Dan Atkinson and Mail & Guardian reporter
The World Cup hysteria which has obsessed South Africa confirmed the popularity of football, not to mention the power of marketing to induce frenzied emotion.
This bodes well for the owners of any football teams which are planning to follow their overseas counterparts and list on the Johannesburg Stock Exchange. Kaiser Chiefs is expected to be the first soccer club to dip a toe into the stock markets’ turbulent waters. But looking at overseas examples, such a listing could provide as “disappointing” a performance as Bafana Bafana’s World Cup attempt.
Some years ago, an entrepreneurially minded pupil at one of the larger British public schools ran a book whenever the position of school captain fell vacant.
But this was a bookmaking operation with a difference. Out in the real world, the turf accountant’s book will, from time to time, take the most enormous hit as long shots storm home and favourites fail miserably to perform. Not this book.
Time after time our juvenile Joe Coral cleaned up. Asked the secret of his success, he was candid. The punters, he said, always made the mistake of confusing a bet with a vote: large sums would pile on easygoing nice guys, while few had the money-spinning instinct to back the proto-fascists who invariably landed the job.
So it seems to go with those who invest in the beautiful game.
The drum beat of France 98 hype seems to have sent football stocks into a fit of stage-fright. Some of the less edifying results: Tottenham Hotspur – 110p in April last year, 66,5p June
1998; Chelsea Village -129p in April last year, 73,5p June 1998.
Football-share optimists can always point to those stocks, such as Manchester United, which have weathered market conditions in a rather more robust way. But together all quoted clubs have dropped on average by more than 35% since the early days of 1997, when the sector seemed to be coming of age.
Football shares were always around, most of them tucked away in one of those corners of the old stock exchange reserved for secondary trading or for the shares of start-up emerald mines.
But the shareholders of yesteryear had more in common with those who buy stock in steam railways than with serious investors: they were fans. Few expected to make money.
This attitude carried over into the new era of full-blown stock-market flotation; at one point, it was calculated that Tottenham Hotspur was effectively takeover-proof as fans who had bought the minimum 100 shares had given them away or sold them.
No proper register could be kept, thus no predator could track down all his targets (Spurs retaliated by nearly going bust, but that’s another story).
But the Nineties saw the development of that dangerous hybrid, the half- fan, half-investor.
Ask this individual why he has sunk cash into football and he will burble about TV deals, sponsorship arrangements, the potential to develop the old ground, the potential to develop the new ground and the buoyant state of the transfer market.
Our man is confusing two different things. A lot of money goes through football, but that is another way of saying that football gets through a lot of money. It is true that the traditional cashflow businesses catering for working-class pastimes will tend to produce a decent return through good times and bad.
But football clubs do not fit into this scene. They have more in common with one-star pop-management companies that vanish from view once the one star has retired/died of a drug overdose.
Should you wish to make money out of football, buy shares in the outfits that themselves make money out of football. There are the equipment- makers or sponsors, the souvenir manufacturers, and the “death-burger” caterers.
You can always take a punt on the bookies, who do nicely, probably because they have never confused a bet with a vote.