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First Chelsea; now, maybe, Manchester United. Does this week's news that the bluest of blue-chip football plcs has received a preliminary takeover approach signal that the sector is poised to hang up its stock market boots after a career of more than 20 years?

It certainly appears that way. Away from the limelight trained on these two much-written-about situations, other clubs have been quietly delisting or downlisting to markets with less onerous compliance requirements. A glance through current market listings turns up nine football clubs, ranging from Manchester to Sheffield United. In 2001, there were 20.

“Lots of clubs have moved off or down the market,” says Bob Murray, chairman of Sunderland, the former Premiership club that currently plays in The Championship, in effect the English second division.

Sunderland itself delisted in the summer, nearly eight years after a flotation that raised £10.7m.

Asked to enumerate the reasons for this decision, Mr Murray cites zero interest from investors, nil chance of raising new funds, low market capitalisation and the club's relegation at the end of the 2002-03 season.

This left the Black Cats confronting the costs and management time associated with a listing on a significantly reduced turnover.

Mr Murray continues to argue, nonetheless, that “the stock exchange was very much right for us”.

It provided capital for the club's landmark Stadium of Light home; it facilitated the funding of its football academy; and it encouraged financial discipline and efficient practice.

Like many others, the Sunderland chairman believes Manchester United could still support a stock market listing even in the present environment. “We are talking about the world's biggest-branded football club,” he says. “It's a very, very attractive business proposition.”

David Jones, finance director of Southampton, offers three reasons for the south-coast Premiership club's decision to downlist. “We have downlisted to Aim largely because compliance on a full listing was too onerous,” he says.

In addition, there were “tax breaks to shareholders” that were not available on the full market, plus there was “not a huge volume of trading in our shares”.

“The main reason we listed,” he says, “was to get the stadium built”. Like Sunderland, Southampton now play their home matches in a highly-regarded new stadium.

Being a stock exchange-traded public company, he argues, helped to convince the club's main lender to lend it the money.

He concedes that “possibly” we are witnessing the end of an era for football clubs and the stock market. “We have still got over 3,000 shareholders,” he says. “To delist totally, we would need some big investors to buy up the others.”

One club that now looks likely to retain its listing for some time to come is Newcastle United, Sunderland's north-east rivals, who floated in 1997.

“We have got more shareholders [20,000] in this football club than any other club in the league,” says Freddy Shepherd, Newcastle's chairman. “They want to win on Saturdays but they want a strong club and a strong club financially.” Newcastle this week reported nearly flat pre-tax profit of £4.22m for the year to July 31 on turnover of £90.5m.

It is possible to foresee circumstances in which a second wave of football flotations could materialise involving some of the elite names in the European game. This might occur if a European Superleague made up of the Continent's top clubs were ever created.

Some observers regard this as a distinct possibility in the medium term, albeit probably not first withouta trial of strength withthe sport's international authorities.

The innovation that might prompt investors to take renewed interest in the sector would be if such a league were accompanied by the abolition of relegation for the big clubs participating in it. At a stroke, this would remove much of the uncertainty that can make sport and big business uneasy bedfellows.

It is hard to think of a financial shock in any business comparable to the impact of relegation from the Premier League for an English football club.

As Southampton's Mr Jones observes: “The fact is, three out of 20 [Premiership clubs] will get relegated, which is quite a high risk,” although “there is plenty of upside as well”.

That, though, is for the future. For the moment it looks like football's flirtation with the stock market is heading, with rare exceptions, for an early bath.

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