Sports Multi-Ownership Model: Franchises That Are Owned By The Same Corporation

takumi minamino playing for rb salzburgUntil the turn of the new Millennium, the idea of a football club, particularly being linked with another in terms of ownership by the same people seemed unthinkable, however, over the last couple of decades, we have seen this gradually start to increase.

There is no doubt that sport is a multi-billion pound business, sparked by lucrative media rights due to mass global demand which in turn has led to highly profitable sponsorship deals.

When Roman Abramovich bought Chelsea in 2003, it almost sparked a new dawn in football especially with the club essentially becoming the first privately-owned in the world, that could splash out hundreds of millions of pounds on players.

However, compared to some sports (mainly US), football was, for all intents and purposes, just catching up. There were already baseball, American football, ice hockey and basketball teams that had billionaire owners – for a long time, the latter had been one of the highest-earning sports in the world.

In football, the thought that the same owner could have multiple football clubs or sports franchises was something that most people hadn’t even considered – especially during the nineties when there was nowhere near the amount of money available compared to today.

The nearest that a football club came to essentially being thought of as a ‘business’, was when Manchester United floated on the London Stock Exchange in 1991 in a bid to try and raise £10 million, via the availability of publicly traded shares.

At the same time, British industrialist Jack Walker bought Blackburn Rovers (the nineties equivalent of Chelsea’s takeover by Abramovich), with the intention of turning them into a powerhouse, from the proceeds of the sale of his steel business. It resulted in one solitary Premier League title, following a considerable (at the time) outlay on top players, however, their inability to build a brand, led to this just being a temporary situation.

Early Signs Of Multi-Ownership In Sport

love united hate glazer anti man united owner sticker on post
Sunfox, CC BY-SA 2.0, via Wikimedia Commons

The first sign of the multi-ownership model, at least in English football, was when the American Glazer family submitted a bid for Manchester United in 2005, to start the process of taking them back into private ownership, buying a substantial percentage of the shares.

This caused a significant amount of unrest, especially among die-hard United fans – a faction of which broke off from the club to start their own, which would be called ‘FC United of Manchester’, starting at the very bottom of the English football pyramid.

Such protest came due to an unwillingness to be recognised as part of a club, whose owners were not only foreign but had business interests elsewhere. The Glazer family owned the American football franchise, Tampa Bay Buccanneers and there was a lot of criticism that the purchase of the Premier League football club was an attempt to help prop up their US business.

For a number of years, criticism of this endured, with fans alleging that they saw the football club as a revenue generator as well as there being questions as to whether the Glazer family would be willing to invest in pushing the club forward from a transfer perspective so that they could continue to compete at the highest level. It was perhaps, manager Sir Alex Ferguson’s faith in the new ownership that helped to sway most of the doubters, especially when the club continued to win multiple Premier League titles, as well as the Champions League.

Another highly controversial buyout of a Premier League football club came in 2011 when American businessman, Stan Kroenke took full control of Arsenal, having previously been a shareholder and board member for the previous three years.

Arsenal is owned in its entirety by Kroenke’s corporation; Kroenke Sports & Entertainment, which he founded in 1999 in Denver, as the holding company for his various business interests. The full takeover was followed by a backlash from Arsenal fans – again many of whom took the stance that the motivation for this was an attempt to provide a solid foundation for his other sports franchises to grow. However, over the years, the businessman has more than shown his commitment to the club, spending 100s of millions on players and securing elite level sponsorship deals; Emirates being chief among them.

Kroenke’s company has a diverse sports portfolio; arguably one of the biggest in the world, with the US MLS (Major League Soccer) team, Colorado Rapids, NBA side, Denver Nuggets, NHL ice hockey side, the Colorado Avalanche and the NFL team, Los Angeles Rams, which, perhaps unbelievably is Kroenke’s biggest asset, when considering the global reach of Arsenal.

American Model Becomes Accepted In English Football

USA & UK Deal HandshakeCompared to a decade ago, the perception of English (at least Premier League) football clubs being owned by US sports parent companies, that also have American sport franchises has almost become accepted as ‘the norm’ – or certainly the mood among fans is a lot calmer.

What followed on from the Arsenal takeover in 2011 was the widely broadcasted interest in Liverpool FC from US-owned corporation, the Fenway Sports Group (FSG), who had started to invest in the club as early as 2010 and gradually acquired more shares in the years that followed.

