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Football float for Birmingham

Birmingham City, the First Division football club jointly owned by soft porn publisher David Sullivan, is planning a stock market flotation in the New Year despite warnings that only a few clubs will be able to cash in the game's revitalised popularity.

The club, which has never won a major honour in its 121-year history, is looking to raise pounds 5m on the junior Alternative Investment Market to further develop its St. Andrews ground and strengthen manager Trevor Francis's squad.

News of Birmingham's flotation plans follows hard on the heels of Premiership club Southampton's pounds 10m reverse takeover of a quoted retirement home group and further details of Sunderland's imminent pounds 47.4m stock market debut.

Separately, the Japanese investment bank Nomura yesterday issued warrants on a new football index to track the share prices of quoted Premiership clubs. The warrants will give investors geared exposure to what it calls "this emerging sub-sector of the leisure industry".

A total of eight football clubs, including Manchester United, which this entered the FTSE index of Britain's top 250 firms, currently have a Stock Exchange listing, either on the main market or on AIM. Others to have signalled their intention to float include Newcastle, West Bromwich Albion and even Carlisle.

"Football is in vogue for a good reason," says Julian Easthope, leisure analyst at Swiss investment bank UBS. "The game in the UK has been under- capitalised and even the amount raised for football clubs so far is small, given it is the biggest sport in Britain."

Investors are banking on what television mogul Greg Dyke recently described as the "untold riches" that await top clubs from the introduction of pay- per-view television as early as next season. However, there are growing concerns that only the top Premiership teams will emerge as winners.

"The big clubs will always do extremely well as media earnings will go to the most successful clubs," said Mr Easthope. "Things get more speculative at the bottom end of the Premiership and in the First Division. It just depends on what risk profile you want in your portfolio."

Top clubs are pushing for an early introduction of pay-per-view to coincide with the next year's planned launch of digital television.