Investing in European soccer clubs has become an attractive option for U.S. investors seeking a piece of the international sports market. Traditionally, the focus has been on marquee-tier clubs with high valuations. However, there is a noticeable shift towards smaller clubs with lower valuations. This multi-club model allows investors to enter the market at smaller deal valuations and tap into the growing popularity of soccer both globally and in the U.S.
Soccer is a global sport with a massive fan base, which presents significant revenue opportunities for investors. The increasing popularity of soccer in the U.S. has opened up new avenues for revenue generation, particularly through broadcast media rights deals and merchandising. As a result, the valuation of European soccer clubs has skyrocketed in recent years, attracting deep-pocketed investors from private equity firms, venture capital firms, and sovereign wealth funds.
U.S. investors have been increasingly backing European soccer clubs, with more than one-third of the clubs in the “Big Five” leagues in Europe having U.S. investment. Notable recent transactions include the acquisition of Chelsea FC for over $5 billion by a consortium led by U.S. investor Todd Boehly and private equity firm Clearlake Capital, as well as the takeover of AC Milan for nearly $1.3 billion by Redbird Capital Partners and Elliott Management.
The COVID-19 pandemic caused significant distress for soccer clubs, leading to decreased revenue and increased costs. This created an opportunity for U.S. investors to inject fresh capital into the sport. Fenway Sports Group, for example, sold a minority stake in Liverpool FC to Dynasty Equity to alleviate debt and finance upgrades for the team. Several English Premier League clubs, including Sheffield United and Manchester United, have also been open to discussions with buyers.
While marquee-tier clubs attract the attention of larger private equity firms, middle-market investors are turning to lower tier leagues such as England’s Championship League and League One. The valuations in these leagues are more affordable, and there is a willingness among teams to engage with buyers and investors. However, investors must consider the risks associated with relegation, as teams can be demoted to lower leagues based on performance.
One emerging trend is the adoption of a “multi-club” model, where U.S. investors own multiple teams across different leagues and continents. This approach allows for synergies between comparable clubs, enabling players to be transferred and developed across the investor’s portfolio. City Football Group, backed by Abu Dhabi United Group, Silver Lake, and Chinese investors, is a notable example of this model. They own Manchester City, New York City Football Club, and Melbourne City.
While larger private equity firms focus on top teams, middle-market firms are raising funds to pursue the multi-club strategy. 777 Partners, a Florida-based company, recently acquired a majority stake in Everton FC for approximately $685 million. They have already invested in several European soccer clubs, including Sevilla FC, Genoa C.F.C., and Red Star FC, among others. This strategy allows middle-market firms to tap into the growth potential of multiple clubs and unlock synergies between them.
The investment landscape in European soccer clubs is evolving, with U.S. investors seeking diverse opportunities beyond marquee-tier clubs. The shift towards the multi-club model and investment in lower tier leagues reflects a growing understanding of the sport’s global appeal and revenue potential. As more U.S. investors enter the market, they bring fresh capital and expertise to support the growth and development of European soccer, ultimately benefiting clubs, players, and fans alike.
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