Although the age-old trope of Americans not understanding European football still persists to this day, it would be churlish to deny their expertise in monetising their native sports. The National Football League, National Basketball Association and Major League Baseball take first, second and third positions in the table of sports leagues around the world with the highest revenue streams. Although football—or perhaps soccer would be more appropriate on this rare occasion—is viewed by many as the global sport, no one could argue for it being the most advanced, or indeed the most lucrative, when it comes to finances and infrastructure. It may pain many in Europe to admit it, but American sport stands alone as an economic behemoth that dwarfs leagues in other parts of the world. In part, this is due to a shamelessness in the American psyche when it comes to feeding the corporate machine and making everything so advertently about wealth production; there is also an astuteness, perhaps the by-product of such a psyche, when it comes to operating sporting commodities for the purpose of making money. It should not come as a surprise, therefore, that American business models have begun penetrating the European football market in search of greater riches. It should also not be surprising that football, whether fans like it or not, could do with a little extra cash and some North American inspiration.
Every event, good or bad, presents opportunity and the potential for new ideas and ways of doing things to spawn. Covid-19, for all the damage it caused to society and people’s livelihoods, fashioned interesting investment opportunities for private equity and venture capital firms looking to expand into the European sporting market: football clubs, having taken a substantial financial hit while fans were unable to watch their teams in stadiums, were in desperate need of balancing the books and ensuring they could continue to run as normal. The first major European club to really feel the heat was FC Barcelona, which had suffered a heavy stint of fiscal mismanagement under the tenure of former Club President Josep Bartomeu. Once the unpopular and, frankly, reckless Bartomeu was replaced by Joan Laporta for his second spell, the need for radical change was apparent. Laporta, gifted with the responsibility of restoring one of Spain’s largest and most significant institutions, chose to make a deal with the devil; the devil, in this instance, happened to be Sixth Street Partners, headquartered in San Francisco. The global investment firm were to purchase 10% of the club’s TV rights for the next 25 years, a watershed moment in the financial and sporting landscape. As if that wasn’t big enough, a further 15% was sold to Sixth Street less than a month later, taking the total value up to more than 300 million euros.
Several other significant deals between US firms and European clubs were concluded around this time: Sixth Street was involved in another deal, this time with Real Madrid, for new business developments around their stadium; Redbird Capital Partners, a firm whose investment portfolio includes F1 team Alpine, acquired Italian giants AC Milan for 1.2 billion euros in August last year. Fenway Sports Group, Liverpool’s owners, also recently sold a minority stake in the club to US firm Dynasty Equity. No club purchase has been more high profile, however, than that of Todd Boelhy and Clearlake Capital’s USD 4.25 billion investment in Chelsea.
This opportunity, of course, was born out of a different event to the pandemic: following the start of the ongoing war between Russia and Ukraine, the iconic and somewhat infamous Roman Abramavic had his assets frozen, forcing the Russian to sell. Given the circumstance, few could have imagined the club being sold at such an astronomical price. This buy, more than any other to date, is emblematic of American investors’ commitment to breaking European football and their belief that there is substantial money to be made—that is, provided US sporting models are copied and implemented. Boehly’s journey in England thus far is easy to ridicule, particularly given his seeming disdain towards heeding the advice of those who know the game far better than he does, but his willingness to throw the kitchen sink at the club’s recruitment strategy demonstrates his belief that his sporting vision—one which saw the LA Dodgers, Boehly’s baseball team, win the world series for the first time in 32 years—will be vindicated with time.