Foreign Investment in Soccer Is Here to Stay Written By Dilan Minutello
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occer, the world’s most popular sport, and its organizers have faced several crises over the past few years. In 2015, a corruption scandal unfolded within FIFA, the sport’s worldwide governing body. U.S. federal prosecutors indicted several FIFA executives on charges of wire fraud, racketeering, and money laundering. FIFA officials forced Sepp Blatter, FIFA’s president, to resign, with Blatter subsequently banned from participating in any football related activity for eight years. This, along with the large losses faced by clubs over the course of the COVID-19 pandemic, led large clubs across Europe to form the European Super League (ESL) in early 2021. The league, independent of FIFA’s regulations, preselected the best clubs to compete against each other and control their own television viewing rights. Amidst public outcry, the European Super League never gained traction and was quickly disbanded. Effectively, the league would allow the wealthiest and most prominent clubs to play against each other more frequently. For smaller, less-popular teams the ESL would cut out important revenue from games with teams such as Real Madrid in Spain and Manchester United in England. Would-be backers of the ESL, such as JP Morgan Chase & Co., quietly left the teams to their own devices.
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Yet the development and failure of the European Super League displays a shift in football clubs, away from the status quo of fan-centric revenue to private investment. A number of clubs have had their trajectories greatly altered by generous external investment from wealthy backers, almost exclusively foreign, such as Paris Saint-Germain F.C. (Qatar) and Manchester City F.C. (United Arab Emirates). Dozens of teams across Europe’s top domestic leagues, such as the German Bundesliga, Italian Serie A, Spanish La Liga, and French Ligue 1, have also been bought in the past few years by foreign companies, individuals, or state-sponsored enterprises. A few teams thrived under foreign investment: Paris Saint-Germain and Manchester City progressed from mid-level teams to perennial title winners and Champions League title contenders. They have also generated considerable amounts of revenue. Of the top fifteen clubs in football ranked by revenue in the 2019/2020 season, eight are owned by foreign investors, and three of them owned by American businesses. The clubs’ annual profits regularly sit between 300 and 700 million euros, with television rights selling for billions of euros.
dle Easterners, and Chinese aristocrats financially backing teams has seemingly given way to a new wave of club financers. The traditional management structure behind clubs in the European and global professional club soccer market has been increasingly uprooted by credit, investment, and private equity funds. AC Milan, one of Italy’s biggest clubs, was bought by Elliot Management Corporation in 2018 after their previous owner, Chinese national Li Yonghong, defaulted on debt obligations. Some firms have loaned money to help clubs stay afloat. Others have purchased media rights, some bought numerous smaller teams with longer term plans for growth and development.
With shorter contracts and more players on the move, cash injections can help teams build better rosters and recruit big names. Newcastle United, an English team, was historically a perennial Premier League team with little top-level success. In October of this year, the Saudi Arabian public investment fund purchased the team for $409 million. With a large amount of that money under the disposal of the team’s management, the team is expected to embark on a spending spree come the next open transfer window in January. Newcastle will look The era of rich soccer-passionate to buy up the contracts of several billionaires, petroleum-rich Midbig named players that find them-
