Photo: Frank Van Hevel    CC BY NC-ND 2.0

THE characteristics of the free-market economy have long been adopted by football, including the once prestigious mergers and acquisitions industry. In KPMG’s Football Benchmark’s latest paper, multi-club ownership is discussed, highlighting a growing trend across the sector – at a time when the corporate finance sector is seeing a big drop in M&A activity.

In recent months, Atlético Torque (Uruguay) have become part of the City Football Group, Atlético de Madrid have invested in Atlético San Luis (Mexico) and AS Monaco have agreed to acquire Cercle Brugge KSV (Belgium).

It is not a recent development, however. In the late 1990s, Tottenham’s owners, ENIC, also held a majority stake in Slavia Prague and a small shareholding in AEK Athens.

Naturally, when owners have more than one club in the same [UEFA] competition, risks emerge around a conflict of interest. But as KPMG reports, major leagues have implemented more rigorous legal safeguards on common ownership. While these regulations have not prevented clubs’ expanding internationally through acquisitions, they have often targeting other European clubs not playing UEFA competitions or clubs that are members of other confederations. KPMG says: “When the objectives of the ownership-sharing clubs are complementary, a broader network may result that can leverage synergies from both a sporting (e.g. improve scouting networks) and business perspective (e.g. mutualize sponsorship efforts, cost efficiencies, sharing expertise and best practices).” Ambitous groups like Atletico Madrid and Manchester City have made investments in other clubs with the aim of hoping to benefit from future returns. Both Atletico and the City Football Club have a common goal of accelerating their brands, epitomising a trend that has seen major clubs attempting to capture a global, rather than merely a national or even regional, audience. Atletico have already invested in India while City have expanded to the US.

KPMG also points to the Red Bull club network as an example of how an enterprise with little past association with football can leverage a multi-club strategy. UEFA may have to set a new precedent if two of the clubs from the network, RB Leipzig and RB Salzburg, both qualify for the UEFA Champions League in 2017-18.