What Are Football Club Networks Missing?
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What Are Football Club Networks Missing?

Matheus Almeida Matheus Almeida

Matheus Almeida

Football Business I Strategy & Planning

发布日期: 2024年7月8日
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Strategic Partnerships with a Digital and Commercial Strategy Can Unlock New Horizons for Football Club Networks

Despite their growing prevalence, the traditional Multi-Club Ownership (MCO) model in football faces increasing scrutiny. While MCOs aim to create synergies and shared successes across clubs, they often grapple with financial inequalities, regulatory challenges, and cultural misalignments. A fresh approach, focusing on creative strategic partnerships with a strong digital and commercial emphasis, could bypass these pitfalls offering even greater value for clubs, fans, commercial partners, investors, and all other stakeholders.

The Challenges of Traditional Multi-Club Ownership

1. Regulatory and Financial Constraints

Regulatory bodies like UEFA impose strict rules to prevent conflicts of interest, particularly in European competitions. This means clubs under the same ownership face limitations on transfers, loans, and tournament participation, which hampers their financial flexibility and strategic maneuverability.

Case Study #1 - INEOS / Manchester United / OGC NICE

A recent example of these challenges is the situation involving Manchester United 's new investor, INEOS /Jim Ratcliffe, who also holds shares in OGC NICE . Due to UEFA's stringent rules on multi-club ownership, Ratcliffe is considering selling his stake in OGC Nice to avoid conflicts and ensure compliance.

Why This Matters?

For multi-club owners, this situation underscores the complexity of navigating UEFA's regulations while trying to maximize the strategic benefits of owning multiple clubs. The decision to divest from one club to focus on another highlights the difficult balancing act required to maintain regulatory compliance and operational flexibility.

2. Cultural and Operational Disconnects

Merging clubs under a single ownership umbrella can lead to clashes in club cultures and operational styles. This often results in alienated fan bases and disrupted team dynamics, undermining the unity and shared vision that MCOs aspire to achieve.

3. Uneven Resource Distribution

MCOs frequently prioritize their flagship clubs, funneling resources and talent toward them, leaving smaller clubs underserved. This imbalance stifles the growth and competitive potential of these smaller clubs, counteracting the intended benefits of shared ownership.

Case Study #2 - City Football Group / ESTAC Troyes / Montevideo City Torque

A closer look at the cases of ESTAC Troyes and Montevideo City Torque within the City Football Group (CFG) illustrates how this imbalance plays out in practice and highlights the challenges faced by these "satellite" clubs.

1. Financial and Operational Constraints

Despite the backing of CFG, ESTAC Troyes has struggled financially and operationally. The club has faced relegation threats, narrowly avoiding a drop to the third division in the last season.

Similar to ESTAC Troyes, Montevideo City Torque experiences a significant disparity in resource allocation. While most of CFG's clubs enjoy substantial investments in infrastructure, talent acquisition, and marketing, Torque operates with much more modest resources. This restricts their ability to compete at higher levels within the Uruguayan league, limiting their developmental impact.

2. Talent and Resource Allocation

While Manchester City and other higher-profile CFG clubs benefit from significant investments and player transfers, Troyes and Montevideo City often see a limited inflow of top-tier talent and resources, having primarily relied on academy and lower-tier players. This disparity hampers their ability to compete effectively and diminishes their prospects for long-term success.

3. Lack of Strategic Focus

CFG's strategic focus tends to gravitate towards maximizing the success of their flagship clubs. This results in a lack of coherent, long-term planning for smaller clubs like Troyes and Montevideo City, which operate on the periphery of the Group's ambitions. The clubs' inconsistent performance reflects this broader issue.

The commercial and operational focus of CFG is heavily skewed towards their top-tier clubs. Torque and Troyes, on the other hand, receive limited attention in terms of marketing, commercial partnerships, and brand development. This lack of focus restricts their revenue growth and fan engagement, which are crucial for their financial sustainability and long-term success.

Outcomes

In the 2022/2023 season, Troyes was relegated to Ligue 2, highlighting the instability and challenges faced despite CFG’s ownership. The lack of significant support and strategic focus contributed to their inability to maintain a stable position in Ligue 1.

Montevideo City Torque has voiced concerns about needing more financial support and investment from CFG to achieve competitive parity in the Uruguayan league.

