Multi-club ownership (MCO) is a growing trend that seems to be here to stay. According to UEFA research, 26 top-flight clubs across Europe are involved in some sort of cross-ownership. Just recently, UEFA identified more than 100 European clubs as being involved in MCO structures, while other research identified over 180 clubs in 2022 with the owner or significant shareholders also holding shares in other clubs (including minority stakes). The most prominent MCO structures are certainly the City Group and Red Bull. The City Group directly controls ten clubs across the globe — ranging from Manchester City in England to Mumbai City in India. With Manchester City, Girona FC, Lommel SK, and ES Troyes AC, the City Group’s network consists of four clubs from Europe. Red Bull controls five clubs, with RB Leipzig being their flagship side. Recently, Middle Eastern groups from Qatar, Bahrain and Saudi Arabia, as well as US private equity investors, dominated the acquisition scene.
Overall, there are about 21 MCO groups with stakes in three or more clubs, but the majority of group structures (approximately two-thirds) consist of just two clubs. While a growing number of club owners see MCO as the most sustainable way of investing in football, first and foremost financially, doubts exist over whether or not a portfolio with just two clubs can really capture the advantages. In general, MCO groups are often seen as constructs that are only working with big money and on the largest scale. Undeniably, MCO is a growing trend that is very likely to stay; the question is: is it anything more than just elite clubs buying a network of satellite clubs or a pastime of a few super-rich individuals?
The often critical perception of MCO groups is driven by negative examples that were not able to properly manage the endeavour. Of course, like any other M&A in the business world, it’s not a cakewalk but with the right — and tailored — approach, there is a big opportunity to leverage the full potential for each club of the group.
After all, it’s crucial that the reality of the MCO does not turn out to be just managing two clubs with completely separate DNAs and without leveraging any synergy effects. The biggest hazard in building up an MCO group is that the owners fail to create a common culture and a mutual understanding of the group’s strategy and goals, which often leads to clubs just rivalling each other for attention, funds and other resources. In the end, there will only be one club that benefits from the structure, while all the others run the risk of being ruined. In the worst case, the end result may even be worse for all involved than before joining the MCO group.
To avoid these traps, there are a few valid management approaches to consider.
The Drastically Neutral Entity
One way to tackle the aforementioned challenges is to go into multi-club ownership with a central holding entity that rigorously takes over as much operational work from the clubs as possible while installing professional departments for all operations that can be centrally managed. Of course, this does not work with minority stakes, so majority ownership of all involved clubs is a precondition. This starts with back-office activities and goes from financial planning and budgeting to HR, scouting and marketing — the list goes on. This way, economies of scale can really unfold their leverage and the rivalry for internal resources is mitigated. The communication channels are extremely short, the clubs gain a maximum of idea exchange and resources can be invested much more effectively. In today’s connected world, the geographical location of the particular clubs becomes less important for such models as well. Organisations can work well remotely and the pool of talent is just huge if you can source from all over the world. However, it must be clear for every employee that they are working for the central entity, and not for a particular club. At its highest maturation level, this MCO model only allows for players and the narrowest coaching staff to belong to a particular club. The rest of the staff works for the headquarters, not excluding some ground forces on-site who remain rather some kind of service providers.
While the advantages are obvious, the model requires all people on the clubs’ side to be extremely committed to this construct. Hence, employer branding might be more important for such MCO groups than for other single clubs. It works best if the staff feels more related to the central entity rather than the actual club but at the same time this may undermine the club’s own identities and cut off strengths like the emotional relatedness of the people working on the ground; not every employee is a fan anyway, so good leadership should mitigate this.
Another risk might be to lose the fans with this approach, as they might feel detached from the club. This is a consideration that should not be overlooked. However, it could be mitigated by outstanding PR and marketing teams at the central entity. It’s proven in the business world that a single team can manage multiple distinct brands well and fans hardly care if the content is produced locally or if merchandise is managed from some office next to the stands as that’s all happening behind the scenes anyway. The particular clubs can be seen as units like in other enterprises. There is a unit for the English “market” (read league), one for the French, and so on, and the central organisation makes sure each unit can perform best. It is clear that HR departments are doomed to hire only top talent for the business side, extremely professional people that believe in the project and cherish the opportunities. Potentially more than a single club’s HR team, as they might be able to attract professionals with a more emotional offering. Again, not every employee of an ordinary club is a fan anyway, so this aspect may seem more critical as it finally is.
