Deals targeting European football teams more than double in value to £6.9bn in the past year
Total number of deals increased 65% between 2021 and 2022
Growth of sports holding companies helps fuel increase in English football club deals
The value of M&A and major stakebuilding deals in the European football industry has jumped 123% in the past 12 months, rising from £3.1bn to £6.9bn1, according to research from international law firm RPC.
RPC’s research also shows that the number of deals in the football industry increased 65% from 20 to 33 in the last year, as US-based sports holding companies, Gulf investors and PE houses continue their expansion into the sport.
Jeremy Drew, Partner and Head of Sport at RPC, says that sports holding companies are accelerating the pace of M&A deals in the sector. Many are specifically seeking to achieve economies of scale and diversify their portfolio of sports assets - which will only be achieved by adding more football clubs via acquisitions. City Football Group, owner of Manchester City, recently expanded its portfolio with the acquisition of Italian Serie B team Palermo F.C this year, and Red Bull has used its ownership of multiple teams to transfer players between them.
As a result of holding companies expanding their football team portfolios, they could also see improvements in efficiency, a reduction in duplicated costs and improved profitability.
Holding companies, like Global Football Holdings, are also looking to diversify portfolios across a variety of European leagues partly to manage risk but to also reduce reliance on a single source of income and improve overall financial stability.
Jeremy Drew says that the sale of Chelsea for £2.5bn this year has set new expectations over prices, encouraging some existing owners to seek exits. Tottenham Hotspur, Manchester United and Everton FC are either up for sale, or rumoured to be.
Variety of revenue streams increases appeal of investment in sports teams
The growing popularity of women’s football, revenue increases from broadcasting rights, merchandise sales and sponsorship deals have contributed to investors increasingly viewing the sports industry as profitable.
Mutually beneficial relationships
Sports teams benefit from investment not just financially but also with expertise, added value e.g. modernising stadia and regeneration of the local area and debt financing options for owners looking to make acquisitions and expand.
1Year end, 31 December 2022