The dangers of multi-club ownership

Last week, all Premier League clubs voted on whether or not to ban loan deals in January between clubs with the same owner.

This motion required 14 clubs to vote in favour for it to be carried (a two-thirds majority), but only 12 did so, with eight voting against.

The rebellious eight are Newcastle, Manchester City, Chelsea, Everton, Wolves, Nottingham Forest, Sheffield United and Burnley.

This is quite simple to explain given that, of the eight, seven are part of a multi-ownership group, or are soon to be:

Manchester City- CFG own 12 clubs: New York City, Melbourne City, Mumbai City, Montevideo City Torque, Troyes, Girona, Lommel, Sìchuān Jiǔniú, Yokohama F. Marinos, Palermo and Bahia.
Chelsea- BlueCo purchased RC Strasbourg this summer.
Newcastle- PIF bought Al-Hilal, Al-Ittihad, Al-Nassr and Al-Ahli this year.
Nottingham Forest- Evangelos Marinakis owns Olympiacos.
Wolverhampton Wanderers- Fosun International have a ‘strategic partnership’ with Grasshoppers.
Sheffield United- Abdullah bin Musaid Al Saud owns Beerschot, Al-Hilal United, Kerala United and La Berrichonne de Châteauroux.
Everton - prospective new owners 777 partners have a stake in Standard Liège, Genoa, Hertha BSC, Sevilla, Melbourne Victory, Vasco da Gama and Red Star FC.

In relation to the other two clubs, Burnley chairman Alan Pace has previously discussed the possibility of going into multi-club ownership.

Also, given that Sheffield United are owned by Prince Abdullah Bin Mosaad Al Saud, part of the Saudi royal family, it’s no surprise that they sided with Newcastle on this issue.

Amazingly, four other clubs, Arsenal, Brighton, Aston Villa and Crystal Palace are part of multi-club ownership, while Manchester United will join this list, should Sir Jim Ratcliffe’s purchase of 25% of the shares go through.

Brentford owner Matthew Benham was also the majority shareholder of FC Midtjylland up until August.

Over at West Ham, Sparta Prague owner Daniel Křetínský purchased 27% of the shares a couple of years ago.

John W. Henry (Liverpool & Boston Red Sox), Shahid Khan (Fulham & Jacksonville Jaguars) and Bill Foley (Bournemouth & Vegas Golden Knights) own teams in other sports.

Tottenham owners ENIC were really the pioneers in this field, buying shares in Rangers, FC Basel, Slavia Prague, AEK Athens and Vicenza in the ‘90s, although they only own 86.58% of Spurs these days.

This means, amazingly, only Luton chairman David Wilkinson has not or does not currently own shares in second professional sports team, on top of the one in the Premier League.

In summary, 14 of 20 Premier League clubs (70%) currently have at least a part-stake in another club, underlining that this is the way football is going.

So why is everybody doing this? What are the benefits to multi-club ownership?

On the flip side, what are the dangers of this type of ownership model, both to the club’s involved but also to the the wider-game?

Primary examples of multi-club ownership

Before we go any further, it’s worth outlining the biggest and most well-known examples of multi-club ownership.

City Football Group are probably the most famous. As mentioned above, they own or part-own 12 clubs:

Manchester City, New York City, Melbourne City, Mumbai City, Montevideo City Torque, Troyes, Girona, Lommel, Sìchuān Jiǔniú, Yokohama F. Marinos, Palermo and Bahia.

Red Bull are the other one that springs to mind, currently in control of four football teams, on top of their interests in many other sports: RB Leipzig, RB Salzburg, New York Red Bulls and Red Bull Bragantino.

But the are others that are slightly less overt and in-your-face than Red Bull.

777 partners, who are currently attempting to buy Everton, have a stake in Standard Liège, Genoa, Hertha BSC (64.5%), Melbourne Victory (70%), Vasco da Gama (70%) and Red Star FC.

