Multi-cub ownership on the rise

One of the most important trends in the world of football is multi-club ownership. According to UEFA’s latest benchmarking report, at the end of 2022 there were more than 180 clubs worldwide that were part of a multi-club investment structure, involving 6,500 players. This is nearly twice as many as four years before, while the number has increased fivefold since 2012.

Even that rapid growth is almost certainly understating the reality, as CIES Sports Intelligence identified more than 250 teams involved in multi-club ownership in March 2023.

The growth has been driven by a combination of macroeconomic factors and global investment trends. Financial weaknesses and inequalities in the game, exacerbated by the impact of the COVID pandemic, have resulted in buying opportunities.

The perceived under-valuation of the assets, i.e. football clubs, has attracted the attention of US-based investors, with 27 multi-club investment groups (a third of UEFA’s total number) originating in America.

Probably the best known example of multi-club ownership is City Football Group, largely owned by Abu Dhabi United Group (ADUG). They first acquired Manchester City in 2008, but have significantly expanded their empire since then with investments in another 12 clubs all around the world.

As a result, CFG is the oldest and by far the largest multi-club project, including clubs in Europe (Manchester City, Girona, Lommel SK, ES Troyes AC and Palermo), North America (New York City), South America (Montevideo City Torque, Club Bolivar and EC Bahia), Asia (Yokohama F. Marinos, Sichuan Jiuniu and Mumbai City) and Australia (Melbourne City).

CFG’s revenue nearly tripled from £271m in 2013 to £705m in 2022, and this will have grown to at least £805m in 2023, based on the increase in Manchester City’s turnover last season. All that being said, the reality is that CFG continues to lose money. The group’s losses in the last decade add up to nearly £800m, including £138m in the last season alone.

Although a recent arrival, American fund 777 Partners already has stakes in seven clubs, while their offer for 94% of Everton is still awaiting approval from the Premier League. Its portfolio currently includes five European clubs (Sevilla, Genoa, Standard Liège, Red Star and Hertha BSC), one Brazilian (Vasco da Gama) and one Australian (Melbourne Victory).

Some clubs are clearly part of boosting the brand, while others are focused on developing talent. It’s also not necessarily a one-sided relationship, as clubs can benefit from belonging to a multi-club network, especially those that have fallen on hard times or are in a start-up phase.

Manchester City chief executive Ferran Soriano explained the attraction of football clubs as an investment, “The business of entertainment will grow and sport is a fundamental part of entertainment and football is the number one sport, no question. So the investment will work.”

A broader scouting network in different countries across the world helps clubs to identify local prospects early. They can sign emerging talent inexpensively in the early part of their career, rather than being subject to the vagaries of the transfer market at a later stage. The acquisition process is facilitated by being able to offer the chance of playing for a bigger club in the group.

The direction of travel seems fairly clear, as multi-club ownership is likely to continue to grow, even though there are now fewer opportunities available.

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The Political Economy of Football V2

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