French football clubs, an eldorado for investment funds

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Red Star fans contest the entry of the 777 fund into the capital of their club, at the Bauer stadium, in Saint-Ouen (Seine-Saint-Denis), on April 15.

It’s a bulimia: in seven months, 777 Partners got their hands on three prestigious football clubs. The Miami-based investment fund successively took over Genoa (Italian first division), Vasco de Gama (Brazil) and Standard de Liège (Belgium). Another club should soon fall into his hands since the American group is about to also take over the Red Star, an institution of Ile-de-France football that has fallen into National.

Like 777, private equity heavyweights have decided to bet big on European football: Arctos Sports Partners, Dyal Capital Partners, Galatioto Sports Partners, RedBird Capital Partners, Silver Lake and CVC are among the most active.

“They are taking advantage of the difficult financial situation of European clubs to make their market at low prices, hoping to topple over in a few years”, recently explained to the Bloomberg agency Jesse Du Bey, founder of the Orkila Capital fund, which took 23% of the capital of FC Bruges in July 2021.

According to the European Club Association (ECA), the pandemic has cost European clubs 8 billion euros in lost revenue, and many are bloodless.

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In France, they were also hard hit by the bankruptcy of their broadcaster, Mediapro, in 2020, lowering their valuation accordingly. « In search of rapid capital gains, funds anticipate a recovery in the sports rights market », comments Jean-Pascal Gayant, sports economist.

“France is the best place to invest in football, adds Vincent Chaudel, founder of the Sport Business Observatory. Since Euro 2016, the stadiums are in good condition. The French team is world champion. The economic environment is better than in Spain or Italy. Above all, there is no law that prohibits a private investor from owning more than 50% of a club, as is the case in Germany. »

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France is also renowned for the quality of its training centres. After Brazil, it is the country that exports the most players, and “trading” (purchase and resale) has become the cornerstone of the profitability of certain clubs, with Monaco as a model.

Serial failures

Behind England, where the Glazer family, at Manchester United, has almost quintupled its investment in thirteen years, has France become the Eldorado of financiers who want to invest in football? To have. Because most takeovers of French clubs by players from finance have ended in failure.

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