An inside perspective to the development of stock prices and business models for selected Danish football clubs

Frank Jensen & Jesper Corneille Dupont

Student thesis: Master thesis

Abstract

The purpose of this thesis was to analyse a selection of football stocks and their connection with different business models and a comparable stock index over the five year period from 2006 to 2010. The stock prices of football stocks have fluctuated a great deal, only two stocks managed to beat the comparable index between 2006 and 2008. From 2008 to 2010 no stocks proved to do considerably better than the comparable index. There is a high demand for the five football stocks since they are traded more than the comparable index over the past year. Meanwhile, the companies behind the five football shares have lost a great deal of the investor‟s capital. A statistical analysis proved that there was a correlation between the five football stocks, however from a practical perspective there was none. Accounting analysis of the selected clubs revealed a tendency towards spending every penny earned to achieve maximum success which caused the clubs to use different strategies. In an effort to understand the nature of the clubs, a model containing four different strategies was developed and applied to the clubs. There is no indication of a superior strategy or connection between the clubs‟ selected strategy and financial achievements. Different theoretical perspectives such as Red Ocean Strategy, Stakeholder Analysis and Game Theory were applied to support the analysis. The theoretical perspectives indicate that the industry and the organisations connected to it are interested in maximising the clubs‟ success on the field at the expense of financial surpluses. The results indicate that the stock quotes of the selected football stocks cannot be explained by either business model or a comparable index.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2011
Number of pages118