Investment: Enic is flirting with relegation

ENIC, the former investment trust which has been busily buying stakes in football clubs across Europe, has a fascination with the beautiful game that is hard to fathom. Apart from the problem of winning things on the pitch, there are the fans, who are deeply suspicious of corporate management.

Then, just when Enic gets those two sorted out, up pops Uefa, the sport's European governing body, to say it doesn't like clubs owned by the same people playing in the same competition. With interests in five clubs already, it's no wonder Enic shares are sliding towards relegation - they have halved in the past six months.

But it's not deterred. An English Premier League club is the jewel Enic really craves - it has already had a bid for Tottenham Hotspur turned down by chairman Alan Sugar.

Uefa's ruling, though, is crucial. Clearly, having to sell would blow Enic's strategy out of the water. Another option may be to sell the marketing rights, as others facing cross-ownership problems have reportedly done. But, given that Enic's aim is to develop its brands, anything that dilutes that must be bad.

Another headache is that away from football, everything's still in its fledgling stages. Enic has only had the Warner Bros Studio stores for a few months, but has been in control long enough to concede that its timing could have been better. Similarly, any pay-off from Warner Bros' themed restaurants is years away.

Enic has a point when it says that as the stores were only on board from May, the pounds 4.5m loss in the 15 months to June is meaningless. But chairman Howard Stanton is already describing Enic as a long-term investment whose real potential won't immediately shine through. Investors tempted by the allure of football should take a similar long-term view. The shares, which fell 1p to 143p yesterday, are still high enough.