![Transforming the Global Soccer Landscape](/img/breaking.png)
Transforming the Global Soccer Landscape
Multi-club ownership (MCO) is rapidly transforming the landscape of global sports, particularly in soccer. Under this model, investors acquire stakes in multiple teams simultaneously, reshaping both the competitive and commercial aspects of the sport.
Although primarily driven by private equity groups with a clear exit strategy in mind, MCO is not without its drawbacks. These investment conglomerates often aim to maximize profitability before moving on, which raises concerns about the long-term sustainability and emotional investment in the clubs involved. "Most private equity groups buying up the 'low-hanging fruit' will have an exit in mind before they buy their stake," an unnamed source highlighted.
The phenomenon has seen a significant surge in European soccer, revealing a landscape brimming with both opportunities and controversies. While clubs within MCO networks benefit from shared sponsorship deals and global branding efforts, leading to a 20-30% increase in commercial revenues, this growth is met with resistance. Traditional soccer supporters across Europe remain staunchly opposed to the MCO model, fearing it prioritizes profit over the sport's rich heritage and community roots.
Nonetheless, the operational and financial synergies are hard to ignore. "There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch," stated RedBird Capital, underscoring the efficiencies and potential profitability of the model. These synergies contribute to the higher market value of MCO-affiliated clubs, estimated to be 15-25% greater than independently owned teams in comparable leagues.
A key contributor to this success is the integration of technological advancements. Innovations in artificial intelligence and data analytics refine the MCO model, helping organizations make better-informed decisions, from player acquisitions to marketing strategies. Despite these advancements, the traditional sports community continues to view MCO with skepticism and opposition.
Yet the winds of legislative change are calm. A rollback of MCO structures through large-scale legislation appears improbable. "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests, which is highly unlikely," an unnamed source commented. Consequently, the model seems poised to maintain its grip on the soccer world for the foreseeable future.
However, the road ahead isn't entirely smooth. Financial institutions' tight profit expectations could trigger "fire sales," where players are sold off to meet financial targets, potentially leading to club relegation and disgruntled fan bases.
The influence of MCO extends beyond men's soccer, reaching into women's leagues as well. Michele Kang noted, "Multi-club ownership is 'a necessity' for women’s soccer to continue growing," highlighting the potential for similar boosts in revenue and visibility. The number of soccer teams under MCO structures surged from 117 in 2021 to a projected 336 by 2024, emphasizing the rapid expansion and adoption of this ownership model.
Prominent examples of successful MCOs include Red Bull and Diamond Baseball Holdings (DBH). Red Bull owns a portfolio of clubs across the globe, such as RB Leipzig, NY Red Bulls, Red Bull Brasil, Red Bull Salzburg, and Red Bull Bragantino, showing how interconnected teams can leverage shared resources for mutual benefit. In baseball, DBH owns 35 of the 120 affiliated minor league franchises and holds contracts with Major League Baseball (MLB) to negotiate national sponsorships for all 120 minor league teams, demonstrating its influence and strategic reach.
Profluence Capital also seeks to establish its own MCO ecosystem, looking to harness the financial and operational efficiencies that come with multi-club networks.
Locally, Westchester SC has made headlines by securing the second-largest jersey sponsorship deal in the United Soccer League (USL) and signing a former Premier League player for his final career stage. The club's rapid transition from an expansion agreement to a public announcement in just four months set a record in USL history, further illustrating the dynamic nature of MCO-driven initiatives.
As multi-club ownership continues to evolve, its impact on the global landscape of sports, especially soccer, remains profound. While it brings financial growth and operational efficiencies, the debate on its long-term implications for the sport and its communities is far from settled.