![The Rise of Multi-Club Ownership in Global Sports](/img/breaking.png)
Multi-club ownership (MCO) is rapidly transforming the landscape of global sports, particularly soccer. This innovative approach involves investors acquiring stakes in multiple teams simultaneously, leading to a wave of changes in how clubs operate and compete.
The trend is especially pronounced in European soccer, where a surge in multi-club ownership has revealed both opportunities and controversies. For instance, clubs within MCO networks have frequently experienced a 20-30% increase in commercial revenues. This growth is fueled by shared sponsorship deals and global branding efforts, showcasing the lucrative potential of such arrangements. Moreover, the average market value of MCO-affiliated clubs is estimated to be 15-25% higher than independently owned clubs in comparable leagues.
However, this trend is not without its critics. Soccer supporters in Europe are predominantly opposed to MCOs, fearing it could dilute the essence of their beloved teams. Traditional sports communities express considerable opposition, suggesting that MCOs could erode the unique identities and traditions that have been the foundation of these clubs for generations. Despite this resistance, a large-scale legislative intervention to roll back MCOs seems improbable. As one industry insider noted, "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)."
Economic Dynamics of Multi-Club Ownership
One driving force behind the rise of MCOs is the involvement of private equity groups. These entities 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," noted a source. This short-term focus contrasts with traditional club ownership models, which often emphasize long-term success and stability.
Underpinning the MCO model are technological advancements, with artificial intelligence and data analytics playing significant roles in refining and optimizing operations. These tools help in scouting talent, gauging player performance, and enhancing overall team strategies. The idea is to create synergies operationally and investment-wise across all the IPs that are touched, as RedBird Capital elaborated, "There is a synergy operationally and investment-wise with best practices that you can do across all of the IPs that you touch."
Diversification and Expansion
The influence of MCOs is not confined to men's soccer. The model extends to women's soccer as well, where it is viewed as a crucial element for continued growth. Michele Kang summed this up by stating, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing." This perspective underscores the belief that shared resources and collective investments can foster development and elevate the profile of women's soccer globally.
Beyond soccer, multi-club ownership structures are making their mark in other sports. For example, Diamond Baseball Holdings (DBH) owns 35 of the 120 affiliated minor league franchises in baseball. DBH has also secured contracts with MLB to negotiate national sponsorships for all 120 minor league teams, effectively leveraging collective bargaining power to secure more lucrative deals.
Profluence Capital's aspirations to create a multi-club ownership ecosystem further exemplify the growing interest and potential in this model across various sports disciplines.
Case Studies and Notable Developments
A noteworthy example of MCO success can be seen in the Red Bull portfolio. Red Bull owns multiple clubs worldwide, including RB Leipzig, NY Red Bulls, Red Bull Brasil, Red Bull Salzburg, and Red Bull Bragantino. This expansive network not only strengthens the brand but also allows for resource sharing and strategic coordination across continents.
Closer to home, Westchester SC has been making headlines with its rapid rise in the USL. The club set records as one of the fastest teams to go from an expansion agreement to public announcement in USL history, achieving this feat in just four months. Moreover, Westchester inked the second-largest jersey sponsorship deal in the USL and signed a former Premier League player for his final career stage, highlighting the club's ambition and strategic planning.
While the benefits of MCOs are clear, potential downsides cannot be ignored. Financial instability within the network could result in what are termed "fire sales," where players are sold off and clubs potentially face relegation. The unwillingness of financial institutions to meet profit targets might precipitate such outcomes, casting a shadow over the sustainability of the MCO model.
As the number of soccer teams under MCO structures escalates—from 117 in 2021 to a projected 336 by 2024—the impact of this trend will continue to unfold, shaping the future of sports in ways previously unimagined. The ongoing debate over multi-club ownership underscores a broader conversation about the intersection of commerce, community, and competition in modern sports.