Despite their potential and strategic location, they remain under-resourced compared to other CFG clubs.

The Broader Implications

The experiences of ESTAC Troyes and Montevideo City Torque highlight a broader issue within the MCO model: the prioritization of flagship clubs often comes at the expense of smaller, affiliated clubs. This approach can undermine the very synergies and shared growth that MCOs aim to achieve.

Impact on Club Development

  • Competitive Imbalance: The uneven distribution of resources creates a competitive imbalance within the MCO network. Smaller clubs struggle to compete effectively in their respective leagues, limiting their ability to contribute meaningfully to the overall success of the network.

  • Talent Retention and Development: Smaller clubs often serve as stepping stones for players moving to flagship clubs, making it difficult for these clubs to retain and develop top talent. This disrupts their ability to build a stable and competitive team, further entrenching their secondary status.
  • Fan Base Alienation: The perceived neglect of smaller clubs can alienate their fan bases, who see their club's potential being overshadowed by the focus on flagship entities. This can lead to dwindling support and engagement, which are critical for a club’s financial and operational health.

Strategic Re-evaluation

To overcome these challenges, MCOs need to adopt a more balanced approach, less dependent on the group's direct resources that address the growth and development needs of all clubs within their network.

A Unified Digital Strategy: The Missing Link

A critical component missing from CFG and other MCOs' is the establishment of a unified digital strategy that could encompass for example:

  • Audiovisual Content: Coordinated production and distribution of engaging videos and behind-the-scenes content for all clubs in multiple different languages powered by AI.
  • Social Media Networks: Integrated social media management to promote consistent and cohesive messaging across platforms.
  • OTT Services and Apps: Developing and maintaining an over-the-top (OTT) streaming platform and mobile application to provide exclusive content and direct engagement with fans globally.

Connecting the Dots: Enhanced Visibility for All Clubs

By creating a centralized hub for digital content, CFG can not only connect Manchester City Football Club with its partner clubs but also foster stronger links among all clubs in the network. This interconnected digital presence will enhance each club’s global visibility, creating a synergistic platform that benefits the entire CFG family.

Amplifying Sponsor Value

A unified digital approach will offer immediate benefits to sponsors. For clubs like ESTAC Troyes, Montevideo City Torque, Esporte Clube Bahia S.A.F. , Girona Futbol Club , New York City FC , Melbourne City FC , Mumbai City FC , Lommel SK , Club Bolívar , Palermo F.C. , and other partners of the group, this means their sponsors gain access to a broader, global audience.

This enhanced visibility can significantly increase the value and attractiveness of sponsorships across the CFG network, enabling clubs to command higher sponsorship fees and secure more lucrative deals that make all clubs more competitive and with more financial resources to support the recruitment of quality players for the group.

Strategic Alliances and Joint Ventures

Strategic Alliances or Joint Ventures - not only between two clubs but also with several clubs - present a flexible approach to club collaboration, maintaining each club’s ownership and operational autonomy while fostering mutually beneficial relationships.

I already covered this topic in the article 'Leveraging Global Partnerships: A Winning Strategy for Football Clubs'

1. Flexible Collaboration Without Ownership Ties

Strategic partnerships allow clubs to collaborate on projects without the complexities of ownership. These can include shared scouting networks, co-investments in youth academies, or joint marketing campaigns. This flexibility enables clubs to leverage each other’s strengths without breaching regulatory constraints or diluting their unique identities.

2. Cultural Synergy and Local Engagement

Partnerships can be tailored to respect and enhance the cultural and operational uniqueness of each club. By focusing on areas of common interest and complementary strengths, clubs can create synergies that resonate with their local fan bases while enhancing their distinct identities.

3. Balanced Resource Allocation

Without the hierarchical structure of MCOs, strategic partnerships ensure more equitable resource distribution. Clubs can negotiate terms that reflect their individual needs and contributions, fostering balanced growth and development.

Case Study #3 - Red&Gold Football

The Red&Gold Football is a Joint Venture between FC Bayern München and Los Angeles Football Club (LAFC) that aims to facilitate collaboration and knowledge sharing between the two clubs, leveraging their unique strengths to enhance their global reach and operational capabilities.

The joint venture focuses on developing and promoting talent, fostering innovative business strategies, and expanding their brand presence in key markets, particularly in the United States and Europe.