In theory, this model places little requirement on the characteristics of the individual clubs. It might seem to be just a very rigorous thought experiment. However, half-baked approaches have proven faulty often enough. Rigour and discipline — in culture, strategy, people, and day-to-day operations — are fundamental success criteria for expanding organisations, not only in football.
Another possible approach to MCO is a specialisation model. In contrast to the above-mentioned model, it does not start from a central third-party entity but can be originated from a single club. The focus here is clearly on cooperation in partnership and exploitation of locational advantages. The fundamental prerequisite for this is that the clubs do not compete directly with each other at any time on a sporting level, either domestically or internationally, and that the role of each club is clearly defined. An obvious example would be a European club partnering with an African one. While the European club is certainly interested in sourcing undiscovered talent and streamlining the transfer flow, the African counterpart may benefit from thought exchange and improved professionalism.
It’s obviously very important to ensure that the group is not raiding one of its clubs for talent at the expense of another. However, if executed properly, players can move in all directions and talent is constantly replenished as it moves along to another club. To ensure this, the long-term goals for each club must be crystal clear from the beginning and mutual responsibilities should be defined early on and detached from sporting performance. Once there is a working setup with two clubs, another one might be added to the network. In the European-African group example, a sensible complement might be a South American club. Surely, in this example, the European club is benefitting the most on a sporting level, since the other group members specialise in talent development.
While this seems like a more traditional rollout, other scenarios are easily conceivable. Imagine a group of a Norwegian Eliteserien club, a German 2. Bundesliga club, and an EFL Championship representative, where one club is focusing on innovative data scouting and match analysis methods, another one specialising in fan engagement and relationship building, and the third aiming to foster best practices for running an academy. If all these specialised competencies and expert knowledge are accessible to the whole group, this can be a significant competitive advantage for every single club.
You could even add non-sports organisations to the network. The club owners might acquire a tech company (and maybe even resell it later on) to develop their own analytics tools or exclusively partner with academic institutions to get the latest insights for athletic training first-hand. The absence of a real central steering entity requires even more commitment from the individual club’s executive teams to the partnership but at the same time, it preserves more autonomy and is less prone to risks like emotional detachment of staff or the loss of individual club identities. To double down on the natural advantages of a club, being due to locational traits (e.g. think about labour permits), historical circumstances or past achievement can be a viable way to structure an MCO, provided clubs are operating on eye-level, advantages are mutual, and KPIs are more oriented to measure the success of the partnership instead of each club’s sporting performance. If played well, such an MCO should result in long-term sporting success in any case.
Whether or not MCO is really a measure to increase the sustainability of financial investments into football clubs remains unclear. Compared to other asset classes, football clubs have a very special risk-return profile. The impact of sheer luck, emotion and politics in football is just too immense to find blueprints for financial investments. Nevertheless, an MCO structure can definitely reduce the influence of luck and misrouted emotion on sporting performance and, if approached properly, it should also eliminate the impact of political distractions within the participating clubs.
In the end, MCO is probably even more fruitful for the sporting performance as for the financial return. Fostering collaboration and synergies, joining forces to leverage economies of scale has proven to be fertile for various types of organisations, so it can be a viable model for football clubs and their owners too. While there are different models to approach an MCO, the most important consideration is that every party needs to enter the group with a maximum commitment.
Within the group, extreme clarity must prevail with respect to the goals, responsibilities, obligations, and mutual benefits for each individual party. Even the slightest spark of politics and infighting between participants can contaminate the whole group and undermine the common goal and vision. Hence, if there was just one golden piece of advice for MCO groups, it has to be: start with top-notch professionals who are highly committed to a common vision and ubiquitous group KPIs that matter for every party, acting as guiding policies for each and every action the individual clubs are taking.