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The growth of the multi-club ownership model in football

In recent years, a new phenomenon has developed in the football business with the growth of the multi-club ownership model.

A controversial method

“The lesson to be learned from all of this is that it is difficult to be at two clubs”, said Nancy president Gauthier Ganaye after the club’s relegation to the French third division last month. Considered the youngest managing director in English football after joining Barnsley in 2018 aged 30, Gauthier Ganaye spent last season juggling his role at Nancy with that of executive chairman of Belgian club KV Oostende.

Barnsley, which was relegated from the Championship in April despite making the playoffs last year, is, like Nancy and Ostend, partly owned by New City Capital – an investment group which also includes US investors Pacific Media Group. “The starting brief was never that I was there 100%”, Ganaye said of her dual role. “Discussions are underway to define a structure that can allow all the clubs in the group to operate.”

Things haven’t looked up on the pitch for the rest of New City Capital’s growing club portfolio. Thun – who won the domestic title in 2010 – struggled to finish mid-table in the Swiss second tier, Esbjerg fans endured another season of frustration in the Danish second tier and Den Bosch remains stuck in the Dutch second tier.

At least investors had something to celebrate at the end of May when Kaiserslautern – Germany’s four-time champion who sold a 10% stake to a US consortium made up of New City Capital’s Chien Lee and Pacific Media Group’s Paul Conway in March – beat Dynamo Dresden in the promotion play-off to return to Germany’s second tier for the first time since 2018.

From New City Capital and 777 Partners LLC to City Football Group (CFG), Bolt Football Holdings, Redbird Capital and Red Bull, owning one club doesn’t seem like enough these days. Even Saudi Arabia’s Public Investment Fund, fresh out of its controversial takeover of Newcastle, is getting in on it with speculation it is in the running to buy Polish club Slask Wroclaw, despite strong local opposition.

“Silesia is an ancestral silver”, Wroclaw local government spokesman Wojciech Koerber said last week. “The history of this city is not something that can be sold for a few zlotys. It is not only a commercial project, but also a social project.”

There are strong rumors that Qatar Sports Investments – which has transformed Paris Saint-Germain into a European superpower thanks to its inexhaustible financial reserves – is trying to build a portfolio of clubs after watching majority Abu Dhabi-owned CFG push its empire expanding by double digits with the acquisition of French club Troyes in 2020. CFG failed in an attempt to buy Breda in April after a furious backlash from fans of the Dutch club.

“I will not be surprised if QSI buys a club in Portugal soon”, says a source for The Guardian. “They have seen the success of CFG in managing so many different clubs around the world that they all want to do the same thing. The system was perfected by CFG but the idea came from the Pozzos.”

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Flexible legislation in this area

Les Pozzos – the Italian owners of Udinese and Watford – relinquished control of their stake in Granada in 2016 after seven years in charge of the Spanish club. The multiple club phenomenon dates back much further, to a landmark case at the Court of Arbitration for Sport in 2000 concerning two stakes held by Enic, the company through which English businessman Joe Lewis later bought Tottenham. The court’s decision regarding Enic’s minority stake in AEK Athens and majority stake in Slavia Prague led to the introduction of regulations prohibiting two clubs in which a person or company exercises “decisive influence ” to be admitted to the same Uefa club competition.

However, as the rules differ from one national championship to another, a big loophole remains open. While the Premier League has limited a 10% stake in a second division club, Uefa’s integrity rules allow a person to hold a 100% stake in a club and a stake “of non-decisive influence” in another club participating in the same competition.

Questions were raised in Germany when US investor David Blitzer – who owns 40% of Crystal Palace through his company Bolt Football Holdings – bought 45% of the company that owns the majority of Augsburg shares at the start of 2021. But as club members retain 50+1 of the voting shares, they stayed on the right side of regulations and finished the season well away from relegation issues after signing in January of American striker Ricardo Pepi, a record for the club, for an amount of 18 million dollars.

It’s not the only triumph for Blitzer, who was also behind Martin Broughton’s failed bid for Chelsea last month, an offer which, if successful, would have meant giving up his shares in Palace. His Dutch club, Den Haag, missed out on promotion to the Eredivisie in the qualifiers and his Belgian side, Waasland-Beveren, came close to returning to the top flight, six years after relegation.

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A growing phenomenon

Bolt Football Holdings has also emerged as the likely new owner of ten-time French champions Saint-Étienne after they were relegated to Ligue 2 following dramatic scenes in the play-off against Auxerre.

RedBird – another American investment vehicle, which counts Liverpool owners John Henry and Tom Werner, the NFL and LeBron James among its partners – continued its success by bringing Toulouse back to Ligue 1 by buying champions Milan. Italy, for 1.3 billion dollars.

The Miami-based 777s are hoping for similar returns after their 100% takeover of Standard Liege in March, after reaching a $175.8 million deal to buy Genoa in September. The sale made Standard – which have not won a domestic title since 2009 – the 10th Belgian top division club to have attracted foreign investment, and almost half of Serie A clubs have been sold to investors or North American consortia since 2018.

In February, 777 spent $137 million for a 70% stake in Vasco da Gama after legislation last year that allowed Brazilian clubs to operate as public companies opened the door to foreign investment. A month earlier, John Textor – the American who splashed a reported £87.5m to join Blitzer as a minority Palace shareholder in August after showing interest in Newcastle – had taken a 90% stake in Botafogo and he says he intends to restore the club’s glory years when Jairzinho and Garrincha rose to prominence. “I want it to be clear within three to five years that there is a Botafogo way”did he declare. “Failure is the best teacher”.

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