Corporate Finance of Football Companies: An Analysis from the Perspective of Different Fan Groups

Abstract

German football clubs’ licensed player departments (entitled as “football companies”) have complex governance structures. Football fans, who are often members of football clubs, are one of the most important groups of stakeholders for these companies. The fans are of particular economic relevance for the companies and have potential control and participation rights. Hence, it is surprising that previous literature does not consider football fans’ motivation and interest in the context of football companies’ financial decisions. We address this gap in literature by evaluating football companies’ external financial instruments from the perspective of different fan groups applying their specific risk-return criteria. Based on literature, we derive three groups of fans who differ regarding their motivation, interests, and control and participation rights: the “consumption orientated fan”, the “experience orientated fan”, and the “football centered fan”. We find that, in contrast to the “experience orientated fan”, the “consumption orientated” and “football centered fan” are skeptical regarding the use of asset backed securities as a financial instrument. The “football centered fan” generally refuses a sale and lease back funding and has a critical view on private equity funding as well as silent partnership.

Keywords: Sports Economics, Corporate Finance, Football Companies, Fan Groups

JEL Classification: G30, G31, G32, G34