![Multi-Club Ownership: Reshaping the Global Soccer Landscape](/img/breaking.png)
Multi-Club Ownership: Reshaping the Global Soccer Landscape
Multi-club ownership (MCO) is rapidly transforming the global sports landscape, particularly in the world of soccer. This dynamic concept involves investors acquiring stakes in multiple soccer teams simultaneously, creating intricate networks that span continents. While it offers numerous opportunities for increased commercial revenue and shared branding efforts, MCO also faces significant opposition, particularly from ardent soccer supporters in Europe.
One of the driving forces behind the rise in multi-club ownership is the involvement of private equity groups. These investors often aim for an eventual exit strategy, rather than long-term operational involvement. "Most private equity groups buying up the ‘low-hanging fruit’ will have an exit in mind before they buy their stake,” reveals an insider source. This strategic approach allows investors to capitalize on the financial potential of multiple club networks without being tied down to the day-to-day operations.
The surge in multi-club ownership, especially in European soccer, has brought both opportunities and controversies to the forefront. Soccer supporters in Europe are predominantly opposed to MCOs, citing concerns about the dilution of club identity and local community connection. Despite the backlash, the financial benefits for clubs within MCO networks are hard to ignore. These clubs frequently experience a 20-30% increase in commercial revenues due to shared sponsorship deals and global branding efforts. Moreover, the average market value of MCO-affiliated clubs is estimated to be 15-25% higher than independently owned clubs in comparable leagues.
Technological advancements are playing a pivotal role in refining the MCO model. Artificial intelligence and data analytics are now integral components of modern multi-club ownership strategies, streamlining operations and optimizing performance across the board. As RedBird Capital aptly puts it, "There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch."
However, the integration of MCO into traditional sports structures has been met with considerable resistance. Many in the traditional sports community view multi-club ownership as a threat to the core values and essence of the sport. Despite this opposition, a large-scale legislative intervention to roll back MCOs remains improbable. As noted by one analyst, "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)."
Another area where MCOs are making an impact is women's soccer. The influence of multi-club ownership extends beyond the men's game, providing critical support and investment needed for the growth of women's soccer. Michele Kang, a prominent figure in the industry, states, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing."
The scale of MCOs has seen staggering growth in recent years. The number of soccer teams under MCO structures surged from 117 in 2021 to a projected 336 by 2024. Companies like Red Bull exemplify this trend, owning multiple clubs worldwide, including RB Leipzig, NY Red Bulls, Red Bull Brasil, Red Bull Salzburg, and Red Bull Bragantino.
Beyond soccer, MCO concepts are also gaining momentum in other sports. Diamond Baseball Holdings (DBH) owns 35 of the 120 affiliated minor league franchises in baseball, and has contracts with MLB to negotiate national sponsorships for all 120 minor league teams. This consolidation aims to enhance commercial opportunities and operational synergies across the network.
New entrants like Profluence Capital are looking to create extensive multi-club ownership ecosystems. In the USL, Westchester SC has quickly risen to prominence, inking the second-largest jersey sponsorship deal in the league. The team also achieved a remarkable milestone by setting records as one of the fastest teams to go from an expansion agreement to public announcement in USL history, accomplishing this feat in just four months. Additionally, Westchester SC secured the signing of a former Premier League player for his final career stage, further underscoring the club’s growing influence.
As the landscape of global sports continues to evolve, the role of multi-club ownership will undoubtedly remain a topic of rigorous debate. While the financial advantages and potential for technological enhancement are clear, balancing these benefits with the preservation of traditional sporting values and community ties will be a challenge for stakeholders navigating this transformative era.