Multi-ownership is a business model that has come to prominence in the sports market, especially what concerns football clubs. This new model is characterized by the fact that a single person (natural or legal) or economic group holds shares in more than one professional football club. This new format offers investors the opportunity to acquire a share in several clubs (majority or minority), making football a truly entrepreneurial business, like many others.
The football industry is one of the most lucrative sectors in the world, turning over millions of euros every year. With passionate fans supporting their beloved clubs, football teams arebecoming true icons, not only from a sports point of view, but also economically and socially, increasingly interconnected and linked to other areas such as fashion (e.g. partnership between AC Milan and Off-White) or entertainment (various series on different platforms about the daily lives of clubs).
In this context, and quite naturally, multi-ownership of football clubs is on the rise, as an innovative strategy to attract new investors and raise funds for team development. This strategy allows for the participation of several owners, who contribute mainly, but not limited to, with financial resources and “unexpected” partnerships.
Multi-ownership is a complex concept involving the division of the ownership of a company – as is the case in Portugal with Public Limited Liability Companies (in portuguese“Sociedades Anónimas Desportivas”), commonly known as “SAD” – between several natural or legal persons or, in most cases, by just one majority shareholder, with the remaining percentage going to the founding Club itself, as required by law .
It is, however, important to emphasize that the multi-ownership of football clubs presents significant legal challenges as laws vary from country to country and European/global regulations seek, in certain circumstances, to restrict the possibility of multiple owners in a club or the same owner in multiple clubs. In addition, the relationship between investors and the club must be regulated clearly and precisely to avoid conflicts of interest.
The successful implementation of multi-ownership of football clubs requires a perfectly thought-out strategy.
In 2022 there were already 68 cases of club multi-ownership. For the most part, there are only two clubs belonging to the same owner. Nevertheless, by way of example, the City Group already has fourteen clubs under its umbrella (Manchester City, Girona, Lommel, Melbourne City, Montevideo City Torque, Mumbai City, New York City, Troyes, Palermo, Bolívar, Yokohama Marinos, Sichuan Jiuniu FC, Bahia and, most recently, Basaksehir), spread across different parts of the globe.
A multi-ownership represents a huge challenge for the bodies that oversee football. Both FIFA and UEFA have strict rules relating to the ownership and control of football clubs.
Firstly, for these entities, it is important to analyze the alleged violations of Financial Fair Play, which aims to guarantee the financial sustainability of clubs. The fact that one person is controlling several clubs can utilize this possibility so that this requirement is always met, allowing business to be done – without restrictions – between their clubs. Secondly, the very natural competitiveness of the sport can be jeopardized, since these teams will ultimately have a common goal, which may be distinct from the general principles of sport and football.
A practical and well-researched example of this is the Red Bull case. The relationship between RB Leipzig (Germany) and RB Salzburg (Austria) is quite complex. Although both clubs are financially supported by the world-famous energy drinks company and have a similar business model, they are two entirely separate entities.
The relationship between the two clubs is a sensitive topic, raising questions about the control and influence of the same group in two different clubs competing in national and international competitions. Particularly concerning international competitions, FIFA and UEFA have always raised some concerns about whether both clubs could take part in the same competition and possibly face each other.
UEFA, after a long and in-depth investigation, decided that RB Leipzig (Germany) and RB Salzburg (Austria) are legally separate and distinct entities, and can therefore compete in domestic and international competitions simultaneously without violating UEFA rules, namely Article 5 of the several UEFA’s Competition Regulations (Integrity of the competition).
UEFA took the view that no individual or entity had a decisive influence over more than one of these clubs. Although this connection continues to generate controversy and debate about the ethics of the ownership and financing model of a single entity controlling several clubs in different competitions, it was clarified that on one hand Red Bullowned 49 % of RB Leipzig‘s shares, but on the other hand, Red Bull was only the main sponsor of RB Salzburg.
As with everything controversial and debatable, some people value the competitiveness and success brought about by Red Bull’s financial influence, while others believe that this distorts fairness and sporting justice, jeopardizing the basic principles of sport.
Notwithstanding the above, during the investigation, UEFA imposed several changes in their respective structures, for example, (i) RB Salzburg can only be called “Salzburg”, while RB Leipzig can only be called “Leipzig”; (ii) RB Salzburg had to change its symbol, and instead of having Red Bull’s logo, the Austrian team’s players have a bull with a football on their shirts.; (iii) UEFA also forced the stadiums to be renamed, with RB Leipzig playing at the “RB Arena” and RB Salzburg at the “Stadion Salzburg“.
Multi-ownership is a highly complex model with restrictions from national federations and the bodies that oversee football – especially at European and world levels – therefore, scrupulous compliance with the laws and sporting regulations in force is required. An efficient and detailed strategy is crucial to the success of this form of ownership. Only in this way were the two clubs identified above able to take part in the biggest football competition in Europe, and perhaps the world.
Multi-ownership of clubs can be beneficial for the development of football, provided it is done ethically and transparently, to make the sport grow in a sustainable and balanced way. However, to achieve this, an efficient and conscientious corporate governance model is required, as the line between what is lawful and what is unlawful is very thin.
por Ricardo Cardoso e Carlos Ferreira Vaz, Área de Prática – Desporto, Moda e Entretenimento
