Interview: "Volatile" transfer income should not necessarily be discounted when investing in football clubs

14 April 2020

FDJ
Photo: PA Images "Ajax sold Frenkie de Jong to Barcelona for €75 million and their market cap was just €250 million with about €50 million in cash. I thought, 'Hold on, something doesn't make sense here - they're getting all this cash for one player and the entire club is valued at not that much more than that player," said equity analyst Trion Reid of Germany's Berenberg Bank.

Investors are typically hesitant to invest in listed football clubs because of the unpredictable nature of their revenue lines.

However, for some listed clubs - such as Borussia Dortmund, Ajax and Lyon - transfers are an integral part of their business and should be considered a genuine revenue line.

The coronavirus pandemic will undoubtedly have a negative impact on the transfer market, but it has also potentially made it easier for clubs to use the markets to raise equity.

Emil Gjerding Nielson nielson@offthepitch.com

It's wrong to discount transfer income when looking to invest in football clubs, according to equity analyst Trion Reid of Germany's Berenberg Bank. Reid oversees the bank's coverage of four of the major European clubs listed on the stock markets: Dortmund, Lyon, Ajax and Juventus. 

They're getting all this cash for one player and the entire club is valued at not that much more than that player

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