Why Multi-Club Ownership Is The Future Of Football! | Explained

over the past few decades football has

been evolving at an ever ferocious pace

not only on the pitch but in how the

clubs are run behind the scenes

the ever-growing commercialization of

the sport has made investing in the

beautiful game not just a lavish

indulgence of the super rich

but a legitimate business venture

malcolm glazer's 780 million

takeover of manchester united in the

early 2000s demonstrated this very shift

using significant loans for the purchase

which immediately settled the club with

debt

a risk no doubt but since 2010 alone the

red devils have generated over 1.3

billion pounds in revenue

and with a current forbes market

valuation of 4.2 billion dollars

it looks like a gamble that has rightly

or wrongly paid off billionaires are

continuing to invest in the game

but now a new trend has emerged behind

the scenes which is looking to take the

business side of football to a whole new

level

multi-club ownership as of 2017 uefa

calculated that at least 26 top division

sides

were involved in cross-ownership models

with a controlling party holding

decisive influence over more than one

side

and that figure is expected to be higher

with many hidden arrangements and power

structures unaccounted for

at the highest level investing in

football makes sense in 2019

77 out of the 98 sides in europe's top

five leagues turned a profit

but further down the pyramid and most

clubs exist in a precarious state

still in 2019 45 of sides in france's

league

recorded a net loss while that figure

almost doubled to 85 percent of sides in

england's championship yet despite the

risks it's these lower leagues in europe

and beyond that are being targeted for

investment

so why are bigger teams buying out

smaller sides and what are the main

benefits of multi-club ownership

let's find out as the recent european

super league debacle laid out in

flagrant detail

football is big business between 2018

and 2020 the collective value of the big

six sides in the premier league grew by

1.5 percent

to 14.7 billion pounds even

wolverhampton wanderers are worth at

least 10 times what their chinese

investors fosun paid for them in 2016.

it's a similar story at watford who were

bought by italian businessman gino pozzo

in 2012 for just half a million pounds

though he had to pump in over 10 million

just to clear the hornet's debt

in 2018 he rejected a three-figure offer

from an american consortium

that valued the cover 350 million pounds

two years earlier pozzo had already

turned a substantial profit

when he sold his majority share in

spanish side granada for 37 million

euros

that growth isn't just limited to

europe's top five leagues

a perfect example of that is new york

red bulls a franchise which cost their

austrian owners 25 million dollars in

2006.

forbes estimates that the mls side is

worth 290 million in the current markets

but the red bull gmbh football empire is

a unique case when it comes to analyzing

why exactly multi-club ownership is on

the rise

along with new york the energy drinks

giant principally owned three other

professional clubs in rb leipzig red

bull salzburg and rebel bragatino in

brazil

in addition there are three further

teams sheltered under the red bull

umbrella across brazil austria and usa

all their associated clubs carried the

drinks iconic logo on their shirts along

with their signature red and white strip

a red bull team is instantly

recognizable but not just in what they

wear but also in how they play

red bull sides tend to deploy an

aggressive brand of attractive football

at a high intensity

in addition they all champion youth and

athletic ability

as of october 2020 the average age of

their four main teams was just over 24

years and 10 months

all lower than the mean age of every

side in their respective divisions

even their managers fit this criteria

with the youngest in their roster jesse

marsh at 47.