For LAFC, aligning with a club like Bayern Munich, which has a rich history and extensive experience in European football, provides valuable insights and enhances LAFC's credibility and attractiveness on the global stage. This partnership can open doors for the MLS franchise to access European markets and talent, as well as adopt advanced training methodologies and operational strategies.

For Bayern Munich, partnering with a rapidly growing MLS franchise like LAFC helps the club strengthen its presence in the North American market, a region with significant growth potential for football. The venture allows Bayern Munich to tap into the US sports and entertainment industry, which is known for its innovative approaches to fan engagement and commercial success.

领英推荐

The investments by Red&Gold Football in clubs such as Racing Club de Montevideo , Grasshopper Club Zürich , and FC Wacker Innsbruck represent strategic moves aimed at expanding their influence, scouting and development networks across multiple continents, providing access to diverse talent pools and enhancing player mobility between clubs.

These partnerships allow for the exchange of operational best practices, ranging from sports science to business strategies, fostering innovation and efficiency across the network.

Success Metrics: The success of the joint venture will likely be measured by its impact on talent development, operational excellence, commercial growth, and brand recognition in the key target regions.

What Are They Missing?

Despite its potential, many people, even those well-versed in the football industry, might not be familiar with Red&Gold Football. This lack of awareness is a significant issue that undermines the group's commercial ambitions. If the venture remains relatively unknown, it hinders its ability to be self-sustaining and limits the benefits it can provide to both FC Bayern Munich and LAFC.

To be clear, no one expects clubs like Racing Club de Montevideo to generate the same revenue as giants like FC Bayern Munich or LAFC, just as Troyes and Montevideo City Torque can't match the financial power of Manchester City.

However,

For smaller clubs to thrive instead of draining the groups' resources (and the patience of their fans), they need more visibility.

By enhancing their international profile, these clubs and their sponsors could benefit from their association with globally recognized teams and brands. This would attract more resources, enabling these smaller clubs to compete more effectively for top talent within their respective leagues - whether in Uruguay, France, or other regions where these football groups operate.

Ultimately, this approach would align with the original intent behind investing in these clubs: to create a stronger, more interconnected network that benefits the entire group.

360o Integration: The Key to Success

In addition to a cohesive sporting strategy, a robust focus on marketing and commercial integration can transform strategic partnerships into powerhouse collaborations. This involves producing engaging digital content, and storytelling, leveraging each club’s brand strength, partner academies, and sponsors, to create compelling narratives and fan engagement.

  • Expertise in Football and Business Strategy: Successful groups often have professionals dedicated to overarching football strategy and business development. This ensures cohesive operations, maximizing sporting and commercial opportunities across the network.

  • Audiovisual Content and Storytelling: Creating captivating audiovisual content can enhance a club's global appeal and fan engagement. Documentaries, behind-the-scenes footage, and stories of players from the clubs and partner academies can build deeper connections with fans and attract new audiences.

Case Study #4 - Fenway Sports Group

The Fenway Sports Group (FSG) exemplifies this approach with its strategic leadership team. With Michael Edwards as CEO of Football, Julian Ward as Technical Director, and Pedro Marques as Director of Football Development, FSG aims to provide clear strategic direction and operational excellence in football operations.

Strategic Partnerships Over Multi-Club Ownership

Unlike the City Football Group, which invests in numerous clubs globally, FSG can leverage the immense power and prestige of Liverpool Football Club . By offering a strategic partnership, FSG extends the benefits of association with a globally recognized brand, providing access to world-class expertise in football operations and business strategy without the need for extensive multi-club investments.

Key Benefits for Partner Clubs

Partnering with Liverpool FC under FSG’s guidance offers numerous advantages:

  • Brand Association: Clubs can benefit from the strong, positive association with Liverpool FC.
  • Expertise Access: Partners gain indirect access to some of the best football professionals in the world.
  • Operational Excellence: Strategic guidance ensures high standards of performance and commercial success.
  • Global Visibility: The enhanced awareness with global visibility provides better commercial deals.

This approach allows FSG to replicate the benefits of a powerful club network through partnerships, making the Liverpool FC brand a cornerstone of strategic growth for all its partners with no need to make direct investments.

