With a new wave of businessmen looking to exploit football and the monetary benefit within it, we are witness to rising multi-club ownerships. Stuart Reid throws light in this comprehensive article on what he believes is the future of football.
A multi-club ownership (or MCO for short) is when an individual, or a group of individuals working as a collaboration, own more than one club. The reasons behind owning more than one club vary chairman to chairman, but it ultimately all boils down to one thing – money.
An article on Outside of the Boot, recently touched on MCOs, specifically some of the partnerships that will be analysed further on in this article. However, the article also spoke about feeder clubs, which is not the same as an MCO as they do not have the same owners – think of Tottenham’s link with Swindon as an example.
The first record that I can find of an MCO was during the mid-nineties, however this was a very basic example. A company called ENIC purchased large amounts of shares of various football clubs (including Tottenham, Basel, Rangers, AEK Athens and more). They weren’t particularly interested in the football side and were in it purely for profits, investing in the shares hoping for a rise, rather than controlling the day-to-day side of things. They still control 85% of Tottenham to this day. However, the oldest start to an MCO actually began all the way back in 1986.
The Pozzo Family
In 1986, Giampaolo Pozzo purchased his lifelong team, Udinese Calcio. Things had a rocky start as the club were embroiled in a series of match-fixing scandals, for which they had points deduction and were relegated. The next few years were spent jumping between Serie A and B with little direction, however that soon changed in 1993 when Giampaolo’s son, Gino, joined the club. It was his son’s idea that would really take the club forward. As the Pozzos weren’t particularly wealthy, and could in no way compete with the cash-rich clubs at the top of Serie A, they had to do things a bit differently. His idea was to set up a huge worldwide scouting network, the likes of which had never been done before, to find talented footballers before others beat them to it, with the view that these talented footballers would then help stabilise Udinese in Serie A. As well as being Udinese fans, they were ultimately businessmen and wanted Udinese to be profitable; they had the idea to then sell these players, and then invest the money into more unknowns, which would form a revolving door of players. The list of players that they have “discovered” is extraordinary, and includes:
|Name||Season Joined||Fee In||Season Left||Fee Out|
|Benatia||10/11||£0||13/14||£12m (part exchange)|
(fees from Transfermarkt)
These are a mix of the most well-known of the Udinese players that the Pozzos have discovered combined with the most recent ones. Between these 9 players the combined cost that Udinese bought at is around £7.5m. They sold them for an astonishing £121m (and that’s not including the value of Nicholas Lopez, who was moved from Roma to Udinese as part exchange for Mehdi Benatia. Lopez is now on loan at Hellas Verona who have the option to purchase him for another £15m). These are only some of the names as well; they’ve discovered more players such as Asamoah Gyan, Sulley Muntari, Oliver Bierhoff and many more.
Further to the outstanding success off the field, the quality that they’ve bought in has helped on the pitch as well, with Udinese reaching Europe in 6 of the last 10 seasons (including an incredible 3rd place finish in the 11/12 season).
However, despite this, Udinese were now recruiting so many players that not enough of them could get into the first team to display their wares and were being wasted (they did loan players out, but there’s no guarantee of first team football this way, and as such the players couldn’t reach their full potential). So, Giampaolo and Gino sat down to think about a way in which they could rectify this.
They came up with the idea that buying a club in another country would be the best way to go about things. In true Pozzo fashion they decided that they didn’t want to spend a lot of cash on a club, and instead would buy a low-level club and raise them up through the leagues. So in 2009, with the doors on Granada’s stadium about to close due to financial difficulties, in swooped the Pozzos to rescue the team, who were in the 3rd tier of Spanish football.
The first season under the new ownership was a roaring success, with the Granada team’s reshaping by a massive 10 loan signings from Udinese, obviously being a key factor. Granada won promotion, and moved on up to the Segunda division. Six more players joined from Udinese (including Siqueira – now at Athletico Madrid), once again Granada got promoted, this time into La Liga.
There’s no data on how much the Pozzos spent on purchasing Granada, but it couldn’t have been a huge amount. They reaped the rewards – a new club meant a new academy that could cater specifically for Spanish speaking players, opening up a wealth of new signing options from South America, who previously may not have wanted to move to Italy. It also meant an increase in revenue from TV rights, however due to how the TV rights are negotiated in Spain, the money is not a lot for a club unless you are of course Barcelona or Real Madrid (Granada earned an estimated €12m from TV rights in the 12/13 season). This was no real cause for concern for the Pozzos though, as they were showcasing their players, and it was working. Despite only being in La Liga for three complete seasons, they already made €8m profit off the sale of Siqueira and €3m profit (as well as an 80% sell on clause) on Yacine Brahimi (now of Porto and in great form). There’s many talented youngsters at Granada, many of which will most likely move on to bigger clubs in the next few years; the young Colombian centre-back, Jeison Murillo, has put in some great performances this season and has already picked up four caps for Colombia aged just 22.
