The Impact of Transfers on the Dynamics of Football Clubs' Stock Prices

The goal of this research was to analyze the impact of transfers on the dynamics of football clubs’ stock prices. Since earlier studies were published, years have passed and football business underwent many changes. Thus, it was necessary to explore the relationship between transfers and football clubs’ stocks return on new database. The scientific novelty of this work lies in the fact that the actual data was investigated. A hand-collected dataset which includes the seasons from 2014/2015 to 2017/2018 was studied. The database consisted of clubs representing different countries, and was not limited to teams from the UK, as was the case in earlier studies. Understanding the relationship between transfers and the dynamics of football clubs’ stock prices could help investors to create profitable investment strategies for short-run period and thereby diversify their portfolio. Thus, the study has practical value. In addition, this work can be useful for clubs studying IPO opportunities. Event study methodology was applied to test the hypotheses. The study showed that at the event window (-1, 1) the average abnormal return of football clubs’ stocks in case of announcement about player acquisition is negative and equal to -1.04%. Sale of a player causes positive return, which is equal to 1.01%. This means that investors regard transfers not from a sports point of view, but from a financial one. The results obtained are statistically significant and are in line with the previous studies performed by other researches.