John Textor’s company Eagle Football Holdings Limited purchased 40% of Crystal Palace, while he also owns Olympique Lyonnais, Botafogo, OL Reign and RWD Molenbeek.

Brighton’s Tony Bloom owns Royale Union Saint-Gilloise, although his control is seemingly being diluted, while Todd Boehly took control of RC Strasbourg in June, a fact their supporters are not very pleased about.

Benefits to multi-club ownership

One of the main benefits of multi-club ownership is the ‘strategic partnerships’ it creates.

Through CFG, Manchester City have access to a dozen clubs all around the world, which helps enable a multitude of behind-the-scenes aspects of running a football club.

Scouting is the most obvious one; why have a scouting network be employed by one club when they could be employed by 12?

If Manchester City identify a player who’s good, but not quite good enough to play for the treble-winners, perhaps he could go to Girona instead, with Yangel Herrera a real-world example of this.

Similarly, if there’s an ultra-talented teenager in Montevideo, New York, Mumbai, Yokohama or Melbourne, CFG will know about it, can get him into the system and he can work his way up their ladder of clubs.

Jack Harrison, Daniel Arzani, Angeliño, Aaron Mooy and Taty Castellanos have all played for multiple CFG clubs before being sold on.

For upstart franchise leagues such as MLS, the A-League and Indian Super League, it’s also beneficial to allow multi-club ownership groups in.

First and foremost, the richer the owners the less-likely these clubs are to go bankrupt, which is a major priority for a league of this size, especially when it’s only in its infancy,

For the owners, MLS, A-League and ISL provide security, as you can buy your way in and there’s no risk of relegation, targeting long-term returns on investment as the league grows in value as a collective.

New York Red Bulls, New York City, Colorado Rapids and CF Montréal in America, Melbourne City and Melbourne Victory in Australia and Mumbai City in India all be owned in this way supports this theory.

Issues with being part of a multi-club ownership group

Having said all of that, there are of course draw-backs to being a club that’s part of a multi-club ownership.

Let’s use Eagle Football Holdings Limited, one of the newcomers to this market, as an example.

They own Crystal Palace in the Premier League, one of France’s biggest clubs Lyon, well-supporters if not successful Brazilian side Botafogo and RWD Molenbeek, who were promoted to Belgium’s top-tier last season.

Belgium is a very popular destination for these kind of ownership groups, because the league is a decent if not ultra-high level and it’s much easier to get work permits than in a post-Brexit UK.

So, a pathway is established; a young talented Brazilian can be picked up in Rio de Janeiro by Botafogo, move to Belgium, where he’s able to obtain a work permit, before......... and then what?

Who is at the top of this food-chain? Is it Crystal Palace, who are in the richest league on the planet, or is it Olympique Lyonnais, who are a much bigger club, but in the much smaller pond that is Ligue 1.

Lyon are currently bottom of Ligue 1, in danger of crashing out the top-flight for the first time in 35 years, and the ownership is largely to blame.

During Jean-Michel Aulas’ three-and-a-half decades in charge, Lyon won eight successive Ligue 1 titles and were Champions League regulars, reaching the semi-finals as recently as 2020.

For Aulas, OL was everything, he lived and breathed the club, but now Lyon is run by Textor who’s also ranting about referee after Brasileirão matches and has and interest in Crystal Palace too.

The best multi-club ownership models are ones with obvious pathways such as CFG, where it is clear that Manchester City are at the top of the tree and everyone else knows their place in the hierarchy.

At Red Bull too, Leipzig are at the top, closely followed by Salzburg, with Bragantino and New York below.

However, RBNY epitomise the issues with being a club that’s towards the bottom of a priority list.

They continue to be mediocre in MLS, last winning silverware in 2018, while attendances in New Jersey are stagnant and low, due to the fan base - in one of America’s biggest markets - being disengaged, merely reflecting the mood they see from those running the club.

The zeitgeist is, if the people running this club aren’t that interest why should I be? There’s literally plenty of other things to do in New York!