Now that the Pozzos knew that their model worked, the next logical step was to repeat it. Their choice was a club in England, where the huge TV revenue (then £80m minimum for a season, now it’s up to £120m), would be like gold-dust to the Pozzos. The club they decided upon was Watford, who like Granada, were close to being shut down. Watford already had a big reputation for developing talent, with the likes of Ben Foster, Tom Cleverley, Adam Johnson, Andros Townsend and Gabriel Agbonlahor all spending time at Vicarage Road on loan. They also have a great academy set-up, which has produced players who make the first team and then are sold on at a profit, the most notable of which being Ashley Young. This made them an ideal target for the Pozzos as the values matched perfectly.
So in the summer of 2012, the Pozzos bought Watford for an estimated £12m. The summer saw a massive influx of players, with twelve arriving from Udinese, along with two from Granada, all of which contributed to the Football League changing the rules on the amount of loan signings a club can have (to a maximum of 5 in a match-day squad). Watford then simply signed the players on permanent deals instead, which cannot really be challenged legally.
Watford finished 3rd, narrowly missing out on the riches of the Premier League in the Play-Off Final. The following season was not as promising as the first, with a dismal 13th placed finish. Watford now have arguably their strongest squad under their Pozzo reign and will be looking to reach the Premier League.
If Watford do indeed make it to the Premier League, I am sure the huge Pozzo network will bring players of huge amounts of potential and quality that haven’t been bought by Udinese or Granada yet, along with some fringe players of the Udinese team. And there’s some great players there (I’ll be doing a scout report on one of them, Bruno Fernandes, soon) who would flourish in the Premier League.
You’re probably wondering how the Pozzos manage to find so many good undiscovered players, and if they’ve got some genius system. Ironically it comes down to one criteria – money. I highly doubt that anyone spends as much on scouting as the Pozzos do; they have upwards of 50 contacts, dotted around the globe, usually in places where competition for players is low (for instance they’d have a lot more competition for a player in Brazil than in Chile, which will also raise the initial cost of the player). These contacts act as a sort of Chief Scout for that particular region, they then have further contacts dotted throughout the country. All of this data is then sent back to Pozzo HQ and pooled. Players are then either purchased outright if cheap enough, or if someone is moving on, then a suitable replacement is bought in (normally for a fraction of the cost of the outgoing player). It’s a remarkably clever way of doing business, and in a sport that’s renowned for clubs losing money it’s refreshing to see owners providing long-term stability (including a newly built stand for Watford) for clubs that would’ve most likely had to declare themselves bankrupt.
In April 2005, energy drink and extreme sports powerhouse Red Bull purchased the club Austria Salzburg. They immediately re-branded the club as Red Bull Salzburg, renaming their ground to the Red Bull Arena. With football fans being as passionate as they are, this did not go down well with a majority of Salzburg supporters. Many fans renounced their support for the club, and one fan group even went as far as setting up a new team with the old name, who went on to achieve back to back promotions in their first four seasons, and are now currently in the third tier of Austrian football, attracting average attendances of over 1000 supporters per game.
Despite the fan opposition, Red Bull Salzburg have flourished under the new ownership, winning five titles in the nine seasons that they’ve been in charge, with them finishing in second for the other four seasons. The financial clout that Red Bull has obviously got has clearly been a huge factor behind this; the Austrian Bundesliga is not a league renowned for having money, and with just one Champions League place up for grabs, it’s been remarkably easy for Red Bull Salzburg to assert their dominance over the league as the monetary reward for being in the Champions League helps them to pull further away from the pack. The difference is obvious, with transfermarkt.co.uk valuing Red Bull Salzburg’s team at £53.15m – the team with the next highest value is valued at £18.7m. It looks unlikely that their dominance of Austrian football will end anytime soon.
