How the future of European football can impact the market

How the future of European football can impact the market

May 19, 2021, 3:11:31 PM Sport

It may seem worlds apart, but the European football industry can have a major impact on the financial market, especially when it comes to stocks and forex trading. Football is the world’s largest and most popular sport, and Europe is its largest market, with more professional leagues and clubs than any other continent in the world. 

The European Leagues don’t just involve the matches themselves, but also include revenue from TV and sponsorships, as well as from commercial income, such as merchandise. They also generate significant social, cultural and economic impact on the individual nations through the number of jobs they support, taxes paid, and international travel and income from tourists. 

Therefore, the fluctuations in the financial situation of football leagues can have a detrimental effect on the economy, and as a result can cause price movements of relevant currency pairs in the forex market. 

For the average supporter, you may be thinking what is forex trading and how does it work? But investment banks and experienced traders, are constantly keeping their eye on the ball, when it comes to the twists and turns of European football, and its effect on national economies and stock prices. 

When it comes to stock investments, traders can include football club shares to diversify their portfolio. As previously mentioned, the clubs across Europe have continuously shown that they have the potential for impressive streams of revenue, and through the growth and worth of a football club, investors can profit from trading in their shares. 

At the time of writing, the largest football club on the New York Stock Exchange (NYSE) is Manchester United (MANU), and is the fourth biggest club in the world, based on the yearly revenue figures released in the annual Football Money League report. In April 2021, the MANU share price had a market capitalisation of around $2.64 billion.

The impact of COVID-19 

Due to the global pandemic, all football competitions were stopped and there was a huge impact on the clubs’ revenue. Slowly matches returned behind closed doors, and gradually fans return to stadiums, where possible. In the Financial Landscape of European Football report set out by the European Leagues, they touched on the impact of the coronavirus pandemic, claiming: 

“The sporting, financial and social impact is immense in the short term, while the mid and long-term effects are still very uncertain because of the unpredictable development of the virus. However, it is already clear that the pandemic will lead to billions of lost revenue for football, with the consequence that hundreds of professional clubs of all sizes, playing in many different domestic competitions, face serious negative financial (cash) issues.”

Focusing again on the price of MANU shares, the restrictions imposed meant that fans were prevented from coming to Old Trafford, and so there was a sluggish period for its stock last year, after peaking in August 2018. 

However, the club’s business acumen has proven well and has seen a further rise in the market. It has secured the future growth of the club, as there has been successful investments in digital marketing, mobile apps, ecommerce and even Manchester United Television (MUTV). Their commercial revenue for the last quarter was reported as £62.6 million.

The proposal of a European Super League

Although it soon crumbled after its announcement, the news that there was a proposed new European Super League had an immediate effect on the stock valuations for the clubs that were supposedly involved. 

There appeared to be a sudden spike in value for the clubs participating, and going back to MANU shares, their price rose by 9% on the London Stock Exchange when the Super League was initially proposed. Likewise on the NYSE, the MANU shares were up by 9.4% at the beginning of April for trading in the US.   

It was not just the stocks in the clubs that saw their valuation impacted. In the other direction, shares in investment bank, JPMorgan (JPM) dropped by 0.4% in April 2021, coinciding with the announcement of the Super League. This is likely due to the fact that JPM was predicted to finance the new league, as they have previous involvement in football investments. 

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For both stock and forex traders, it seems that the financial markets and the European football industry are coinciding in volatility for the year so far. When making any trading decisions, it seems that anything is possible at this stage, and that the future of European football and its simultaneous impact on the market, is still unclear. 



Published by Samantha Brown

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