The Political Economy of Football V2

The row between Ares Management and John Textor has escalated to the next level. The private capital group filed an application in London’s High Court to appoint administrators to Eagle Football Holdings Bidco Limited, which holds a majority stake in Eagle Football Group, the owner of Lyon, as well as clubs in Belgium and Brazil. Eagle is more than a test case for multi-club ownership in football. It is a coming together of sport and institutional capital. The outcome will be closely watched. Private capital firm Ares has appointed administrators to the owner of Olympique Lyonnais after it defaulted on its debts, in a move that puts the future of one of France’s leading football clubs in doubt. Eagle Football Holdings Bidco Limited holds a majority stake in Eagle Football Group, the owner of Lyon. Eagle Bidco, which also holds controlling stakes in Brazilian football club Botafago and Belgian team RWDM Brussels, is owned by US businessman and prolific football investor John T...

The Swiss Ramble was invited to give a presentation at the FT Football Business Summit on the increasingly popular model of multi-club ownership.   For some reason this contribution was not publicised by the Pink 'Un. It is the most thorough data-based treatment I have seen of the motivations for multi-club ownership and the advantages and drawbacks of the model.   Of itself it is a reason for subscribing to the Zurich-based football finance guru's Substack page. My only additional comment would be don't forget the wood for the trees.  I would argue that globalisation is alive and well in football and one thing that a globalisation model encourages is holding assets in different countries, albeit that the junior subsidiaries lose out. The Swiss Ramble states: ' One of the best known examples 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 ...

In August 2018, having been co-owners since 2007, Stan Kroenke bought Russian billionaire Alisher Usmanov’s 30 per cent shareholding for over £600m, ending a long power struggle for ultimate control of the club and taking his total stake to 97 per cent.  The American billionaire also bought out the remaining independent shareholders, taking the total cost of the transaction north of £600m, of which more than £550m was borrowed from Deutsche Bank. The Kroenkes have just authorised another summer of significant spending.   Almost £250million was spent, including the marquee signings of striker Viktor Gyokeres from Sporting CP for £54.8m and midfielder Martin Zubimendi from Real Sociedad for £55.8m. There was also a deal worth up to £67.5m for Eberechi Eze from Crystal Palace, with Josh in London playing a key role in the transfer. Since KSE’s 2018 buyout there has been an evident shift in Arsenal’s approach to transfers. Between 2018-19 and 2023-24, Arsenal had a gross spend...

Bournemouth owner Black Knight Football Club is in advanced talks to buy a 25 per cent stake in last year’s Croatian double-winners HNK Rijeka. Founded by American insurance billionaire Bill Foley, Black Knight bought Bournemouth in 2022 before adding a minority stake in French side Lorient and winning the bid to become the majority owner of A-League expansion side Auckland FC in 2023. The following year, Foley’s group bought a minority stake in Scotland’s Hibernian and a controlling stake of Portuguese side Moreirense. Earlier this year, Black Knight entered into a “strategic affiliation” with Major League Soccer’s Orlando City and is now on the verge of adding a sixth and, most likely, final piece to its multi-club group. The investment in Rijeka, which was first reported by Croatian outlet Nepresusan, would give Black Knight a foothold in Eastern Europe, as well as a relationship with a club that has enjoyed considerable success in rece...

Liverpool owner Fenway Sports Group (FSG) is in talks with Getafe president Angel Torres about a staged takeover that would add the La Liga club to its portfolio of sports teams. FSG’s interest in Getafe was first reported in Spain last month but Torres downplayed the status of the talks earlier this month in an interview with Spanish radio station COPE, saying there have been rumours about a takeover since he bought the club in 2002 “and now it’s Liverpool but we’re not for sale”. Despite this denial, it is widely known in the industry that Getafe have been for sale for years and FSG is just the latest to take an interest in the club, who are about to start their 21st season out of the last 22 in Spain’s top flight. Over that period they have built a reputation for being well-run and for developing young talent, such as current Aston Villa midfielder Emi Buendia, Galatasaray’s on-loan striker Alvaro Morata and their in-demand Nigerian star Christantus Uche. Torres has previous...

Crystal Palace being denied entry to this coming season’s Europa League is a “terrible injustice” and a “bad day for football”, the club’s chairman Steve Parish has said. A UEFA panel has recommended that Palace are denied entry to the competition after it found that the club breached the governing body’s rules on multi-club ownership. The south London club are now set to compete in the third-tier Conference League but intend to lodge an appeal with the Court of Arbitration for Sport (CAS). Nottingham Forest, who finished seventh in the Premier League and originally qualified for the Conference League, could now replace them in the Europa League. UEFA’s rules state that no individual or legal entity can have “control or influence” over more than one club participating in a UEFA club competition, and European football’s governing body must be satisfied that the respective clubs are separate entities to maintain their tournaments’ integrity. Palace’s issue stems from Eagle Footba...

Crystal Palace have been asked by Uefa for more information about their ownership structure in a move that leaves the Premier League club more confident they will play in Europe next season. The decision over whether Palace can remain in the Europa League is likely to come down to whether UEFA believe that Textor has the capacity to exercise a decisive influence in the club’s decision-making. Palace would argue that they don’t really operate as part of a multi-club ownership model, but simply have a significant shareholder, who happens to have stakes in other clubs. Given the lack of genuine “decisive influence” that John Textor is able to apply at Crystal Palace, any punishment that banned them from the Europa League would seem to be wildly disproportionate. There are very good reasons why UEFA have implemented regulations to curb the excesses of multi-club ownership, but they surely weren’t designed to tarnish a fabulous story like Palace’s FA Cup win. If the issue is simpl...

City Football Group (CFG), the holding company that oversees the multi-club ownership group spearheaded by Manchester City, recorded a £122.2million pre-tax loss in the 2023-24 season, taking CFG’s combined losses since its 2013 founding to £972.8m. By contrast, across the same period, Manchester City recorded a pre-tax profit of £103.4m. CFG’s losses have now cleared £100m in each of the last three seasons, though a £30.3m income tax credit reduced last season’s net loss to below that marker. John MacBeath, a board member at CFG, stated at the end of 2013-14 season that the board “expect the group to be profitable within the next three years.” CFG has yet to make an annual profit or come anywhere close to doing so. Last season’s result did at least represent a stabilisation of sorts, with the pre-tax loss reducing by £4.7m (four per cent). CFG’s pre-tax loss for 2023-24 came despite new record income for the group of £933.1m. CFG’s revenue, unsurprisingly, is principally attribu...

Bournemouth have the smallest stadium and the smallest revenues of all the clubs in the Premier League and although they are already punching well above their weight, their American owner, Bill Foley, says their status as minnows is about to change. A new training ground is close to being finished, plans are advanced for a new stadium on the site of the present one that will close to double its capacity, with Bournemouth at the “pinnacle” of a multi-club ownership model. Foley’s investment group, Black Knight Football Club, is close to completing a deal to buy Moreirense, a mid-table club in Portugal’s top league, having already taken over Lorient in France and New Zealand side Auckland, who are top of the mainly Australian A-League, and taken a 25 per cent stake in Hibernian. All the clubs will emulate Bournemouth’s high-energy, high-pressing style that has brought unprecedented success under their Spanish head coach, Andoni Iraola. In an interview with the US-based Men in...