![Multi-Club Ownership Transforming Soccer and Beyond](/img/breaking.png)
Multi-Club Ownership Transforming Soccer and Beyond
The landscape of global sports is undergoing a transformative shift driven by multi-club ownership (MCO), particularly within the realm of soccer. This burgeoning trend involves investors acquiring stakes in numerous teams concurrently, a strategy that's rapidly redefining traditional sports ownership models and raising both opportunities and controversies.
MCO is not confined to local or regional boundaries; it is a global phenomenon that is most visible in European soccer. Investors, ranging from private equity groups to corporate giants, are leveraging this model to create expansive sports networks. A notable example of this is Red Bull's ownership of multiple soccer clubs worldwide, including RB Leipzig, NY Red Bulls, Red Bull Brasil, Red Bull Salzburg, and Red Bull Bragantino. Similarly, Diamond Baseball Holdings (DBH) has made significant inroads in baseball, owning 35 of the 120 affiliated minor league franchises and holding contracts with Major League Baseball (MLB) to negotiate national sponsorships for all minor league teams.
For the investors, the allure of MCO is clear. Shared sponsorship deals and global branding efforts have led to substantial financial gains. Clubs within MCO networks frequently experience a 20-30% increase in commercial revenues. Furthermore, these clubs often enjoy an average market value that is 15-25% higher than their independently owned counterparts in comparable leagues. This financial uptick is propelled in part by the operational synergies and best practices shared across all the intellectual properties (IPs) they control.
"There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch," noted RedBird Capital, highlighting the efficiency and profitability inherent in the MCO model.
However, the rise of MCOs has not been without its detractors. Soccer supporters in Europe have been vocal in their opposition, fearing that the traditional values and local ties of their beloved clubs might be eroded by these expansive ownership models. Multi-club ownership is perceived by many as a threat to the authenticity and community-centric ethos that have long been the bedrock of European soccer. The opposition is so significant that any large-scale legislative intervention to roll back MCOs appears highly improbable. "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)," an industry insider observed.
Despite the controversies, technological advancements are refining the MCO model. Artificial intelligence and data analytics are becoming crucial tools for these multi-team networks, enabling more effective management and operational efficiency. The application of these technologies is expected to further enhance the success and attractiveness of MCO structures.
Interestingly, the influence of MCO is extending into women's soccer as well. Michele Kang, a noted figure in the sector, remarked, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing." This underscores a broader trend where the benefits of MCO, including increased resources and improved competitiveness, are being recognized beyond men's soccer.
In addition to technological and financial advantages, the dynamics of player and staff movement within these networks add another layer of strategic depth. Clubs can optimize talent distribution, scout for emerging talents more efficiently, and leverage collective bargaining in player transfers. However, this integration also comes with challenges. There is a risk of "fire sales" where financial institutions' unwillingness to meet profit targets could lead to mass player sales and potential relegation of clubs.
The number of soccer teams operating under MCO structures has seen a significant surge, from 117 in 2021 to a projected 336 by 2024. This trend reflects the growing acceptance and strategic importance of MCO across the sports industry. Even new clubs are quickly adapting to this model. For example, Westchester SC made waves by inking the second-largest jersey sponsorship deal in the USL and signing a former Premier League player for his final career stage. The team also set a record by transitioning from an expansion agreement to public announcement in just four months.
The growth of MCO in soccer and beyond underscores a profound shift in how sports businesses operate and compete in a global market. While the model offers substantial economic and operational benefits, it is also reshaping the traditional values and structures that have long defined sports communities. The future of multi-club ownership will likely be as complex and multifaceted as the web of teams and investors it entangles, balancing innovation with tradition and community with commercial imperatives.