Red Bull furthered their profile in football a year later with the purchase of New Jersey MetroStars. Once again they immediately rebranded the team to become the New York Red Bulls, however the change to the stadium name was saved until 2010 when the team moved to the newly built Red Bull Arena. Sadly for Red Bull, the New York team hasn’t been as dominant as the Austrian team, with two league wins to their name so far – however they have gone on to lose in the playoffs in both of those seasons. Big name stars such as Thierry Henry and Tim Cahill, alongside the growing popularity of football within the USA, has seen attendances rise by a few thousand over the last few years, and I’d imagine that their presence within the game will continue to rise over the next few years.
The latest acquisition is RB Leipzig (formerly SSV Markranstädt) who were purchased in the summer of 2009. When bought, SSV Markranstädt were in the fifth tier of German football and were given the aim of playing Bundesliga football within ten years. Five years on and they’re looking well on track to make that target; they achieved three promotions in five seasons and are at time of writing sitting 6th in the 2 Bundesliga, six points off the top spot. However, it has not all been rosy for the German team, with large amounts of opposition. Fan protests were limited (bar an incident where Leipzig’s pitch was damaged by weedkiller!), as it was of a general consensus that football in Leipzig needed reinvigorating. Most of the opposition to the change was from other clubs in the league with a ten team campaign set-up to stop RB Leipzig being given a license to play in the 2 Bundesliga.
Further to this, Red Bull have also got two more teams, one in Brazil and one in Ghana (aptly named Red Bull Brasil and Red Bull Ghana). These seem a lot less commercially viable, and more community driven than the others, so I won’t concentrate on them too much, however they do still play a part in the grand plan that Red Bull have, and that’s in the area of scouting. If Red Bull can find one multi-million pound player from either their Brazilian or Ghanian camps then it would have been worth the venture, as they cannot be spending much on either franchise.
Red Bull have recently started moving players between their teams like the Pozzos, but not to a huge extent – four players have moved from Red Bull Salzburg to RB Leipzig in the last five seasons. Instead, they use their knowledge from within the respective countries to buy players when needed (Leipzig bought two players from Rapid Vienna in the Austrian Bundesliga over the summer) and have started looking for youth rather than already established names. Ralf Rangnick who is sporting director of both RB Leipzig and Red Bull Salzburg recently said that most of the players they scout are now between the ages of 17-23.
Despite this, it is baffling that Red Bull don’t adopt a model more like the Pozzos. It’s easy to see that they aren’t after huge amounts of profit from transfers, but rather an exercise in brand marketing. With the sheer amount of financial power behind them, it’d be relatively easy to set-up a huge scouting network, especially as they must have networks within multiple countries already. Since they don’t have a particular worry about finances it wouldn’t be hard to amass a bunch of talented players, who’d easily be able to fire Leipzig to the Bundesliga and maintain Salzburg’s dominance, as well as potentially winning the MLS for the first time in New York Red Bulls’ history. The players then not good enough for the top divisions could be moved on to whichever club is their next target.
They could of course expand the model further, and I’m sure it’s their intention to have teams in all of the top footballing countries. Whether or not they’re allowed to re-brand the clubs will probably decide their future in certain countries, especially in England where Hull owner Assem Allam was recently denied an attempt to re-brand Hull City to Hull City Tigers. If a move like that is forbidden then I find it hard to believe that Red Bull Reading or something similar would be allowed, however as they have done with RB Leipzig, I wouldn’t be surprised if they find a loophole (the RB officially doesn’t stand for Red Bull, it stands for RasenBallsport, which translates to “lawn ball sports” as the Bundesliga has strict rules regarding advertising).
Belgian billionaire Roland Duchâtelet purchased Charlton Athletic in the English Championship in January 2014. In doing so he had just bought his fourth club – alongside Charlton he is also the owner of Standard Liege (Belgium), Alcorcon (Spain), and Carl Zeiss Jena (Germany). As well as owning these teams outright, his son owns Ujpest (Hungary). Whilst the Pozzos and Red Bull have built their empire over a period of many years, Duchâtelet has been quick to expand his empire, with the summer 2011 purchase of Standard Liege being the first club he bought.
I have not yet worked out what Duchâtelet has planned with his network of teams; movement between the teams is quite limited, with just five players moving from Liege to another team he owns (including Ujpest) over the past two seasons (the exception is Charlton, in which seven players have moved from Liege to Charlton in the year he’s owned the club). The reason behind the moving of players to Charlton was because as soon as he took over he offloaded some key players including Yann Kermorgant who had scored 29 goals in 89 league games for Charlton, and with the club floundering towards the bottom half of the table, needed stability to help ensure their Championship survival. Despite a promising start to the 14/15 season, Charlton are now five points off the playoff positions, and I wouldn’t be backing them to make the play-offs.