Again, the mood among Liverpool fans, in the early years, at least was one of uncertainty, however, it can be said that this is at least one US takeover that has paid dividends, buying a substantial amount of good grace among Liverpool loyalists.

Being able to convince and install the enigmatic Jurgen Klopp as manager (one of the most sought-after in Europe at the time), was arguably the turning point in the FSG ownership tenure, and what followed was the introduction of a brand of exciting football that arguably never been seen at the club during the Premier League era.

Backing Klopp in the transfer market (with him being able to attract the top talent) has led to them winning the Champions League – a season after losing in the final to Real Madrid, which was followed by a seemingly elusive Premier League title a season later.

Unbeknown to many, FSG, principally owned by John W. Henry is one of the largest multi-sport businesses in the world, with not only Liverpool under their umbrella but RFK (Roush) Racing, the Boston Red Sox (arguably one of the biggest baseball teams in the world) and, most recently the NHL ice hockey side, the Pittsburgh Penguins.

Another club, who seemingly appear to operate somewhat under the radar, but which are part of the multi-ownership model is Crystal Palace. Majority shareholders Joshua Harris and David S. Blitzer also have NHL side, the New Jersey Devils and NBA outfit, the Philadelphia 46ers under their purview. While the club has not been as free-spending as some of the others, Crystal Palace are an established Premier League club with a significant fanbase.

Perhaps in the same category is Fulham under the ownership of Shahid Khan, but a club who bounce between the Premier League and the English second tier, however, they are also part of a multi-ownership model. Khan, who is an American businessman, with Pakistani descent, also owns All Elite Wrestling in addition to NFL side, Jacksonville Jaguars.

The Multi-Football Club Ownership Model

Over the last decade, we have seen the emergence of businesses that have solely concentrated on building a football dynasty, focusing on starting (or buying) football clubs around the world in order to complement their main asset. Below, we outline some of the main ones.

City Football Group

manchester city bad with stadium in background blurredIn 2008, Manchester City were taken over by the Abu Dhabi United Group – essentially the investment vehicle of the Emirati state’s royal family, which overnight transformed the club’s future, providing an almost bottomless-pit of money in addition to a grand vision. Very quickly, the cash flowed in an attempt to gradually turn them into contenders on a global stage.

However, this was only part of a much larger ambition and as a result, the City Football Group was founded as the British holding company, that the Abu Dhabi United Group have majority ownership of.

The aim was simple. To slowly start founding and acquiring football clubs in other countries (most of these having the suffix ‘City’ at the end of their name), so that they could establish a global brand in all four corners of the world, but also as a way of being able to help their main asset; Manchester City. It meant that players could easily be traded between the network of clubs that they owned, with these also being able to act independently as separate entities as well.

Such was the case with MLS side New York City, which was founded in May 2013 to try to strategically grow the company’s brand, but also forge an alliance with US fans who could identify Manchester City as being their ‘English team’. It also meant that they could attract elite players (albeit in the twilight years of their career), as was the case of David Villa who arrived from Barcelona, fellow lesser-known La Liga footballer Andoni Iraola and perhaps famously Frank Lampard, after the player’s controversial stint at Man City, having moved from Premier League title rivals Chelsea.

Elsewhere, the City Football Group also has a successful operation in Australia, in the form of Melbourne City, who ironically, Villa went on to play for, in addition to a number of other ex-European based players including Patrick Kisnorbo, Ross McCormack, Tim Cahil and Harry Kewell to name just a few.

The group’s lesser known football assets around the world, include Japanese side Yokohoma F. Marinos, Uruguayan club Montevideo City, Chinese club Sichuan Jiuniu, India’s Mumbai City FC, Lommel SK of Belgium and Spanish club Girona FC, while in September 2020, Espérance Sportive Troyes Aube Champagne (ESTAC), or simply, ‘Troyes’ became the City Football Group’s 10th club.

Red Bull Group

red bull f1 car on trackArguably a different model to that of the City Football Group, Red Bull were already a major global brand when the company decided to take on a highly unique, yet very clever and effective growth strategy which has paid dividends. While the group has interests in many sports, including its own Formula 1 team, multiple European ice hockey teams, a sailing, skateboarding and surfing team, in addition to numerous others, it is mainly in football that the group has its main sports assets.

