Analyzing how Ownership Structure Influences Football Stock Market Reactions to Sporting Outcome

Details

Supervisors

Iania, Leonardo

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

enThe purpose of this research is to examine how ownership structure influences stock market reactions to sporting outcomes in publicly listed European football clubs. While previous studies have mainly focused on the direct relationship between match results and stock price movements, this thesis addresses a gap in the literature by examining whether the presence of institutional investors moderates these reactions and leads to more rational pricing. More specifically, the study analyzes whether clubs with higher institutional ownership show weaker abnormal stock market reactions to wins and losses compared to clubs mostly held by retail investors. To explore these questions, a quantitative methodology is used combining ownership data, stock market data, and match results. The sample covers fourteen seasons, from 2010/2011 to 2023/2024, and includes four publicly listed European football clubs: AFC Ajax, Borussia Dortmund, Celtic FC, and Juventus FC. Stock market reactions are measured through an event-study framework, with three-day cumulative abnormal returns estimated through the Fama-French three-factor model. Regression models are then built using a nested specification approach, progressively adding explanatory variables. The empirical analysis includes club fixed effects to control for unobserved differences between clubs, as well as dummy variables to account for sporting factors that may influence stock market reactions. The findings confirm that match results significantly affect football stock prices. Wins are generally associated with positive abnormal returns, while losses generate stronger negative reactions. More importantly, the results suggest that the higher institutional ownership the smaller the magnitude of sentiment-driven price movements. Clubs with more institutional investors appear less sensitive to match results, indicating a more stable and efficient pricing process. However, this moderating effect is not uniform across all clubs and contexts. Overall, the results highlight that ownership structure is a relevant determinant of price efficiency in football stocks. These findings contribute to both sports finance and behavioral finance literature by showing how investor composition can shape market reactions in emotionally driven asset classes.