![The Rise and Intricacies of Multi-Club Ownership in Soccer](/img/breaking.png)
The Rise and Intricacies of Multi-Club Ownership in Soccer
In recent years, multi-club ownership (MCO) has dramatically reshaped the global sports landscape, particularly in soccer. This phenomenon involves investors acquiring stakes in multiple teams, often leveraging shared resources to enhance overall value and operational efficiency. While the concept offers significant opportunities, it has also stirred controversy, especially among traditionalist soccer supporters in Europe.
Private equity groups are driving much of the surge in MCO. According to industry observers, many of these firms view their investments as temporary holds with planned exits, rather than long-term commitments. One industry insider noted, "Most private equity groups buying up the ‘low-hanging fruit’ will have an exit in mind before they buy their stake."
Nonetheless, the potential for financial gain is evident. MCO-affiliated clubs frequently experience a notable 20-30% increase in commercial revenues. This boost is attributed to shared sponsorship deals and global branding efforts. Additionally, the market value of MCO-affiliated clubs is estimated to be 15-25% higher than that of independently owned clubs in similar leagues, showcasing the financial upside of this ownership model.
The rapid adoption of MCO is evident in the numbers. Soccer teams under MCO frameworks surged from 117 in 2021 to a projected 336 by 2024. 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 influence of these multi-club networks extends beyond just male leagues; Michele Kang, a notable figure in women’s soccer, stated, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing."
Technological advancements are also refining the MCO model. The integration of artificial intelligence and data analytics is playing a crucial role, helping clubs to optimize player performance, scouting, and overall management. RedBird Capital, a firm actively involved in sports investments, highlighted the value of operational synergies, stating, "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 rise of MCO is not without its detractors. Traditional sports communities and soccer supporters in Europe have expressed significant opposition to this model. Despite this, large-scale legislative interventions to dismantle MCO structures seem unlikely. "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)," remarked one industry observer.
The financial risks associated with MCO are also a concern. Financial institutions’ reluctance to meet profit targets could lead to "fire sales" of players and even club relegations. This precarious balance underscores the need for careful financial management within MCO structures to avoid destabilizing the clubs involved.
While soccer has been the focal point of MCO, other sports are not immune to its reach. Diamond Baseball Holdings (DBH) owns 35 of the 120 affiliated minor league franchises in baseball and has secured contracts with Major League Baseball (MLB) to negotiate national sponsorships for all 120 minor league teams. Profluence Capital is another entity looking to create a multi-club ownership ecosystem, indicating a potential expansion of MCO principles beyond soccer.
Westchester SC serves as a prime example of a club that has benefited from robust MCO strategies. The club, which signed the second-largest jersey sponsorship deal in the USL and added a former Premier League player for his final career stage, has set records for rapid progression. In just four months, Westchester SC transitioned from an expansion agreement to a public announcement, one of the fastest such timelines in USL history.
Ultimately, as long as investors see profitable returns and strategic advantages in MCO, this model will continue to grow and redefine how clubs operate and succeed. The technological and financial advancements further cement MCOs as pivotal players in the future of global sports. Yet, preserving the cultural and traditional aspects of sports will remain a delicate balancing act, and skepticism from purists will keep the conversation around MCOs dynamic and evolving.