Abstract
This study investigated the behaviour of the share prices of the listed European football clubs for three events: significant player purchases, significant player sales, and confirmed domestic league rankings for a season. The event dates used in this study were the date of the player transfers for both player purchases and sales, and the date of the latest match played, which confirmed the club’s domestic league ranking for that season. An event-study approach was used for this study and the cumulative abnormal returns (CARs) were investigated for each event window, which was five trading days (1 week) before and after the event dates. It was found that the listed European football clubs investigated in this study had mostly significant negative reactions in their share prices to the event type of purchases of significant players. Similar findings were found for the sale of significant players and confirmed domestic league rankings achieved. However, it was noted that there were positive daily movements in the abnormal returns at some point for the majority of the events investigated. A possible explanation for this, is that there were other factors influencing the behaviour of the share prices and the movements were therefore not only attributable to the events being investigated. This resulted in no definitive conclusions being drawn on the impact of the investigated variables.
Keywords : Listed football clubs, player transfers, team performance, share price behaviour, event study, efficient market hypothesis.