![The Evolution and Impact of Multi-Club Ownership in Soccer](/img/breaking.png)
The Evolution and Impact of Multi-Club Ownership in Soccer
Multi-club ownership (MCO) is swiftly transforming the global sports landscape, particularly within the realm of soccer. This investment strategy, where entities acquire stakes in multiple teams simultaneously, is gaining traction, reshaping everything from financial dynamics to fan engagement and operational strategies.
Private equity groups are at the forefront of this wave, often aiming for a lucrative exit strategy rather than long-term engagement. As one insider adroitly noted, "Most private equity groups buying up the ‘low-hanging fruit’ will have an exit in mind before they buy their stake."
Financial Gains and Technological Advancements
The trend of MCO reveals a spectrum of opportunities and controversies. Clubs within MCO networks frequently experience a significant boost in commercial revenues—typically a 20-30% increase—thanks to shared sponsorship deals and global branding strategies. Moreover, the average market value of MCO-affiliated clubs tends to be 15-25% higher than that of their independently owned counterparts in similar leagues.
Technological advancements are further refining the MCO model. Artificial intelligence and data analytics are now integral tools, optimizing operations and investment strategies. This digital edge ensures that best practices are consistently employed across all clubs within an MCO network. As a RedBird Capital representative remarked, "There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch."
Controversies and Opposition
Despite the financial and technological benefits, MCO faces considerable opposition from traditional sports communities, particularly in European soccer. A significant segment of soccer supporters are vehemently opposed to MCO structures, fearing they undermine the integrity of the sport and erode local club cultures.
However, a large-scale legislative push to reverse the trend appears improbable. One insider noted, "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)."
Impact on Women's Soccer
The ripple effects of MCO extend beyond men's soccer, significantly influencing women's soccer as well. Advocates argue that multi-club ownership is crucial for the continued growth of the women's game. Michele Kang emphasized, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing."
Potential Risks and Market Dynamics
Nonetheless, the financial pressure and profit expectations associated with MCO can lead to adverse outcomes. Financial institutions' reluctance to meet profit targets might result in "fire sales," where players are sold off, and clubs face the risk of relegation.
The number of soccer teams under MCO structures surged remarkably from 117 in 2021 to a projected 336 by 2024, underscoring the rapid adoption and expansion of this model. High-profile examples include Red Bull, which owns multiple clubs worldwide, such as RB Leipzig, NY Red Bulls, Red Bull Brasil, Red Bull Salzburg, and Red Bull Bragantino. The impact is not limited to soccer; Diamond Baseball Holdings (DBH) has established a strong presence in minor league baseball, owning 35 of the 120 affiliated minor league franchises.
Looking Towards the Future
The proliferation of MCOs is a testament to its perceived benefits in terms of synergy, shared resources, and financial growth. As with any transformative trend, continuous adaptation will be key. RedBird Capital predicts, "Permanent capital is an appropriate type of capital for sports — and while the public markets aim to serve that, they’re not ready yet."
Emerging entities like Profluence Capital are seeking to create their own multi-club ownership ecosystems, further diversifying the competitive landscape. While challenges and controversies abound, the MCO model's role in modern sports—particularly soccer—is only poised to grow.
Westchester SC presents a particularly striking example of the momentum behind MCO. The club inked the second-largest jersey sponsorship deal in the USL and signed a former Premier League player for his final career stage. Demonstrating the fast pace at which new clubs can integrate and make a splash, Westchester SC set records as one of the fastest teams to transition from an expansion agreement to public announcement in USL history, accomplishing this milestone in just four months.
In conclusion, multi-club ownership is reshaping the sports world in multifaceted ways, offering both lucrative opportunities and significant challenges. Its trajectory suggests that, barring unforeseeable legislative changes, MCOs will continue to redefine what it means to own and operate sports teams in the 21st century.