Multi-club Ownership (MCO) is the fastest establishing buzzword in private investment across football today. The focus, of course, lies in European football with roots reaching across the globe in multiple countries.
What is MCO? UEFA European Club Investment & Finance Landscape defines ‘multi-club ownership’ a situation where a party exerts control and/or decisive influence over more than one club, while ‘multi-club investment’ refers to a situation where a party has investment interests in more than one club (without exerting control or influence). In the recent few years, the rapid spread of MCO network has been astounding. What began as a shareholding idea has now over 125+ operating MCO groups, a mix of small and big players, having around 380 clubs and over 13,000 players under them.
Today’s blog is to understand the MCO benefits and its presence at various levels of European football.
Emergence of MCO
Multi club ownerships is not a recent phenomenon. Going back to the early 90’s English National Investment Company (ENIC) had bought shares of multiple football clubs including Tottenham Hotspur, Rangers FC, Slavia Prague, AEK Athens purely as an investment option. Later on, they disposed stakes in other clubs to fund the investment in acquiring 85% of Tottenham. The idea then began to take shape in the form of Red Bull acquiring clubs for its marketing purposes followed by the formation of City Football Group (CFG), probably the first serous pursuer of the modern day MCO structure with its 13 football clubs spread across North America, South America, Europe, Asia and Australia.
The success of CFG followed by a combination of macroeconomic factors, financial weaknesses of multiple football clubs accelerated by COVID and emergence of football as asset class investments have resulted in an increasing number of investors, both private and institutional, to venture in the multi-ownership route.
The attractiveness of MCOs, for investors and club owners alike, lies in the core word ‘synergy’. A multi-pronged approach, the ‘synergies’ created by the group clubs can offer various benefits to its stakeholders. From player development giving them a clear pathway to stronger commercial value to partners, a MCO would be in a better position to offer this, and more.
Spread Across Leagues
Over the past few years sports, especially football, has transitioned rapidly from vanity to asset class investment leading to involvement of institutional investors like private equity (PE) or venture capital (VC) firms, family offices etc. With an increasing number of such institutional investors coming in, as a natural diversification and risk management, a greater number of MCO’s are getting established across European football leagues. Clubs from higher revenue generating ‘big five’ leagues have become the primary target followed by the clubs from lower-division leagues. As per UEFA Benchmarking Report 2024, 105 top-division clubs (13% of all UEFA clubs) have a cross-investment relationship with one or more other clubs.
Although this is not the universal trend, there are multiple groups who have consciously stayed in the lower division leagues with the aim of increase in valuation / revenue with the advancement in leagues.
Across the top-30 highest revenue generating clubs in 23/24:
- 47% or 14 clubs are backed by investors with a private equity (PE) connect.
- 60% or 18 of the top 30 money-league clubs are part of the multi-club ownership (MCO) network
- 30% or 9 of the top 30 money-league clubs are part of both, the MCO network as well as PE connected
The trend is expected to continue at a faster pace. The chart displays the entrenchment of MCO-affiliated clubs across the ‘big five’ leagues:
Challenges in MCO Operations
Over the time, each MCO seems to be operating in a pyramid-like structure with a flagship club, usually the most popular and highest revenue generating club like Manchester City or Chelsea, at the top and the rest of the clubs in group tend to act as the feeder clubs. This is precisely where the fans have huge issues with such groups. They simply do not want to act as the second fiddle to a larger club. The tactics brought about by MCO makes them feel like their club’s traditions or local identity are being diluted. Although, some MCO groups (like the erstwhile 777 Partners) do claim to have a parallel structure, but that’s a rarity in practice.
Another challenge to the MCO group is investing significant amount in developing and building infrastructure of the group clubs to bring them to the flagship club’s standard.
This begs a question to the MCO groups – Why are each club within the group not treated independently with local flavour while maintaining the group’s global brand positioning. Each league has different sensibilities and to change the change the character of the club of that league with the aim of supporting the flagship club is a big challenge and requires significant resources. Rather, an option could be to make the club best in their individual league and not only act as feeder. In other words, maintain and develop the club’s identity independently. Red Bull, as an example, has been working on that principle.
Possibly, clubs could take a look at other industries and borrow some ideas from them. Like how brands like KFC, Pizza Hut or Dominos and the likes added local flavour to their consistent global positioning. That way, local fans would also be happy, feel a part of the bigger group which further adds to the group’s goal of becoming financial stable. SBI’s Masters in Football Business and Management program has a dedicated module with the best speakers and material on the emergence of multi club ownership and their growth. You can have a look at the course here
In Conclusion
Multi-club ownership is here to stay and grow. With each passing year, the number of clubs becoming part of such groups will only grow. It’s time to create the best business practice structures, from governance to regulatory controls. A large part of the role will have to be played by the governing bodies like FIFA and individual federations.
It’s going to be a dominant feature in European competitions and tournaments like Club World Cup, where the intervention and regulation will be most required.
