Finance

From Genoa to FC Den Bosch: investors throw themselves into professional football

“There is a lot of money to be made in the football world.” In one sentence, sports marketer Frank van den Wall Bake explains why investment funds have been buying so many football clubs lately. It has nothing to do with club love, as the Utrecht entrepreneur Frans van Seumeren still exhibited when he bought part of FC Utrecht in 2008.

There are not many like Van Seumeren, says Van den Wall Bake. “Most investors just want to make money quickly. And that can lead to difficult situations. For example, an investor tells a club that they have to sell a certain high-performing player because it makes a lot of money at that time. While the club wants that player With the sale of shares to investment companies you are treading on thin ice.”

Football clubs earn money from merchandising, ticket sales, international football tournaments such as the Champions League and transfers. Shareholders receive a certain percentage of the profit, if at least a profit is made.

FC Den Bosch

Most club purchases have so far been made in countries such as Italy, Germany and Spain, but the trend will blow over to the Netherlands, says the sports marketer. “There is also money to be made with Dutch football. It cannot be compared with the amounts that are involved in, for example, Italy. But Ajax and Feyenoord are also potentially interesting clubs.”

This also seems to apply to the lesser gods. A club from the first division, FC Den Bosch, came into the hands of a group of American investors after approval from the KNVB this summer. But what do these investors (Pacific Media Group (PMG), Path Capital, Chien Lee, Randy Frankel and Krishen Sud) gain with the purchase of the small football club from Brabant?

“PMG focuses specifically on smaller clubs. They previously took over KV Oostende,” says sports marketer Bob van Oosterhout about the main investor. Also on PMG purchase list: AS Nancy (France), Esbjerg (Denmark), Barnsley (England) and FC Thun (Switzerland).

None of them are multimillion-dollar clubs. “But you can earn money quickly if you train a few talented players. More and more investors are finding their way into the football world,” said Van Oosterhout, who bought the Bossche basketball club Heroes five years ago.

“In my case it is about small amounts, and my purchase was not money driven. I didn’t buy Heroes to make money. The basketball club was having a hard time and I wanted to help. But there are also investors who have no love for their club and only want to get rich quickly,” says Van Oosterhout.

lifebuoy

The investors own more than 50 percent of the shares of FC Den Bosch. “Theoretically, they can demand that the well-performing players be sold. That is the fate of the small clubs, they give up control. But you also have to see it this way: without that investment, the clubs would simply go under. is the last lifeline.”

angry fans

The sports world and especially the football world is volatile. If star player Christiano Ronaldo breaks his leg and the club does not make it to the lucrative Champions League, Manchester United, owned by the Glazer family, is worth millions less. “Hedgefunds are not afraid of that. It also concerns multi-year contracts, so they calculate a possible less season.”

The Glazer family, which bought the first shares of the club in 2003, has made so much money from Manchester United in recent years that the club has not been a champion since 2014. It was – combined with the plan for a separate competition for top clubs – reason for the fans to storm the field in May of this year. The Glazers Out, was their message.

“How much a shareholder earns and can get from the club depends on the agreements in the contract,” says Van den Wall Blake. “But it’s certainly lucrative.”

shadowy world

It is formally not allowed, but behind the scenes investors sometimes also own a player, claims Van Oosterhout. “You don’t want to know what goes on in that football world and who all benefit from transfers of young players.”

Many hedge funds are currently getting into that data driven be, he knows. “Then she sees a young player somewhere in Hungary who is not yet doing well, but who all parameters say can be a pearl. They let them grow. If he has a great season, it will be transferred for millions. If not. goes well, they write off the investment.”

Investment funds have recently discovered the football world as a lucrative way to make quick money. “The sports business is growing like crazy and is becoming more global. And because of the low interest rates, people are also looking for new ways to earn money and they start investing and investing. Those two things are now coming together.”

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