This is exactly why Strasbourg supporters are protesting against Todd Boehly’s ownership, with banners that read ‘non à la multipropriété’ as well as ones telling Boehly he’ll ‘never be welcome’.

Strasbourg are a big club in France, top-flight regulars with a good fanbase in a large city, who do not want to lose their identity, history and traditions just to become Chelsea’s feeder club.

The last one to mention is 777 Partners and, a word of warning Everton supporters, if you think Farhad Moshiri is a bad owner... well let’s just leave it at that.

For legal reasons, we can’t say too much about this company, their practices or CEO Josh Wander’s background, so let us just focus on how their teams have done post-takeover.

Standard Liège: finished seventh. Red Star FC: stuck in the French third-tier. Melbourne Victory: finished second-bottom. Vasco da Gama currently 15th. Hertha BSC: relegated from the Bundesliga.

The only success they’ve enjoyed is Genoa being promoted to Serie A, but this only came after they were surprisingly relegated the season before.

Where is the hierarchy in this ownership group? Who is in control of what? Where do the priorities lie?

All we can say for certain, if the takeover does go through, good luck Evertonians!

Implications for the wider-game?

The whole reason for the Premier League vote mentioned at the very top is essentially the fact some gossipy tabloids were suggesting that Newcastle may sign Rúben Neves in January to cover for Sandro Tonali during his ban.

Well, now this is completely possible, given that PIF both own Newcastle and essentially control the Saudi Pro League.

Clubs can only have a maximum of five loanees, but Eddie Howe can take his pick from Neves, Riyāḍ Maḥrez, Roberto Firmino, Jordan Henderson, Karim Benzema, Sergej Milinković-Savić, Kalidou Koulibaly, Aleksandar Mitrović, N’Golo Kanté, Sadio Mané, Aymeric Laporte or even Cristiano Ronaldo and many more.

Newcastle are enduring a major injury crisis right now, so an influx of players, who’s wages are covered elsewhere, would be really helpful.

There’s no FFP in the Saudi league and there’s nothing UEFA can do.

This is all hypothetical of course, so do you want a real life example that has actually happened?

Ernest Nuamah is a 20-year-old Ghanian winger who shone at Nordsjælland last season.

He became the club’s record-sale in August, bought by RWD Molenbeek for €25 million, an amount of cash they definitely don’t have as a newly-promoted club.

Before ever setting foot in Belgium, he was loaned to Olympique Lyonnais, also owned by John Textor, who have an option to buy for €25 million..... what a coincidence!

At last April’s UEFA Congress in Lisbon, president Aleksander Čeferin was asked about multi-club ownership, with most in attendance expecting him to say it’s bad, we’re exploring what to do about it etc.

Instead, he said that UEFA ‘may need to reconsider the current regulatory framework and have strict rules in place’, which could have huge implications, but pandoras box is already wide open.

In 2018, Leipzig and Salzburg were drawn against each-other in the Europa League, with this only allowed after the German outfit changed their name to RasenBallsport as oppose to Red Bull, for what that’s worth.

Earlier this year, Aston Villa’s ownership group V Sports had to dilute their shareholding in Vitória de Guimarães to 29% to allow both to compete in the Europa Conference League.

A similar thing happened with Tony Bloom after both Brighton and Royale Union Saint-Gilloise qualified for the Europa League.

But just because an individual doesn’t own the majority of a club doesn’t mean they don’t have control, a reality Manchester United could be faced with.

Sir Jim Ratcliffe is set to own 25% of Man United, but how does that affect his 100% ownership of Lausanne-Sport in Switzerland or OGC Nice who are currently second in Ligue 1, on course for the Champions League?

Erik ten Hag’s team are in desperate need of a centre-back, so will Jean-Clair Todibo appear at Old Trafford in a cut-price January deal?

Multi-club ownership poses so many issues in terms of sporting integrity, the transfer market and just general competitiveness across the board, but this is the way modern football is going, so it appears the horse has already bolted and there’s very little that can be done.