Who owns football teams?
When I was a teenager and let’s be honest a young adult, I used to spend countless sleepless nights playing Football Manager - the famous management game in which you are in charge of a football club.
Throughout my long career as a virtual coach, I had to deal with many club owners, all with different objectives. I noticed that football club owners could be categorised into different groups depending on why they invested in football. I wondered whether their real-life counterparts were the same. The world of football is dominated by finance — even more than you might think. Here’s a tour of who owns clubs, and why.
The diplomats
Football as a diplomatic weapon? This is the path that several countries from the Gulf have decided to take. Paris Saint-Germain for Qatar, Manchester City for Abu Dhabi, Newcastle for Saudi Arabia - all these clubs have been bought by Gulf States over the last fifteen years. Their aim: to use the media strength of football to serve their reputation, increase their visibility, and establish their legitimacy, while nestling them within the international community.
For those countries, taking on an internationally popular sport is also part of a longer-term strategy to diversify their economies and prepare for the post-oil era, while enhancing their image abroad.
Qatar, owner of PSG, has gone even further by securing the organisation of the next World Cup, which will take place next autumn in the desert state.
The investors
Buying a football club is expensive. For example, the English club Chelsea, owned by Russian oligarch Roman Abramovich, is about to be sold to a group of investors for around 5 billion euros.
To finance the purchase of these clubs, buyers often use a method that is well known in the financial world: the leveraged buy-out (LBO). This is a financial arrangement that allows an investor to buy a company using a lot of debt.
Basically, the buyer uses a significant amount of borrowed money to finance the acquisition. There's nothing particularly unusual about this - it's how most of us buy our houses - but the controversial aspect of an LBO is that the loan is usually secured against the assets of the company being bought (again, a bit like your house) and the company being bought pays the interest on the repayment (not like your house).
This model is increasingly used in the football world today. In France, the investor Gérard Lopez has become a specialist, having used an LBO to buy the clubs Lille - which he has since sold - and Bordeaux - which he bought from an American investment fund. However, this investment model is not well appreciated by the fans. In fact, many of these investors come to football because they are attracted by the possibility of making a profit through the transfer market, which can provide very high returns in a short time.
If we look at France, some clubs have started to benefit from this model, while other clubs such as Bordeaux under the former owner King Capital, have found themselves in significant financial and sporting difficulty. It’s important to understand that venture capital funds are the ones that often invest in football, and that football is only a marginal asset in their portfolio. Something like an additional bet to seek diversified returns. A non-specialist fund might have difficulties in structuring a club from A to Z (as it happened in Bordeaux), and when the sums invested are small, the asset managers prefer to cut their losses by leaving the club.
The collectors
Some people collect Pokemon cards, others collect records and some, a little wealthier, collect football clubs. Today, more and more clubs are in the hands of the same owner, holding or individuals related by blood or business.
One of the pioneers among football club collectors is the Pozzo family, which for a time owned three clubs in Europe: Watford in England, Udinese in Italy and Granada in Spain (which the family sold in 2016). Another one is the Red Bull Group, which owns clubs in Austria, Germany, the United States, but also in Brazil, or the holding company City Football Group, which owns a dozen clubs around the world, including... Manchester City.
So what is the advantage of being a football club collector, and why are we seeing the emergence of what you might call multinational sports companies?
In fact, there is always a hierarchy between clubs with the same owner. In the main team, the interest is to reduce its sometimes overcrowded squad by loaning out youngsters with great potential who can gain experience in other leagues. They also have priority over the best elements of the other clubs. For the latter, it is an opportunity to reinforce its ranks at a lower cost.
The philanthropists
When someone invests in a football club and becomes an owner, it is assumed that they are a die-hard fan of the club who has fulfilled a childhood fantasy. However, such owners are becoming increasingly rare in the world of professional football, especially when considering the biggest European clubs. Today, they can even be counted on one hand. The best known of these sports philanthropists is probably François Pinault. The founder of the Kering group (Gucci, Yves Saint-Laurent, Alexander McQueen...), is not only one of the richest men in the world and one of the most important collectors of contemporary art; he is also a historical supporter of the Stade Rennais, of which he became the owner and benefactor in 1998.
Many Italian club owners have assumed the status of benefactor during the times of the splendour of Italian football. We could mention the romantic Massimo Moratti at Inter Milan, the former-and-maybe-future politician Silvio Berlusconi at AC Milan, or the Agnelli family, who, in addition to once employing a good chunk of the population of Turin at their Fiat factory, also own the other great symbol of the city: Juventus Turin.
Overall, because of the increasing amount of money involved in sport, football is looking more and more like any other business. But if the show is more and more spectacular, hasn't football lost its soul?
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