Investing in football may be financial own goal

While horses, dogs and memorabilia are better investment bets than football, they won't make you rich and you may lose what you put in, warns LucyWarwick-ChingAnyone interested in racing a greyhound should understand that it is an emotional rather than a financial investment, and any moneymade is down to luck

Football fans are being asked once again to help their club as English first division side Leicester City struggles to stay in business. But while their hearts will favour helping to keep the club afloat, experts say their heads should stop them wasting their money.

Those who cannot resist the temptation to invest in sport, say financial advisers, should look at racehorses, greyhounds or even sporting memorabilia. But steer clear of football, unless you have money to burn.

One only has to look at the lake that is Shelbourne Football Club's Dublin ground, Tolka Park, to realise how quickly the financial tide can turn for even the most successful clubs. When the Tolka river burst its banks last week, it swept away the Dublin club's financial security.

Irish football has seen an all-too-regular list of football casualties down the years - Dundalk, Longford Town and, more recently Galway United.

"The trouble is," says Mr Ian Millward at financial advisers RJ Temple, "that most of the clubs are poor businesses. They have to contend with the ups and downs of performance on the pitch as well as transfer deals, sponsorship and broadcasting rights - and rocketing wages."

He points out that the value of the clubs listed on the stock market, which include Manchester United, Tottenham Hotspur and Queens Park Rangers, has plummeted since the start of the season. Shares in Manchester United, the richest football club in the world, have collapsed from £4 (€6.3) in 1999 to just over £1.

Even those who elected to spread the risk and invest in a fund, such as Singer & Friedlander's Football Fund, which closed in June this year, have lost money. The fund raised £30 million when it was launched in 1997, but has shrunk to about £ 7 million.

So where in sport can you make money?

After football, dog racing is the second-biggest spectator sport in Britain, with more than 70,000 races run each year in the UK. The British Greyhound Racing Board (BGRB) says there are substantial financial rewards on offer if your dog turns out to be a champion. "While winners at small tracks such as Harlow pick up only about £45, the Irish Derby winners can collect £100,000," says Ms Emma Johns at the BGRB.

These winnings can be boosted by stud fees. "Top stud dogs can command £500 a throw for a champion greyhound and it's not unusual for a top dog to be studded twice a week for up to seven years," says Ms Johns.

However, your chances of picking a champion are small. A puppy will set you back £300 and has to be reared for 18 months at a cost of about £2 to £3 a day before it is allowed to run.

To avoid the uncertainty of whether a winner is being reared, some owners prefer to buy a dog that is proven and ready to run. These can cost between £1,000 and £3,000, even at the bottom end of the market, and some rich enthusiasts have been known to pay up to £20,000 for a decent graded dog.

"Anyone interested in racing a greyhound should understand that it's an emotional rather than a financial investment, and any money made is down to luck," says Ms Johns.

However, many people have reaped handsome financial rewards from sport. Sir Alex Ferguson, Manchester United's manager, has enjoyed good returns from his racehorse, as have Robbie Fowler and Steve McManaman, both former Liverpool footballers.

The cheapest and easiest way to invest in a horse is as part of a syndicate, where the costs of ownership are shared. Syndicates can charge monthly subscriptions for stakes in a number of horses, or offer a straight shareholding for a lump sum.

Alternatively you could go it alone, but with the average racehorse costing £18,000, it pays to know what you are looking for. Horses are sold by big auction houses such as Tattersalls, direct from stables and through private sales. Mr Paul Struthers, marketing manager at the British Horseracing Board (BHB), suggests employing a specialist who knows the tricks of the trade.

This should be either a bloodstock agent, who will usually charge 5 per cent commission, or a trainer, who may not charge but will expect to train the horse.

A horse that has been successful can be sold to another syndicate, owner or stud farm. There is a list of syndicates on the BHB website at www.bhb.co.uk

Like greyhound racing, there are no guarantees in horse racing. Your horse could win a fantastic prize, but it could break a leg or fall ill on the day of a big race.

Mr Struthers says: "Although there is the potential to make a lot of money we don't recommend people go into the business purely as an investment. There are some very successful horses, but finding a winning horse is more down to luck than any particular skill or judgment. Investors have to be prepared to lose what they put in."

Mr Millward says some sporting memorabilia are worth investing in. "Most fans will have old programmes lying around somewhere, though most of them, including the 1966 World Cup Final programme, will not be worth a great deal."

But programmes for matches before the 1938-39 season, when the onset of war disrupted the Football League, can change hands for as much as £300 each, although they are unlikely to increase much in value. There are of course more straightforward ways to support a club in need. Affinity credit cards, for example, offer low interest rates to attract supporters.

Bank of Scotland, for example, offers a rate of 15.9 per cent a year, with an initial £2.50 given to clubs for every card taken out and 25p for every £100 spent. - (Financial Times Service)