Multi-ownership of football clubs: “What primarily motivates these owners is profits”

2023-10-18 12:03:12

Research director at the CNRS, Luc Arrondel notably co-wrote “L’Argent du football” with Richard Duhautois in 2022. While MP Éric Coquerel (LFI) is working on a bill aimed at limiting or prohibiting multi-ownership of clubs, the The economist analyzes the phenomenon, tending to become the norm in professional football.

What is the interest sought by these investment funds?

LUC ARRONDEL. Football, which experienced its Trente Glorieuses between 1990 and 2020, has entered a new era. Today, nearly a third of timeshares are run by American funds who are not there to provide sponsorship, unlike traditional owners who were often satisfied with the club’s lack of profitability. With multi-ownership, we are in a very common logic in a market economy: it corresponds to the merger and acquisition of companies with horizontal and vertical logics.

How does this translate into football?

In one case, these funds buy clubs of a similar level to diversify investments. This makes it possible to optimize costs and reduce the risks which are very great if a club goes down a division. In the other, more common, they invest in a flagship club then other less upscale ones. This is what Udinese (Italy) did at the end of the 2000s: its strategy consisted of recruiting a large number of players from emerging countries then buying clubs to allow them to become more experienced. It is undoubtedly the same logic with Chelsea (England) which has just bought Strasbourg. Finally, you have the City model (England), whose strategy aims to conquer markets, Indian, American, etc.

Luc Arrondel is an economist, research director at the CNRS and football specialist. DR

What are the potential deviations from the model?

At the competition level, there is a clear risk of conflict of interest. Most European countries, including France, prohibit timeshares in the same division. But in the European Cup, the UEFA regulations only provide for a “decisive influence” clause for managers to prohibit the participation of a second club from the same group. It’s a bit light, because this year Toulouse, whose group also owns AC Milan, was enough to change its organization chart to get around the rule. At club level, there is a risk of a split between those who will be considered “major” and their satellites. And what primarily motivates these owners is profits. If they realize that they cannot earn money, it could end up like in Bordeaux where they end up leaving. But sometimes, like in Toulouse – which won the Coupe de France in 2023 – it can be a winner. Whether we like it or not, the Red Bird group (the investment fund that owns the Pink City club) has brought know-how, the use of data and perhaps a rationalization of costs.