Out-of-the-box suggestion: A Strategic Alliance between Liverpool FC and the 'Right to Dream' Group

The Right to Dream Group, founded by Tom Vernon in 1999, began as a small football academy in Ghana with a mission to offer underprivileged youth opportunities to excel both on and off the pitch. RTD’s innovative model integrates elite football training with a robust educational curriculum and character development, producing well-rounded individuals ready for success in various aspects of life.

International expansion has been crucial to RTD's growth strategy. In 2015, they acquired FC Nordsjaelland in Denmark, creating a seamless pathway for RTD graduates to transition to European football while maintaining their cultural roots and holistic development focus. This acquisition supports RTD’s dual emphasis on high-level competition and community engagement.

RTD’s global reach expanded further with FC Tut in Egypt and the launch of San Diego FC in the USA. The Californian franchise, set to join Major League Soccer in 2025, extends RTD’s model to North America, focusing on nurturing local talent and fostering community connections. FC Tut, named after Pharaoh Tutankhamun, aims to replicate RTD’s successful model in Egypt, promoting youth development and cultural synergy between Africa and the Middle East.

A cornerstone of RTD's philosophy is gender equality. It operates the first residential girls' football academy in Africa, providing female athletes with equal opportunities to pursue their football dreams. This commitment is mirrored at FC Nordsj?lland, where facilities and training for women are on par with those for men, highlighting RTD’s dedication to inclusivity and equal opportunity.

Therefore, beyond its significant contributions to youth development and obvious technical benefits, the RTD project has extraordinary storytelling potential. This can be commercially leveraged through audiovisual content and social media platforms, opening new revenue streams and enhancing global engagement.

Strategic Alliance with Fenway Sports Group and Liverpool FC

Fenway Sports Group (FSG) is exploring opportunities to expand its portfolio by investing in other clubs to partner with Liverpool Football Club.

Instead of or in addition to this investment in other clubs, exploring a strategic alliance with the RTD Group would create a robust network spanning the US, Europe, and Africa.

By integrating Liverpool’s resources and RTD’s expertise in youth development, this partnership could produce world-class talent and foster deep community engagement. Mohammed Kudus and Mikkel Damsgaard, both products of RTD’s development system, demonstrate the potential of such collaborative efforts.

Integrating this model with Liverpool’s scouting and development infrastructure could produce the next generation of football stars.

Some of the benefits of this partnership:

  1. Youth Development Synergies: RTD’s academies could serve as feeder programs for Liverpool FC, providing a steady stream of well-rounded, highly skilled young players. This aligns with Liverpool’s focus on developing home-grown talent and could enhance their youth recruitment strategy. Joint youth development programs could combine Liverpool's top-tier facilities and coaching expertise with RTD's holistic development model, creating a powerful network of academies across different continents.
  2. Cultural and Market Expansion: RTD’s presence in Ghana, Denmark, Egypt, and the USA offers Liverpool a unique opportunity to strengthen its brand in these key markets. This partnership could involve joint community and cultural projects, increasing Liverpool’s global footprint and engagement. Leveraging Mohamed Salah as a global ambassador for this partnership could amplify its impact. As a hero in Egypt and an icon at Liverpool, Salah embodies the values of perseverance and success that RTD aims to instill in its students. His involvement could foster deeper connections with Egyptian and African fans, enhancing both Liverpool’s and RTD’s influence.
  3. Shared Expertise and Resources: The collaboration could facilitate shared expertise in coaching, sports science, and player development. Liverpool’s advanced technology and analytics could be integrated into RTD’s training programs, benefiting both organizations. Joint ventures in marketing, sponsorship, and commercial activities could create new revenue streams and increase financial stability for all clubs involved.
  4. Community and Social Responsibility: A partnership with RTD aligns with FSG’s and Liverpool’s values of social responsibility and community engagement. Together, they could launch initiatives aimed at empowering youth and promoting education and equality, reinforcing their commitment to making a positive impact.
  5. Digital Strategy: A digital strategy could be developed to promote the RTD and Liverpool partnership globally. This could include shared digital content of the clubs, and academies.
  6. Commercial Partnerships: For commercial partners, supporting this group offers access to diverse and strategic markets, like the United States, with immense storytelling potential to be explored through audiovisual content. Brands could benefit from associating with the RTD’s positive social impact and Liverpool’s global fanbase, enhancing their visibility and reputation across multiple regions.

