City predators target football

The share prices of six of the Premiership's 11 quoted clubs have plummeted to rock bottom.

The prices of four of the remaining five are within pennies of their lowest level in the past 12 months.

The average market value of a quoted Premiership football club, excluding Manchester United, has dropped to £28.5m, or the same as the cost to the champions of buying Juan Sebastian Veron.

Indeed, were anyone crazy enough to do so, they could buy both Southampton and Leicester City for the same cost as the Argentine midfielder.

In the Midlands, Aston Villa now have the same market value (£18m) as Rio Ferdinand.

The quoted value of Premiership clubs has fallen so dramatically over the past 12 months, that nearly half a billion pounds has been wiped off their respective share prices.

Football may be our national game, a sport that has more column inches devoted to it in a month than every other sport combined over a year, but on the Stock Market, football has become marginalised. Last week, for example, the total value of the shares traded in Charlton was £105.30; in Villa it was £200.66 and in Chelsea £718.08.

Hardly the stuff of major league wheeling and dealing. On the Stock Market at least, football is in danger of becoming the next dotcom phenomenon.

So, does it matter? Values of all quoted companies are bound to fluctuate - look at Vodafone, Shell or ICI.

What's different about a football club? The answer is nothing.

In the financial scheme of things, a quoted football club on the Stock Exchange is very small beer indeed.

On the same day that 127 Villa shares changed hands, nearly 330m Vodafone shares were traded. What such a dramatic fall in value does mean is that every quoted football club are now a potential takeover target, a cause of some consternation among supporters.

The fall in share value has been caused primarily by poor financial management at many clubs.

Despite massive injections of income, football clubs tend to spend every penny, most of it on players' wages.

This has led to a mixed response from City investors.

There are those, such as Barclays Global Investment, who have recently sold their stake in Leeds United and Tottenham.

Conversely, some investors see football clubs as good value.

Organisations such as Granada Media have bought into a numberof clubs, including Arsenal, where a five per cent stake cost them £27m.

Granada saw a further opportunity and paid £20m for a 50 per cent holding in Arsenal Broadband - a company set up to exploit Arsenal's internet opportunities.

In June 1998, Rupert Murdoch was prepared to pay £623m in order to buy Manchester United outright.

Today, for exactly the same investment, he could buy every single quoted Premiership club, including United, who have lost over £286m in value since the audacious antipodean bid.

It is entirely possible that, three years on, unwelcome predators are sizing up their footballing options.