Although the age-old trope of Americans not understanding European football still persists to this day, it would be churlish to deny their expertise in monetising their native sports. The National Football League, National Basketball Association and Major League Baseball take first, second and third positions in the table of sports leagues around the world with the highest revenue streams. Although football—or perhaps soccer would be more appropriate on this rare occasion—is viewed by many as the global sport, no one could argue for it being the most advanced, or indeed the most lucrative, when it comes to finances and infrastructure. It may pain many in Europe to admit it, but American sport stands alone as an economic behemoth that dwarfs leagues in other parts of the world. In part, this is due to a shamelessness in the American psyche when it comes to feeding the corporate machine and making everything so advertently about wealth production; there is also an astuteness, perhaps the by-product of such a psyche, when it comes to operating sporting commodities for the purpose of making money. It should not come as a surprise, therefore, that American business models have begun penetrating the European football market in search of greater riches. It should also not be surprising that football, whether fans like it or not, could do with a little extra cash and some North American inspiration.
Every event, good or bad, presents opportunity and the potential for new ideas and ways of doing things to spawn. Covid-19, for all the damage it caused to society and people’s livelihoods, fashioned interesting investment opportunities for private equity and venture capital firms looking to expand into the European sporting market: football clubs, having taken a substantial financial hit while fans were unable to watch their teams in stadiums, were in desperate need of balancing the books and ensuring they could continue to run as normal. The first major European club to really feel the heat was FC Barcelona, which had suffered a heavy stint of fiscal mismanagement under the tenure of former Club President Josep Bartomeu. Once the unpopular and, frankly, reckless Bartomeu was replaced by Joan Laporta for his second spell, the need for radical change was apparent. Laporta, gifted with the responsibility of restoring one of Spain’s largest and most significant institutions, chose to make a deal with the devil; the devil, in this instance, happened to be Sixth Street Partners, headquartered in San Francisco. The global investment firm were to purchase 10% of the club’s TV rights for the next 25 years, a watershed moment in the financial and sporting landscape. As if that wasn’t big enough, a further 15% was sold to Sixth Street less than a month later, taking the total value up to more than 300 million euros.
Several other significant deals between US firms and European clubs were concluded around this time: Sixth Street was involved in another deal, this time with Real Madrid, for new business developments around their stadium; Redbird Capital Partners, a firm whose investment portfolio includes F1 team Alpine, acquired Italian giants AC Milan for 1.2 billion euros in August last year. Fenway Sports Group, Liverpool’s owners, also recently sold a minority stake in the club to US firm Dynasty Equity. No club purchase has been more high profile, however, than that of Todd Boelhy and Clearlake Capital’s USD 4.25 billion investment in Chelsea.
This opportunity, of course, was born out of a different event to the pandemic: following the start of the ongoing war between Russia and Ukraine, the iconic and somewhat infamous Roman Abramavic had his assets frozen, forcing the Russian to sell. Given the circumstance, few could have imagined the club being sold at such an astronomical price. This buy, more than any other to date, is emblematic of American investors’ commitment to breaking European football and their belief that there is substantial money to be made—that is, provided US sporting models are copied and implemented. Boehly’s journey in England thus far is easy to ridicule, particularly given his seeming disdain towards heeding the advice of those who know the game far better than he does, but his willingness to throw the kitchen sink at the club’s recruitment strategy demonstrates his belief that his sporting vision—one which saw the LA Dodgers, Boehly’s baseball team, win the world series for the first time in 32 years—will be vindicated with time.
American investement has also recently sought other strategies for delving into the enormously lucrative football market and claiming a piece of the pie for themselves. Several private equity firms, the majority of which are headquartered in the US, have been shown promise by German football clubs’ recent vote to allow such firms to invest in an entity which would control the broadcasting and commercial rights of Germany’s top two football leagues. Broadcast deals are no small matter for European leagues, who are struggling to attract the same kind of interest that the English Premier League enjoys year upon year. In fact, the French Football Association recently had to end its broadcast auction as no bids matched the minimum offer the association would allow; Italy’s Seria A accepted broadcast offers from Sky and DAZN in October which were lower than the current agreement in place, painting a bleak picture of the financial struggles both these Top 5 leagues face.
The message from US finance to the rarified bubble of European football is clear: Please, step aside. We can take care of things from here. And, as many of these case studies highlight, it’s hardly as if European football is reluctant to support this notion. In need of modernising their revenue streams at the earliest opportunity, clubs and associations are left with little choice but to hand their poisoned chalices over to the ambitious, shrewd claws of American finance. There is no guarantee that these investments will pay off, and private equity is not without its own problems amidst a backlog of unsold businesses and uncertainty around interest rates for 2024, but the patience and acumen many of these firms operate under indicate these iconic footballing brands will be better run than the outdated structures of governance which preceded them. The Americans, after all, know how to squeeze every last dime out of a sporting asset, which is why evidence of Europe’s look to America for help in diversifying and reimagining its financial outlook does not end here.
Tottenham Hotspur are perhaps the gold standard when it comes to implementing this very American concept in football. Real Madrid, Barcelona, Manchester City and several Italian clubs have since chosen to embrace this concept in different ways, with many of these projects underway as this piece is being written. The concept in discussion is that of the modern stadium complex, offering clubs the opportunity to make use of their land 24/7, 365 days of the year. Real Madrid’s new Bernabeu development will boast gadgets including a retractable roof and a pitch which can be moved underground to make way for a concert stage. Manchester City and Barcelona’s stadium developments will include the building of smaller stadiums around the footballing ones, which will similarly allow concerts and various performances to take place. All of these projects, including those in Italy for the likes of Inter Milan, AC Milan and Roma, will utilise the construction of restaurants and hotels in order to attract visitors on days when matches are not taking place.
Although Tottenham’s stadium, which includes several restaurants and the world’s longest bar, has now been around for four and a half years, the idea of a multi-purpose stadium complex in Europe still feels foreign to many fans of the game. In America, however, this is an idea that has been around for some time. The Los Angeles Rams stadium in Inglewood, owned by the notorious Kroenke family who have a majority stake in Arsenal, is the best example of how the US has been able to profit from such a complex: although it cost USD 5 billion to build, the stadium site is home to an abundance of apartments, hotels and offices, making it worth every penny of the investment Kroenke and others put in. There are many other examples of similar developments across the US, causing many perceptions of what a stadium is to be revised in the hope of producing better financial outcomes and growing sporting brands. With many clubs flailing in the mire of poor financial returns and antiquated infrastructure failing to attract the masses, this is also proving to be the future of European football: if money can’t be obtained through TV rights and sponsorship deals, creating longterm sources of revenue through physical centres for retail and leisure provides a suitable solution to a sizeable problem. Nostalgia, largely responsible for the stark resistance to projects involving Barcelona’s Camp Nou and the Milan clubs’ San Siro in their early conceptions, must fall by the wayside if the future viability of these historic clubs is to be ensured.
It’s natural for fans of football to resist America’s perceived meddling in the beautiful game. Afterall, there is something authentically old-school about how much of football is run which can be viewed romantically and as something which need not be tarnished. It may be different to American sports in its feel and approach, but the natural trajectory of sport in recent years and decades has made the implementation of American models practically inevitable. As Billy Beane aptly puts it in the film Moneyball, clubs and franchises must “adapt or die”: ultimately, football has been forced to adapt to the econcomic environment the world finds itself in, and American firms and ideals were best placed to take advantage of this. Football will always be distinct from other sports in its raw passion and global reach, but certain compromises on attitudes and outlooks will have to be made to ensure its stock remains high.
