Lyon, Bordeaux, Red Star... When French football goes under the American flag

The heavy eyelid, the smile of circumstance, Jean-Michel Aulas does not wear his black tie as he is used to. On the stage, at this time of year, the president of Olympique Lyonnais is usually accompanied by the new coach of his first team or rather supported by a rookie whom he hastens to present to the press, to the dawn of a new season. This Tuesday, June 21, huddled in his white shirt, the American businessman John Textor stands wisely next to him.

It’s no longer a secret for anyone. Aulas, at the head of the club since 1987, is selling the team he has built, which has become this European model of synergy between entertainment and sport that American entrepreneurs love: “We agreed, we typed in the hand in the night”, he eludes in front of the mass of journalists. The company Eagle Football Holdings of John Textor, an entrepreneur who made his fortune by investing massively in sport and technologies, becomes the majority shareholder by buying back a slew of stock market shares. The revelation of the agreement, ratified the day before by the board of directors, is a surprise for many players in French football.

In no hurry to sell his team, Jean-Michel Aulas was invited to sell by his historical partners Seydoux and IDG, who had announced in the spring their desire to withdraw from the capital. The handshake between the old and the new owner in front of the flashes of the photographers seals the odyssey of a local entrepreneur who has raised his club to the rank of juggernaut. Above all, it marks a new episode in the soap opera of the sale of French football to foreign capital.

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breaking wave

A few kilometers away, another summer soap opera mixing local barons and great fortunes animated the town of Saint-Etienne. A historic club of French football, ASSE has had a cataclysmic sporting year which precipitated the decision of the duo at the head of the club, Roland Romeyer and Bernard Caïazzo, to give up their seats. Discussions began in July with David Blitzer, co-owner of an NBA franchise attracted by the popularity of the “Greens”, before the sale collapsed. After Olympique de Marseille owned by The McCourt Company, named after real estate developer Frank McCourt who made his fortune in the American East, two of the most prestigious French heritage clubs were about to land in American hands. Above all, the summer proved it, much less upscale clubs also attract covetousness.

The Red Star, a third division club which is not even professional, was sold to the American investment fund 777 Partners for nearly 19 million euros. AS Cannes, playing at an even lower level, is expected in the clutches of the owner of one of the biggest European clubs, The Friedkin Group, which already owns AS Roma. Angers and Le Havre were also for a time announced close to a sale. “It’s a wave, blows the leader of AS Nancy Lorraine Gauthier Ganaye. They want to catch everything that is left to take. All with a very clear plan.”

“We must not tell stories: if a lot of foreign capital arrives, it is because French football is in danger”, Pierre Ferracci, president of Paris FC

“The idea of investors is to buy clubs that have experienced a sporting failure devaluing their value, notes economist Jérémie Bastien, specialist in football club buyout operations. They hope for a nice capital gain on resale.” A speculative maneuver which the hexagonal governing body is not fooled. Starting with Pierre Ferracci, president of Paris FC, the second club in the capital: “Since the Mediapro crisis which considerably weakened French football, there is a desire on the part of capital, especially Americans, to take advantage of the weakness of French football. .”

If the Professional Football League, led by its president Vincent Labrune, wants to believe in the expression of a renewed attractiveness for a championship emerging from the crisis, several leaders observe above all a form of predation. “We must not tell stories: if a lot of foreign capital arrives, it is because French football is in danger”, continues Pierre Ferracci.

Asset grabbing

Whether they are investment funds, groups specializing in sport or billionaires wishing to diversify their activities, investors are convinced that they can maximize profits by restructuring the debt of clubs, by optimizing costs through the use of companies specializing in athletic performance and monetizing the stadium experience. This acquisition logic has a name:asset grabbing. A perspective: resale within three or four years, for many of them.

A president who worked for several Ligue 1 teams, both for investment funds and foreign capital, agreed to open the account book: “During a sale, the valuation of a club corresponds to the income excluding the sale of players plus the valuation of the workforce minus the debts.The average club hopes to sell 2.5 times the revenue.American sports franchises are valued at 4 to 5 times the revenue. [Les investisseurs] therefore consider French clubs as undervalued assets.”

The strategy most often aims to centralize acquisitions around a holding company so as to constitute a galaxy of clubs across the European continent. This model of superstructure aims to pass players from one club to another as well as technical and medical skills. It also limits operating costs. It is the advent on the scale of football of multinationals, thus taking up the successful model of the City Football Group which owns the Manchester City club in England, that of Troyes in France or Melbourne in Australia. “They want to apply industrial methods to football,” comments Pierre Ferracci, who was contacted by the American group Red Bird Capitals a few years ago. The investment fund finally set its sights on Toulouse Football Club in France, before acquiring, on Wednesday August 31, the Italian club AC Milan for 1.2 billion euros.

Aquitaine as a laboratory

The formation of the pink city serves as a model today. Bought when the club had just dropped to Ligue 2 by Red Bird Capitals, it moved up to Ligue 1 in the second year of its takeover. Its management relies on technological tools to identify players in order to strengthen the sports sector and outsources part of the administrative and operational tasks. He managed to enjoy a strong attendance for his first game of the season at home, at the beginning of August.

But the arrival of American investment funds in French football has not been a success. The summer that is coming to an end is an illustration of this. With Saint-Etienne, Bordeaux is the other historic club adrift. Bought four years ago by the GASP and King Street funds, the former club of Zinédine Zidane was sold to some of its creditors twenty months later, led by the Luxembourger Gérard Lopes.

The perilous financial arrangements and the expenses on the transfer market did not save the club from the announced sporting failure. Worse, in the middle of July, the financial control body of French football, the DNCG, pronounced the demotion of the Gironde team in the third division for lack of sufficient cash. Thanks to the support of the city of Bordeaux, the club was able to obtain a reprieve but the club is undoubtedly facing one of the toughest challenges in its history.

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The management has initiated two difficult social plans and is preparing to further reduce its workforce in the administrative wing of Haillan, its head office. Its best players are about to leave. The club is in the second division. We remember the promises of the press conference presenting the Bordeaux project, four years earlier. Nicolas de Tavernost, director of the M6-RTL group which sold the club, prophesied in front of the imposing amphitheater serving as a press room: “A page turns for M6, a new one opens for the FCGB.” Today, a new chapter is being written for all of French football.