this is all a deliberate ploy designed

to work around the energy drink's motto

of it gives you wings

for years red bull has been targeting

younger audiences by associating

themselves with formula one and other

extreme sports that push this image

therefore investing in football on a

multi-club level is a grand example of

marketing through branded entertainment

and it's working in 2019 red bull sold

7.5

billion individual cans of energy drink

generating

6 billion dollars in revenue a year

earlier red bull was ranked

as the most recognized energy drink in

brazil while according to forbes their

market share rose 22

in the south american nation in north

america 2 red bull remains the market

leader

in short the company has used football

as a way to access key locations across

the world

marrying success on the pitch with

exponential growth of the red bull brand

the city football group is also

exploiting their worldwide presence for

commercial gain

since 2013 cfg has invested in nine

separate clubs away from manchester

including yokohama f marinos in japan

mumbai fc in india

and new york city fc over in north

america along with additional clubs in

europe and south america

cfg are close to achieving their goal of

owning a side in every continent

according to fedor and soriano

manchester city ceo and driving force

behind the cfg

their initial expansion was all about

growing the city's franchise abroad

by creating a global network of sites

all modelled on manchester city

the premier league outfit would gain

loyalty and affiliation

from non-uk fans connected to the

franchise sure enough melbourne heart

and club atletico torque in uruguay both

rebranded to feature city in their name

along with the newly created nyc fc and

mumbai

all five sides play a sky blue strip

with four featuring circular logos of

similar design

this global reach has presented some

huge financial incentives in 2019 puma

announced a 10-year kit deal with cfg

worth reported 860 million dollars

though principally aimed at the

manchester men's and women's sides it

covered four additional cfg teams

puma therefore gained access to markets

on four continents

while the smaller teams benefit

proportionately by being part of the cfg

umbrella

but an even bigger statement was made

when private equity firm silver lake

agreed to invest

500 million dollars in city football

group in november 2019.

the deal valued cfg at a staggering 4.8

billion dollars

all but confirming their status as the

leading private owner of clubs in the

game

smaller teams are often targeted by

multi-club investors when under

financial difficulties

pacific media group the majority

shareholders of barnsley

fc ton in switzerland and kv ustende in

belgium

rescued the latter of the pro-league

side facing a running deficit of almost

10 million euros in 2019

barnsley 2 recorded a 3.4 million pound

loss for the same year

for this network streamlining operations

and sharing running costs for things

like hr or marketing

can be a step towards returning to

profitability however for most

owners looking to expand their portfolio

helping smaller teams become sustainable

is a secondary concern behind the

development of their own youth players

there are endless examples of multi-club

ownership where a satellite team serves

as a training ground of their parent

club's young talent

belgium in particular has become a

target for such investment

in 2017 league inside a.s monaco

purchased a controlling stake in cersei

bruges

meanwhile lille's former owner gerard

lopez bought royal excellent muskrat

in 2020 having failed in approaches for

portuguese sides vittoria angela vicente

in the years before following lopez's

arrival 12 players have joined the

belgian outfit

either on loan or permanently from lille

the recent conduct of city football

group shows they're beginning to follow

a similar model as they begin to

prioritize their academy

la liga dos outfit girona joined the cfg

stable in 2017

while league decide trois cost sheik

mensah just 10 million euros in 2020

though neva have had to change their

identity to match the city style

girona in particular has become an

incubator for city's best young products

this season alone four members of their

squad have been borrowed from manchester

city

including the hugely talented 18 year

old defender jan kutto

signed from brazilian side corotiba last

year amid heavy competition

barcelona the right-back has been an

integral member for the catalonian side

and potential first-team star back at

the yeti had in the future the red bull

portfolio presents even more of a

pyramid when it comes to players moving

through their chain of development

rb leipzig have regularly acquired the

pick of the bunch of red bull salzburg

stars in the past few years

including juan hee-chan dominic

sabotsalai and navi keita

in fact you have to go back to 2012 to

find a year where a player didn't move

between the two

while jesse march is the latest to make

the pilgrimage salzburg in turn nurture

talent from austrian second division

side fc leiferin

and are often a first port of call for

young talents coming over from the new

york red bulls

not all multi-club ownership models

operate in this way

the potso family regularly bounced

players between uttanasi and watford to

optimize their squad performance

irrelevant of age

in the last decade over 50 transfers

have been completed between the two

most notably seeing gerard delafoe and

roberto pereira

swap hartfordshire from northeast italy

and francisco cieralta come the other

way

watford and new denasi are more equal in

their standing but for both cfg and red

bull

their hierarchical ownership platform

has given them a competitive edge in the

transfer market money aside by mapping

out a clear path to high-level

first-team football

many of the game's brightest young

talents are choosing them as they start

their professional journey

multi-club ownership is not for everyone

and it still deserves some scrutiny

particularly when clashing interests

between clubs under the same control are

concerned

but with so many potential economic and

competitive benefits on offer if done

correctly

it's no surprise to see the trend

growing faster than ever

multi-club ownership looks like it's

here to stay so that was our take on why

multi-club ownership could be the future

of football what do you think of cfg and

the red bull

empire is it right for the game and

would you want to see your side involved

let us know down in the comments below

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