![The Rise of Multi-Club Ownership in Global Sports](/img/breaking.png)
The landscape of global sports, particularly soccer, is undergoing a seismic shift driven by the burgeoning trend of multi-club ownership (MCO). This paradigm involves investors acquiring stakes in multiple teams simultaneously, and it is rapidly redefining the dynamics of ownership and competition in the world's most popular sport.
At the heart of MCO is the profit motive of private equity groups, which frequently seek eventual exit strategies rather than long-term operational involvement. As 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." This approach underscores the speculative nature of MCO investments, which are often geared towards lucrative returns over sustained stewardship.
European Soccer: A Mixed Reception
The rise of MCO is particularly pronounced in European soccer, where it has sparked both opportunities and controversies. Clubs that join MCO networks can experience commercial revenue boosts of 20-30% due to shared sponsorship deals and global branding efforts. Moreover, these clubs tend to see their market values rise by an estimated 15-25% over independently owned counterparts in comparable leagues. This financial uptick can be attributed to enhanced operational synergies and the strategic application of best practices.
However, this trend is not without its detractors. Traditional sports communities and passionate soccer supporters across Europe have expressed considerable opposition to MCOs, fearing that such structures prioritize profit over the essence of sport. Despite this opposition, a large-scale legislative rollback appears unlikely. As one source aptly put it, "Rollback is out of the equation unless governments do it through legislation forcing owners to divest their interests (highly unlikely)."
Technological Integration and Financial Risks
The infusion of technology is further refining the MCO model. Artificial intelligence and data analytics are playing significant roles in optimizing team performance, scouting, and commercial strategy. These advancements enable owners to make data-driven decisions, enhancing the overall efficiency and profitability of their investments.
Nevertheless, the financial viability of MCOs hinges on meeting ambitious profit targets. Should financial institutions grow wary of unmet expectations, there is the looming threat of "fire sales," where players are rapidly sold off, potentially leading to the relegation of clubs. This precarious balance highlights the high stakes of MCO ventures.
Beyond Men's Soccer: The Broader Impact
The influence of MCOs extends beyond men's soccer, reaching into the realm of women's soccer as well. Michele Kang, an advocate for the growth of women's sports, stated, "Multi-club ownership is ‘a necessity’ for women’s soccer to continue growing." This sentiment underscores the critical role of MCOs in fostering the development and visibility of women's soccer on a global stage.
The sheer scale of MCO can be illustrated by the surge in the number of soccer teams under such structures, from 117 in 2021 to a projected 336 by 2024. Prominent examples of MCO 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.
Expanding Beyond Soccer
MCO is not confined to soccer alone. Diamond Baseball Holdings (DBH) exemplifies this trend in baseball, where the organization owns 35 of the 120 affiliated minor league franchises. DBH has also secured contracts with Major League Baseball (MLB) to negotiate national sponsorships for all 120 minor league teams, showcasing the expansive potential of MCO across different sports.
Additionally, entities like Profluence Capital are exploring the creation of multi-club ownership ecosystems, signaling a broader ambition to replicate this model across various sports domains.
Spotlight on Westchester SC
One club that has garnered significant attention within the MCO framework is Westchester SC. The team recently inked the second-largest jersey sponsorship deal in the United Soccer League (USL). Westchester SC also made headlines by signing a former Premier League player for his final career stage, demonstrating the allure of established talent within MCO-affiliated teams. Remarkably, Westchester SC set records for one of the fastest transitions from an expansion agreement to a public announcement in USL history, achieving this in just four months.
In summation, multi-club ownership is reshaping the sports industry, offering both exciting prospects and intricate challenges. As MCO continues to expand, its impact on the commercial strategies, technological integration, and cultural dynamics of sports will be closely scrutinized by stakeholders, supporters, and industry experts worldwide.