Over the Moon or Sick as a Parrot: The Effects of Football Results on a Club's Share Price

31 Pages Posted: 1 Jul 2009

See all articles by Adrian R. Bell

Adrian R. Bell

University of Reading - ICMA Centre

Chris Brooks

University of Reading - ICMA Centre

David Matthews

University of Reading - ICMA Centre

Charles Sutcliffe

University of Reading - ICMA Centre

Date Written: July 1, 2009

Abstract

This paper considers the impact of match results on the stock returns of English football clubs. We propose that the magnitude of the response to a given result depends on the importance of the game, which is measured in two ways. First, we consider the extent to which the clubs are close rivals vying for similar league positions, as winning such games is particularly significant. Second, we argue that each individual game becomes more important for those clubs likely to be promoted or relegated as the season draws to a close, since a given match will have increasing information content concerning the final league position of the club. Using a fairly large panel comprising data for 19 clubs, we find that the unexpected parts of both the points and the number of goals ahead from the match do affect stock prices. There is also some limited support for the notion that stock prices are more affected by the results of important matches.

Keywords: soccer results, football clubs, stock returns, efficient markets hypothesis

JEL Classification: G12, G14, L83

Suggested Citation

Bell, Adrian R. and Brooks, Chris and Matthews, David and Sutcliffe, Charles M., Over the Moon or Sick as a Parrot: The Effects of Football Results on a Club's Share Price (July 1, 2009). Available at SSRN: https://ssrn.com/abstract=1428452 or http://dx.doi.org/10.2139/ssrn.1428452

Adrian R. Bell

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Chris Brooks (Contact Author)

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom
+44 118 931 82 39 (Phone)
+44 118 931 47 41 (Fax)

David Matthews

University of Reading - ICMA Centre

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Charles M. Sutcliffe

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

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