are bringing their brand to the masses by going public.

Football clubs need to bring profit to the owners, and there might be several reasons why they carry out an IPO. The stock market might be a great idea for those teams that need to raise funds for pressing needs within the business to expand. That’s like any company model. If a club has a lot of assets but not enough cash to release then the public offering might be the best way to fund stadium developments like increased capacity or to create a cash pot to purchase new players.

Most times, football fans come last in the sense of travelling to games, ticket prices going up and generally being moved around to parts of the country at inconvenient times. The idea of gaining some kind of investment in the team, however minimal, is attractive. Shares are a bit like betting on your team with often a large part of sentiment involved.

On the other hand, the market conditions do have to be right for it to work on a financial and engagement level. Manchester United are probably the most famous club on the stock market, but in recent times their unstable management, poor results and questions over ownership have reduced their value at times. The club stopped paying dividends last year and until there is more stability and success on the pitch, then it is harder to invest with a long-term view in mind.

The volatility of football clubs on the market is one of the main factors for investors to consider. Depreciation of stocks can easily happen due to unforeseen circumstances because of the total unpredictability of the sport itself. The idea of a five-year plan with cumulative growth patterns is not something that is secure in such a dynamic game of ups and downs.

An unexpected run of defeats in a Champions League group stage can cut out the huge revenue that was predicted from going further. Moreover, if a main player is unhappy and exits the club after a poor season, then the price will crash. When Juventus lost to Olympique Lyonnais in the last eight of the UCL in 2020, the share price of the club fell by almost ten per cent.

However, there can also be a positive impact. When Cristiano Ronaldo joined the Italian giants from Real Madrid in 2018 with a massive price tag and wages for a player that was heading towards his mid-thirties, a number of concerns were raised. In actual fact, the club more than doubled in value from €600 million to €1,400 million benefiting from the player’s global reach with brands and sponsors. However, this short-term boost was more suited to a quick sell of shares when the market can fluctuate so markedly due to factors like COVID-19 or any scandals and bad publicity when the team creates negative headlines internally.

This is not to say that football clubs cannot provide a sound performance.  Borussia Dortmund's shares have been recommended by many expert analysts as a sound purchase.  The club's participation in the 2024 UEFA Champions League final at Wembley will also significantly boost their share price too.

The German club are an investor’s dream as with sound management, they maintained a steady balance sheet by creating a pattern of looking after the bottom line and enhancing performance on the pitch with some clever transfer deals.

The loss of big players like Jude Bellingham and Erling Haaland in recent years has not hit Dortmund too hard. A new team spirit and ethic has lifted the current squad above their expected level without an over-reliance on a maverick player.

It is also possible that the funds generated from IPOs are used for the more practical side, Clearing the balance sheet rather than pumping money into transfers and upgrading the stadium or facilities within the football club means that value can be affected. Big teams have significant wage bills too as well as a number of highly influential shareholders. Returns on shares can be compromised.

Recent research does suggest that football clubs go public to try and secure financial security and boost performance on the pitch. Results are mixed so far but the reality is that football is a roller coaster when investing.