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  • Thumbnail for The economics of delisting: the case of European football
    The economics of delisting: the case of European football by Burbano, Santiago Alejandro

    Professional football teams that once chose to list their stock in the exchange markets have started to delist in the last few years. This study presents a modified version of Altman’s 1968 bankruptcy model and applies multivariate discriminant analysis to predict which financial and socioeconomic factors affect a team’s decision to delist from a stock market. Our non-metric dependent variable is listed/delisted teams, while our independent variables include a number of Altman’s financial ratios, GDP per capita, winning percentage, and two measures specific to soccer franchises–broadcasting and sponsorship revenues. Data are obtained for a total of 37 European teams, out of which 21 remained listed, while 16 were delisted at the time this study was written. Results suggest that the two main variables affecting a delisting decision are broadcasting revenues and working capital. Wealthier football teams that remain listed could benefit from our results by focusing on maintaining a positive working capital, while for smaller teams it might be wise to find alternative revenue sources other than TV revenues.