The Political Economy of Football V2

Florentino Pérez’s re-election on Sunday as president of football club Real Madrid revives what sounds like one of the world’s least enticing investment opportunities. Pérez aims to sell 5 per cent of the world’s richest club, through a new subsidiary, subject to a referendum of its 100,000 or so owner-members, or socios. His defeated challenger Enrique Riquelme had attacked that plan as a “privatisation”, as though Real Madrid is a public good as vital as, say, fresh water. But Pérez explained to the FT last week that the investment would be more like a sponsorship: “In other words, there are people who associate themselves with Real Madrid without expecting anything.” The 79-year-old, who first took the presidency in 2000 when the club was under financial strain, is a shrewd interpreter of what supporters want. Steven Mandis, an adviser to football governing body Fifa and author of two books on Real Madrid, told the Financial Times he has “never seen a management team so relentle...

Nearly seven years ago, Silver Lake, a technology-focused investor, committed primary equity amounting to an approximate 10 per cent interest in City Football Group, the owner of Manchester City and other clubs worldwide. This involved partnering as a minority investor with Sheikh Mansour bin Zayed al-Nahyan of Abu Dhabi as the majority owner, investing in growth and backing a world-class manager and executive team. Over time, Silver Lake increased its stake to approximately 18 per cent. Substantial investment in top players has been central to the strategy. But cash alone is not sufficient to win prestigious trophies every year, let alone build an enduring culture or clear team identity. Manager Pep Guardiola, who left City in May after 10 successful years at the helm, repeatedly praised the stability, expertise and trust of the ownership as vital elements of the magic formula. A Financial Times contributor argues that we should consider the private equity investment in Chelsea in...

Over the past decade American financing has reshaped global football in its image, with billions of dollars of investment, a fast-growing domestic audience and a generation of new players. While US owners of European football teams have faced protests from fans for years, friction is rising. Some fear the sport is losing its way in pursuit of profit and that outside money is distorting the game’s balance of power. And yet the arrival of professional investors has so far done little to fix the game’s parlous finances. Americans now own 117 European clubs, according to data from CIES Sports Intelligence, including more than half the teams in the English Premier League, more than a third of Italy’s Serie A and over a quarter of Ligue 1 in France.  The effects are being felt both on and off the pitch. Clubs are increasingly run with commercial success front of mind, aping the US sports model, where team ownership has proved lucrative. This has led to a push to tighten football’s fi...

Florentino Perez has been re-elected Real Madrid president, winning 65 per cent of the votes in an electoral victory over challenger Enrique Riquelme. It was the first time Madrid’s members had voted for the club president in 20 years, with the incumbent Perez elected unopposed in each of Madrid’s previous five electoral cycles, held in 2009, 2013, 2017, 2021 and 2025. Perez did not need to call this election. He had an active mandate until 2029, but announced the vote in a remarkable press conference on May 12, calling on his rivals to “come out of the shadows” and face him.   This snap decision was aimed at strengthening his power at the Bernabeu, after a second successive season without a trophy, and a string of difficult off-pitch setbacks. Although the 79-year-old has now won a new four-year mandate, it is arguable that his standing inside and outside the club has not improved. Few Madrid members even knew who Riquelme was before Perez’s rambling media event last month...

The authoritative Swiss Ramble applies his forensic financial skills to the case of Blackburn Rovers.  Few football fans have suffered as much as those in Blackburn from owners who have no clear strategy.   Coventry City suffered in the same way until a local businessman took control, but Blackburn have a huge debt pile. Venky's are the largest poultry integrator in Asia.   T hey handle everything from breeding, hatcheries, and feed to processed chicken and animal health products.    This is a smart market to be in as chicken is often the first meat consumed in middle income countries as they become more prosperous. Presumably when they bought Blackburn they saw it as adding to their profile and prestige, hope for a return to the Premier League.  However, this would require much more investment than they have been willing to provide. It will take a lot for the bad vibes around the club to go away, given the many issues faced by Rovers. Indeed, l...

Freshly relegated from the Premier League, West Ham United are entering the most crucial summer in their recent history. They will do so with a potentially damaging power vacuum at the top of the club: they have no permanent chief executive, no director of football; in April, Baroness Brady departed as vice-chairwoman; and on Saturday David Sullivan, the co-chairman, resigned too. Sullivan, 77 — who jointly bought a 50 per cent share in West Ham with the late David Gold in 2010 for £50million — is still the biggest shareholder at the club, with 38.8 per cent. He resigned claiming that “serious historic allegations” about him, allegations he “categorically denies”, were about to be made public.    He has said that he may sue the BBC, who propose to broadcast the allegations, for defamation. The Czech billionaire Daniel Kretinsky has a 27 per cent stake in the club and could increase his influence and shareholding in the coming months, but for more than 15 years, Sulliv...