RTD and FSG could also consider forming strategic alliances with other prominent clubs, for example from Brazil, Argentina, France, and Portugal, which are rich in footballing talent and tradition. These partnerships would not require the financial and managerial burdens typical of traditional Multi-Club Ownership (MCO) models.

Instead, they could focus on shared values and mutually beneficial objectives, such as talent development and market expansion. This approach would allow for a financially sustainable model that enables rapid scale-up and avoids the pitfalls of owning and managing multiple clubs.

By leveraging such partnerships, RTD-FSG clubs, partners, and academies could achieve broader and faster global reach, enhancing their mission to develop world-class football talent and positively impact communities. This strategy underscores a shift towards a collaborative, value-driven approach in football, where clubs work together to create synergies and shared success.

Other Groups and Clubs That Can Benefit

In my next article, we'll delve into how this innovative approach could be applied to other clubs and groups. We will explore examples of strategies and "perfect match" target partners that can benefit from such collaborations. This will include insights into how to form partnerships that align with each club’s unique identity and market position, ensuring sustainable growth and mutual success.

Some of them are:

Moreover, this approach allows any football club to explore the benefits of being part of a football club network without the need for owners to invest heavily in acquiring and managing multiple clubs across various environments, legal systems, cultures, and geographies. As aforementioned, this promotes a more financially sustainable model that can scale quickly and adapt to changing circumstances, bypassing the common pitfalls of the MCO approach.

In the highly competitive football industry, not innovating is no longer an option. Clubs seeking extraordinary results must move beyond ordinary strategies.

Which club wouldn't want to be part of a network with clubs like AFC Ajax , Atalanta B.C. , Borussia Dortmund , FC Porto , Sporting Clube de Portugal , Sport Lisboa e Benfica , Independiente del Valle , or clubs from Brazil, Argentina, and Colombia?

Out-of-the-box suggestion: Another out-of-the-box partnership could involve forming a strategic alliance with clubs located in popular tourist destinations - such as Inter Miami CF , Real Zaragoza , Venezia FC , AS Monaco , Cercle Brugge KSV , Sporting Clube de Portugal , and Santos Futebol Clube . These clubs offer unique opportunities for creating state-of-the-art audiovisual content with rich storytelling, aimed at captivating global audiences and boosting their commercial revenues by increasing merchandise sales and attracting sponsors eager to associate their brands with high-profile clubs and locations.

Companies in the sectors of tourism, luxury, and lifestyle, like Royal Caribbean Group and Emirates , could find immense value in sponsoring this network, adding the prestige of being linked to the clubs once graced by legends like Pelé and Neymar (Santos FC); Cristiano Ronaldo (Sporting CP); Kylian Mbappé (AS Monaco); and Lionel Messi (Inter Miami).

These partnerships would not only boost commercial appeal but also offer technical and developmental benefits. The clubs could share best practices in player development, marketing, and fan engagement, creating a mutually beneficial ecosystem. Additionally, the association with clubs from such diverse regions and rich footballing histories can enhance the global profile and competitive edge of each partner involved.

Final Thoughts: A New Paradigm for Club Collaboration

As the football industry evolves, the allure of flexible, creative, financially sustainable, socially responsible, and equitable partnerships with shared governance will grow. Clubs seeking to expand their influence and capabilities should consider Strategic Alliances or Joint Ventures, with digital and commercial integration as viable alternatives to traditional MCOs.

By focusing on collaborative ventures that respect each club’s autonomy and culture, strategic vision, creativity in developing synergies, and efficient operational execution, these partnerships can create sustainable value and drive the clubs forward, fostering a new era of innovation, engagement, competitiveness, and growth.

Stay tuned as we unravel how these forward-thinking strategies can redefine the landscape of global football club networks.

Connect with me on LinkedIn for more insights and to explore how strategic partnerships with digital and commercial integration can help to revolutionize the football club networks and unlock new opportunities for growth and engagement.

Get in touch for further discussions or consultations on how innovative strategies, technology, and bespoke projects can elevate your club’s operations, commercial and sporting success.

#Football #MultiClubOwnership #MCO #SportsManagement #FootballManagement #CityFootballGroup #righttodream #SportsMarketing #FootballStrategy #FenwaySportsGroup #SportsBusiness #FootballBusiness #FootballRegulations #UEFA




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