The group’s main football asset is undoubtedly German club RB Leipzig, however, under Bundesliga ruling, clubs are not allowed to be owned by a sponsor, which means a subsidiary was set up called RasenballSport Leipzig GmbH which owns 99 per cent of the shares. Arguably the group’s flagship football asset, being associated with the Red Bull Group, has transformed the club’s fortunes in recent years, with an explosive rise up through the German football pyramid, becoming one of the best sides in Germany.

However, perhaps the club to which the group has most allegiance to is Red Bull Salzburg, with Red Bull being an Austrian company. As a result, the club has dominated the Austrian football league since its association to Red Bull, however, it is often the case that many of their top players move to RB Leipzig.

A much less-known, though vital cog in the group’s footballing portfolio is FC Liefering which competes in the lower leagues of Austria, however, its importance cannot be understated. A breeding ground for some of Europe’s best players, who often move on to Red Bull Salzburg, then RB Leipzig and beyond, with vast sums changing hands, FC Liefering a big part of the Red Bull Group’s footballing fabric.

In numerous pockets of the world, you can also find the likes of New York Red Bull, who Thierry Henry went on to finish his career with, Red Bull Brasil, Red Bull Ghana and Red Bull Bragantino.

The Future Of Multi-Football Club Ownership

football cartoon with question markIn the past, the closest that you could get to this model was the increasingly outdated ‘feeder club’ model, which still exists, but it is not really anywhere as effective as it once was. Since the Manchester City takeover and the diversification of the Red Bull Group, many benefits have been noticeable from the establishment of global football enterprises.

As football increasingly continues to become even more of a business than it was, the likes of the two aforementioned corporations have taken it to the next level. More and more major clubs are the subject of either billionaire of nation state ownership and a number of them have already demonstrated interest in developing a network of clubs around the world, essentially as part of their global brand strategy.

Previously, this existed by way of arranging friendlies in certain areas of the world, where a football club wanted to increase its brand presence, while social media and deals with local television companies then started to take over. Now, it seems that multi-football club ownership is the next major strategy.

Recently, dynamic Italian Leeds United owner, businessman and media mogul, Andrea Radrizzani has expressed interest in forging a European network of football clubs and in 2020 spoke about the potential that this model can have.

“I do believe that a consolidated group in football, with multiple club ownership, can be a benefit in terms of synergies and creating value in the development of the players and, in some cases, also on the commercial side,” Radrizzani said.

“It’s something that I’m studying and exploring. I’m already in touch with some potential target clubs to acquire. I haven’t made any decisions yet.

“I’m still in an evaluation phase and I think that the model I have in mind is definitely different to what I see at the moment. It would be more focused on two or three countries in Europe where we can have close integration on the football side.

“The City [Football Group] and Red Bull models are very different; they have clubs in different continents. I don’t think that’s what I want to do.

“I want to do something much more integrated on the football side so there’s no big gap between the level of football quality between these clubs.”

Interestingly, since then, the entrepreneur has been linked with a takeover of Valencia as well as a number of smaller clubs in both Italy and Spain, though nothing concrete has yet materialised. Leeds United themselves, could become part of the global multi-sport ownership model, if minority shareholders 49ers Enterprises (who own NFL side San Francisco 49ers) complete an expected takeover in the not too distant future.

PSG, owned by QSI (Qatari Sports Investment) group – a vehicle of the Qatari royal family, could also look to explore the multi-club ownership model in the same way that the City Football Group have, with a similar effect.

The worry will lie for smaller clubs, that do not have the financial resources to compete on such a wider branding scale, that could ultimately affect their long term progress. When Chelsea were taken over by Abramovich, this was the beginning of the gap starting to expand, while also adding another contender in the European arena.

It is perhaps interesting that the Russian oligarch has not expressed a desire to become a multi-club business, however, he did reportedly explore the possibility of acquiring PSV Eindhoven over a decade ago, though nothing materialised.

As far as the future goes, what we have seen in football (and sport) since the early 2000s, is that things can change very fast, with these often linked to advancements in technology that affect the way businesses need to be run in order to continue to get the desired results. No one really can afford to be left behind.