English soccer is commanding a fair bit of attention these days in what might seem an unlikely venue: the stock market.
More and more clubs are testing their fortunes in the rough-and-tumble corporate world as they raise cash by selling shares to the public. And what's happening in the market can be as wild as what takes place on the field.
Stock prices have fluctuated sharply amid hype about pay-per-view deals with television companies. Earlier in the year, clubs' shares were up about 400 percent for a 12-month period.
Then came a warning that the sector was overvalued by about 1 billion pounds, the equivalent of $1.6 billion, and some stock prices tumbled this spring as investors bailed out.
But the buzz persists, with 15 clubs traded publicly and more expected soon, either on the London Stock Exchange or the smaller Alternative Investment Market.
Recent page one ads in the Financial Times, London's business daily, say "Football Investors Wanted" for minimum bets of 1,000 pounds, or $1,600, in a soccer fund set up by a London brokerage.
The market has seen some big gainers, but one club that set its sights too high is struggling to recover after its stock price collapsed and its shares were suspended from trading.
In the long run, analysts say, only a handful of teams are likely to be a good wager.
William Davis, an investment researcher at the brokerage Albert E Sharp in Birmingham, predicts "not more than half a dozen at most" clubs--such as powerhouse Manchester United--are worth a gamble.
Not surprisingly, one of his picks is Aston Villa, from Birmingham, which will be floated on the London Stock Exchange this month in a deal sponsored by Albert E Sharp that values the club at 125.9 million pounds, or $200 million.
The big clubs with loyal followings have a bright future, as Davis and others see things, because they can sell every seat for years to come, with high profit margins as fans scramble to get in. They are also making money selling television rights, advertising and souvenir merchandise.
And if pay-per-view deals take off here--although the idea is still a bit of a wild card--the larger clubs will be the big beneficiaries.
"One of football's beauties is the security of earnings for the top clubs," Davis said.
At the monthly Sports Investor, editor Jay Stuart predicts the sector will grow for years. But Stuart agrees that only the top teams will likely thrive on stock markets, while medium-sized clubs could be squeezed mercilessly. "There's going to be some victims," Stuart predicted.
Smaller clubs also stand to get hurt as players, with new legal rights as free agents thanks to a European court ruling, can go where they want, cutting down on profits the little clubs made by selling stars.
The troubles of a small club listing on the stock market can be best illustrated by Millwall--an east London franchise that was demoted last year to second division, just one step above the lowest ranking in English soccer.
Millwall had spent lots of money building a new stadium and found itself deeply in debt as game attendance and television revenues dwindled.
Its stock plunged from 70 pence, or $1.12, per share to as low as 2 pence, or 3.2 cents. The shares were suspended from trading at a value of 4 pence and outside receivers were called in to try to resurrect the company.
Millwall is now pinning its hopes on a 10-million pound, or $16-million rescue package led by Greek-Cypriot businessman Theo Paphitis.
The plan gives shareholders the right to get more shares by kicking in another 3.36 million pounds, or $5.38 million, but the receivers warn that if the investors or creditors reject the plan, the club will be declared insolvent and liquidated.
Italian teams are taking a look at the London Stock Exchange as well. They've been influenced by the English clubs, but also could be deterred from listing at home on the Milan market because they are losing money and Milan regulators require three successive years of profits for any company seeking a listing.
AC Milan, owned by media mogul and former premier Silvio Berlusconi, could come first, analysts say. Managing director Adriano Galliani confirms the club might try to list in London, but not before 1999 or 2000.
Not that everybody in the world of European soccer thinks it's a good idea to link up with the financial wheelers and dealers.
FC Barcelona, one of the giants of Spanish soccer, has been evaluated at about 80 billion pesetas, or $560 million, but president Jose Luis Nunez says a stock exchange listing is not in the cards.
That would go against the "spirit of the club," Nunez said--although he wouldn't be surprised to see some of the bigger English clubs launch corporate takeovers of smaller Spanish rivals.