In an one-of-a-kind investment, Bright Path Sports Partners, a private equity firm deploying Native American investment capital into professional sports, entertainment & ancillary opportunities, has completed a 44% stake acquisition in Gamechanger 20, the owner of Ipswich Town FC. In another development, Canadian rapper Drake has become an investor of Serie A club Venezia FC
With the ever-increasing private capital investments in European football, we felt it best to share an updated status in the ‘big five’ leagues to our readers. This blog looks at the current status in
- Private capital invested clubs
- Multi-club ownership network club
- Clubs with us-based participation
Private Equity, VC or Private Debt
According to Pitchbook, around a third, 33 of 96, of European football clubs in the ‘big five’ leagues in 24/25 season have financial backing from private equity, venture capital or private debt firms. In our previous blog we discussed about the entry of private capital as a consequence of financial crisis ballooning primarily due to the pandemic. The growth can be seen from the fact that in 23/24, dealmakers invested €4.9bn in European ‘big five’ league clubs up from just €66.7mn in 2018
As the 24/25 season begins, the graph shares the number of clubs having PE (private equity), VC (venture capital) or private debt backing in each league
US Participation
With the increase in Ipswich Town Fc stake, American investors have further consolidated their presence in the European football. Amongst the ‘big five’ football leagues, there seems to be a particular liking towards the English Premier League J 50% of the clubs playing in the 24/25 season have some sort of US participation. Highest viewership, popularity and high revenue generation capability, favourable investment climate and geo-political favorability makes it the most in-demand choice. This is followed by Italian Serie A, French Ligue 1, Spanish LALIGA in that order (as shown in infographic)
The 50+1 rule present in German Bundesliga which refers to the need for members of a club to hold 50 percent, plus one more vote, of voting rights i.e. a majority. In other words, the fans have the greater say in running the club making it the last choice for any prospective investor, let alone US based
On the other hand, the recent ‘disruptions’ particularly by the US based owners of Chelsea FC in completely revamping the sporting squad and yet failing to qualify for Champions League consequently resulting in a considerable financial impact has reportedly deterred some prospective US investors. How this plays out in future is for all to see
Multi-Club Ownership
An evolution from private capital investment is the establishment of the multi-club ownership (MCO) structure. 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)
For the 2024/25 season, 40.6% i.e. 39 clubs of the ‘big five leagues’ are a part of the MCO network in one way, up from 36.7% two seasons ago. The infographic gives a snapshot of the clubs associated with MCO. Further, 10 of the top 30 revenue generating clubs are part of both, the MCO network as well as PE connected. Interestingly, most of the active MCOs are coincidentally US investors
In the 2024-25 European club competitions, we will see a lot of clubs in the MCO network. As per CIES Sports Intelligence, in the new expanded Champions League, 20 of 36 clubs (55%) are involved in the MCO network. Further, 14 of them are directly or indirectly linked with another club in the competition. In the Manchester City – Girona, Manchester United – OGC Nice (Europa League) cases, UEFA club financial control body had opened proceedings against all four clubs due to a potential conflict with the multi-club ownership rule for UEFA club competitions however, they have quietly allowed the clubs to compete after they were able to demonstrate to the governing body that they had enacted changes that would bring them into compliance with the multi-club ownership rule
In Conclusion
Involvement of private capital in football especially prime European leagues is rapidly changing. This will further lead to multiple levels of framework being set by UEFA, the governing body in case of potential clashes like one being seen in this year’s European club competitions. We will try to keep you updated periodically. In our Master in Football Business Management program, we have a module dedicated to the investments and internationalization through club acquisition strategies. You can know more about the program here
