The Rise of Multi-Club Ownership in Global Sports
The landscape of global sports is undergoing a seismic shift, driven by the rapid rise of multi-club ownership (MCO). This transformative concept, particularly notable in soccer, involves investors acquiring stakes in multiple teams simultaneously. The trend is revolutionizing the sport with its blend of opportunities, controversies, and technological advancements.
The early 2020s have seen a surge in MCO, especially within European soccer. As a method of amplifying commercial revenues and leveraging global branding, ownership networks enable clubs to share sponsorship deals, leading to a 20-30% increase in commercial revenue. Furthermore, the market value of MCO-affiliated clubs typically stands 15-25% higher than their independently owned counterparts in comparable leagues. The model's operational and investment synergies present alluring benefits, exemplified by RedBird Capital's assertion: "There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch."
Despite the financial perks, the rise of multi-club ownership is not without its detractors. Soccer supporters across Europe largely oppose this model, viewing it as a threat to the traditional fabric of the sport. The concerns extend to the broader sports community, where resistance is equally fervent. The notion of rolling back MCO through legislative means seems improbable, as pointed out by an unnamed source: "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)."
Private Equity and Exit Strategies
Private equity groups often spearhead this multi-club phenomenon, typically eyeing an eventual exit strategy rather than long-term engagement. This approach is succinctly encapsulated by an unnamed insider: "Most private equity groups buying up the ‘low-hanging fruit’ will have an exit in mind before they buy their stake." Such investment may result in dramatic "fire sales," where financial pressures could force clubs to sell players and potentially face relegation.
Red Bull stands as one of the most prolific examples of an MCO entity, boasting ownership of multiple clubs worldwide, including RB Leipzig, NY Red Bulls, Red Bull Brasil, and others. This vast network underscores the strategic value of multi-club ownership in amplifying global reach and brand consistency.
Technological Integration
Technological advancements are significantly refining the MCO model. The integration of artificial intelligence and data analytics plays a pivotal role in enhancing operational efficiency and strategic decision-making processes. These tools not only optimize player performance and scouting efforts but also streamline marketing and commercial operations across the network.
Impact on Women's Soccer
Interestingly, the influence of MCO extends beyond men's soccer, permeating into the women's game as well. The necessity of this model for the growth of women's soccer is endorsed by Michele Kang, who believes that "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing." This paradigm offers enhanced resources and visibility to women's teams, fostering development and competitive stability.
Expansion and Future Trajectories
In terms of sheer numbers, the multi-club ownership landscape is expanding rapidly. The number of soccer teams under MCO structures surged from 117 in 2021 to a projected 336 by 2024. This trend aligns with the broader adoption of the model across various sports. For instance, Diamond Baseball Holdings (DBH) controls 35 of the 120 affiliated minor league franchises in baseball and holds contracts with MLB to negotiate national sponsorships, encompassing all 120 minor league teams.
The ambitions of entities like Profluence Capital to create multi-club ownership ecosystems further highlight the burgeoning interest in this ownership model. New market entrants such as Westchester SC are making waves too, securing the second-largest jersey sponsorship deal in the USL and signing a former Premier League player for the twilight of his career.
With swift developments and high-stakes investments, the multi-club ownership model is redefining the essence of modern sports. From commercial gains to technological advancements, and from financial strategies to broadening the horizon of women's soccer, the shift is profound and irreversible. The journey of navigating these waters continues, as clubs, investors, and fans alike adapt to the evolving dynamics of global sports.