A study by Sabancı Business School indicates that social media is a strong indicator of match expectations and investors’ estimates about stock prices. The study was developed under the leadership of Altuğ Tanaltay, member of Sabancı University Faculty of Engineering and Natural Sciences and with the participation of Nihat Kasap, Dean of Sabancı Business School, Raha Akhavan-Tabatabaei, faculty member at Sabancı Business School, and Amirreza Safari Langroudi, graduate of Sabancı University Business Analytics Graduate Program, who works as Business Analytics Team Leader at Alibaba Travels Co.
Until the pandemic, the football industry was one of the sectors that grew and developed every year. The football industry in Turkey grew by 5 times, had 2,5 million new supporters and reached a market volume of 400 million USD during the 10 years preceding the pandemic. Stocks of the big 4 Turkish clubs, Fenerbahçe, Galatasaray, Beşiktaş and Trabzonspor, have been publicly traded in Borsa Istanbul since the early 2000s. Naturally, such publicly-listed companies may face risks both from sports and financial markets perspectives. The share price performance of a football club is directly impacted by its success on the pitch. Winning or losing a match results in an increase or decrease of share price. Moreover, as a successful team becomes more popular, its merchandising, advertising and broadcasting revenues are known to grow.
The study carried out by Sabancı University demonstrates how such a large market is impacted by social media. The study is entitled "Can social media estimate share prices of football clubs? Turkish teams and Twitter example", and it indicates that social media is a strong indicator about match expectations and investors’ estimates about stock prices. The study was developed under the leadership of Altuğ Tanaltay, member of Sabancı University Faculty of Engineering and Natural Sciences and with the participation of Nihat Kasap, Dean of Sabancı Business School, Raha Akhavan-Tabatabaei, faculty member at Sabancı Business School, and Amirreza Safari Langroudi, graduate of Sabancı University Business Analytics Graduate Program, who works as Business Analytics Team Leader at Alibaba Travels Co.
Tanaltay said “Football clubs operate in the same way as the other companies that we know, they are active in numerous fields of business, and their overall success is related not only to their sporting performance but also financial performance, one of the most important indicators of which is their stock exchange performance. In this context, our goal is to look for answers to the questions of decision-makers.”
In the study, three different methods were used that were based on match results, match expectations and the importance of a specific match to estimate the share price of sports clubs. Altuğ Tanaltay said the following about the study: “Looking at match expectations, it can be seen that betting odds are important indicators of investors’ sentiment. In our study, we propose to factor in sentiments from Twitter data as another indicator of match expectations and we analyze the links between the match results, social media sentiments and share price changes of the big four Turkish football teams. Our findings show that social media is a strong indicator of match expectations and investors’ estimates of share prices.”
Tanaltay continued, “We used textual data that we obtained from 13 million tweets about the big 4 from 2017 to 2019 to calculate daily sentiment indices about the teams. In addition, we used the results of 800 matches played between 2004 and 2019 and betting odds published on betting sites to estimate the change of share prices of the clubs starting from their IPO date and in which direction such change occurs by using separate mathematical models.”