His other teams haven’t really set the world alight either, with Carl Zeiss Jena finishing third in the German Division 4 last season (a massive eighteen points off the promotion play-off) and at time of writing are sitting in fourth place, seven points off the top. Alcorcon were purchased just days after Charlton, and finished their first season under Duchâtelets control in 9th place (four points off the play-offs), they are currently sitting in seventh, missing out on the play-offs via goal difference. It will be interesting to see, if Alcorcon make the play-offs and subsequently get promoted to La Liga, how Duchâtelet deals with transfers – to me he seems very eager to offload talent for fees arguably below their market worth.
Since taking over Liege he has offloaded stars such as Witsel (for £8m), Benteke (for less than £1m), Defour (for £5m) and Mangala (for £5m). Then in the summer he sold Michy Batshuayi and Imoh Ezekiel, who between them contributed 28 goals as Liege finished top of the table (before losing in the title play-off) – the combined price for these two talented 21 year olds with the world at their feet was just £11m, a paltry sum in this day and age. Quite tellingly, Liege are now sitting 8th in the table, with just eight wins in the eighteen games played so far.
Whilst Red Bull and the Pozzos want all of their clubs to succeed and reach the highest levels, I’m not convinced that Duchâtelet is wanting the same. He said in an interview not long after purchasing Charlton that “It’s not to be excluded that some players will be sold to Standard Liege and play Champions League.” To me this sounds like he doesn’t really care about the fortunes of any of his clubs except Liege and will happily swap one team’s star player for another most likely inferior player, to benefit Liege. This might not entirely be the case however, and it’s possible that Duchâtelet does have a big plan for all the teams he owns as I’d expect from a businessman of his calibre. However as has been proven many times before, a good businessman doesn’t necessarily equate to being a good chairman of a football club; and I’d be somewhat apprehensive if I was a supporter of any of his non-Liege teams.
The above aren’t the only examples of MCOs within football. Manchester City owner Sheikh Mansour bin Zayed Al Nahyan has created the “City Football Group” which will certainly be one to keep an eye out for in the future. Manchester City will most likely be their main priority, with the amount of money that has been pumped into the club with the intention of making it one of the best in the world.
They are going to expand that monopoly with the creation of New York City FC and Melbourne City FC, new football clubs in two of the countries where football has exploded in popularity (America and Australia), and they are no doubt hoping to benefit from the masses of talent that will no doubt come from these countries in the future. This is a remarkable change in tone from the precedent they set with purchasing players for ridiculous amounts (they have spent upwards of £1b on players since the 08/09 season) and shows a swap towards nurturing youth. Deals with both the FA and the Right to Dream academy in Ghana will allow them to get first access to any talented players to come from that region, and a similar deal is in place with other teams, including Sporting Lisbon. A brand new training ground that has cost upwards of £200m and has state of the art facilities will be used by every single Manchester City youth team will also only help to attract young talent to its doors.
I believe that the amount of MCOs will increase on a drastic scale over the next few years, whether it’s going to be businessmen nurturing young talent to either sell or dominate the game (like the City Group or the Pozzos) or as a branding exercise to advertise companies (like Red Bull). It’s the next logical step in the commercialism of the game, especially as the rewards for doing well also increase. I’m sure they will utilize great services similar to private jet charter cost estimator to exercise their brand.
The rise of the MCO will also be helped by the increasing transfer fees we are seeing in football. More and more clubs are turning to sending scouts further afield to scout younger talents as they’d obviously rather buy a promising 14-17 year old for a small fee than have to pay a multi-million transfer fee later on once his career has taken off. As it can be hard for a burgeoning talent to break into the first team of a well-established and successful club, they’re often loaned out, but the standard of coaching and opportunities can be limited even then, however if loaned to a lower league team under the same MCO then all of this is under control and “in-house”, and their development can be closely monitored.
Corporations investing in teams will also continue to rise, and I have no doubt that in the next three years, there will be at least one more company joining Red Bull in the world of football, the financial power that some corporations have will surely see them investing as a form of advertising.
The only concern is that businessmen who have no real idea of what they’re going to try and achieve may purchase teams, killing off what is already a diminishing fanbase (at lower leagues). Re-branding of team names is also a sore aspect for many people, with a name-change effectively destroying the clubs heritage and history.
One things for sure though, MCOs are here to stay.
Written by Stuart Reid
Dislikes - The inevitable but soul-crushing rise of commercialism in Football
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