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The impact of football games and sporting performance on intra-day fan token returns

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Abstract

This study undertakes an in-depth examination of how football matches and related sporting performance influence the intraday financial performance of corresponding blockchain-based fan tokens. Utilizing an event study encompassing eight distinct fan tokens and 325 football matches, we find a statistically significant average decline of 0.8% in fan token returns during the course of a football match, which subsequently decreases by an additional 0.7% in the post-match phase. Notably, a “loss effect” is identified, where the market reaction to losses is larger compared to wins. Furthermore, our study reveals large abnormal trading volumes before games, most prominently before UEFA Champions League matches, indicating anticipatory market behaviors. Further analysis establishes that abnormal fan token returns are impacted by various match-specific characteristics, such as the game outcome and form, predominantly before and during the match but not after. This distinct correlation between football games, sporting performance, and fan token returns has implications for a wide array of stakeholders and may suggest a challenge for investor (consumer) protection.

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Data availability

Data is publicly available from transfermarkt.de and binance.com.

Code availability

Materials and code can be obtained from the corresponding author upon reasonable request.

Notes

  1. One exception is the study by Ehrmann and Jansen (2016), who analyze football games of Italy and France at the 2010 FIFA World Cup in South Africa that took place when stock markets were open. The authors focus on the last games of Group F (Slovakia vs. Italy and Paraguay vs. New Zealand) and Group A (France vs. South Africa and Mexico vs. Uruguay) using high-frequency data of the company STMicroelectronics, which was listed on both the Milan and the Paris stock exchange.

  2. By December 2021, Bitcoin traded below $20,000, before rising over $60,000 March 2021, again dropping to $30,000 in July 2021 and rising to $60,000 in late 2021. Accordingly, it is conceivable that volatile phases of Bitcoin also had an effect on the fan token market and motivates the application of an alternative model for the purpose of robustness.

  3. All variables included in this study underwent extensive pre-analysis screening. In order to assess their suitability for inclusion in the models, a correlation analysis was conducted and variance inflation factors (VIFs) were calculated. It should be noted that the purpose of this procedure was to ensure the avoidance of multicollinearity and the establishment of substantial associations for the subsequent analyses. Detailed results of this preliminary analysis can be made available upon request.

  4. For purposes of robustness, the regression models were further tested using CAARs computed based on the constant mean return model. The results obtained were largely consistent with our initial findings, indicating the reliability of the models applied. However, slight variations in the magnitude of the coefficients were observed, indicating minor – and logical – differences in effect size. These differences do not alter the overall conclusions but provide further nuances in our understanding of the models. Further details can be assessed in Table A.1 in the appendix.

  5. Given the background of the COVID-19 pandemic at the time of data collection, approximately 25% of matches in our sample were played without spectators and consequently have a value of 0. Given this background, attendance cannot potentially be fully interpreted as a proxy for reputation, unlike in existing studies (Gimet and Montchaud 2016).

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Funding

The authors did not receive support from any organization for the submitted work.

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Authors and Affiliations

  1. Blockchain Research Lab, Weidestraße 120B, 22083, Hamburg, Germany

    Lennart Ante & Benjamin Schellinger

  2. Department of Business Administration, School of Social Sciences, Reykjavik University, Reykjavik, Iceland

    Ender Demir

Authors
  1. Lennart Ante
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  2. Benjamin Schellinger
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  3. Ender Demir
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection and analysis were performed by LA. The first draft of the manuscript was written by all authors and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

Corresponding author

Correspondence to Lennart Ante.

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Appendix

Appendix

See Figs. 3, 4, 5 and 6.

See Table 

Table 9 Regression models predicting cumulative abnormal return on the basis of the constant mean return model
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9

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Ante, L., Schellinger, B. & Demir, E. The impact of football games and sporting performance on intra-day fan token returns. J Bus Econ (2024). https://doi.org/10.1007/s11573-023-01187-z

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  • DOI: https://doi.org/10.1007/s11573-023-01187-z

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