“For Americans, French clubs are undervalued” / France / Business / SOFOOT.com

OL, Red Star, Valenciennes, Nancy, Saint-Etienne. There are countless French clubs that have just joined a multi-club model or should do so via new investors, often Americans, already involved in foreign clubs and in particular English. Worrying phenomenon or financial windfall for French football? Explanations with Tim Keech, co-founder of MRKT Insights, a football consulting firm that has participated in the takeover by American investors of European clubs.

Why has the multi-club system become so popular in recent years?
It is above all linked to the fact that the English clubs which do not have the resources of the Big 6 are at an impasse. Their best young people leave very early for Manchester City, Chelsea or Liverpool, are then loaned and for the most part never go to play pro in these big clubs. West Ham or Everton must then buy these players, their players, at a high price, at 15-20 million euros. Whereas if they had a partner club in France or Portugal, they could lend their youngsters there, with a promise to give them playing time in a foreign championship and thus keep them. Having a satellite club is a way of creating a pool of players. Brexit has also accelerated interest in this model, because with the new points-based work permit, it is very difficult for English clubs, especially in the Championship, to sign a European player over 21 years old. The multi-club system is the ideal response to this. You can sign a player with a partner club in the European Union, while he gains experience, and therefore points, before signing him in England without spending too much and without fearing that his work permit will be refused.

“With a good shareholder, you can make Saint-Étienne a club that regularly plays in the Champions League, where in England, this is only possible by buying very expensive clubs that are already playing in European places. »

Are French clubs therefore destined to become satellite clubs of the Premier League and the Championship?
What I can tell you is that there are many discussions in this sense and that currently all English clubs are looking at this model and are interested in France, Portugal and Belgium. This multi-club system already exists a little bit in France: Metz with Seraing in Belgium and with the Génération Foot academy, Marseille with Diambars in Senegal. Except that with the new models that are being put in place, French clubs will no longer necessarily be those at the top of the ladder. However, not all multi-club strategies are the same. There is that of the City Group with a dominant club and satellite clubs, that of Red Bull, with clubs which share all their information of scouting, exchange players and staff, and have the same training methods and the same style of play. And then you have a model that looks more like John Textor’s. He invests in stable clubs with a good economic model, like in Lyon, without necessarily being in the majority, because he believes that football is an undervalued industry and that clubs can gain in value.

Why is France so attractive to investors, especially Americans, who are trying to build a multi-club system?
Firstly because the cost of buying clubs is quite low, around 15-20 million euros for a Ligue 2 club. And with a good shareholder, you can make Saint-Étienne a club that regularly plays the Ligue champions, where in England, this is only possible by buying very expensive clubs which are already playing for European places. Then because France has an incredible reserve of talent and an efficient training system. Look at Toulouse, in which Red Bird has invested. In two years, they have almost paid off the cost of buying the club by selling players. In France, the U16, U17 or U19 internationals are spread over all the Ligue 1 and Ligue 2 clubs, whereas in England they almost all belong to five or six clubs. France also has a unique connection with young African talent, as does Portugal with South America. Finally, Americans look at French clubs and think that they are undervalued and could easily make a lot more profit.

“The Americans believe that European football does not generate enough profit in relation to its media exposure. There is no other industry where you can have 20 pages about your business every day in the local newspapers. »

What makes American investors think there is money to be made in French football?
In general, they believe that European football does not generate enough profit in relation to its media exposure. There is no other industry where you can have twenty pages about your business every day in the local newspapers. Whether it’s marketing, partnerships, naming and use of stadiums, jersey sales, branding of the club, everything could be much better exploited financially according to them. And once several clubs are acquired and developed, it is the TV rights that may increase. All this while having fans, who are also customers, who we are sure will remain loyal from 7 to 77 years old.

Could the resurgence of violence in stadiums and threats against leaders put off some American investors?
You might think so, but investors tell themselves that by respecting the culture of the club and being intelligent in their approach to supporters, they minimize this risk. Above all, from the somewhat cynical point of view of the investor, seeing such passion, such an affect even for the club, makes these fans very loyal customers and it is therefore something that can be positive from a point from an economic point of view if we do not alienate them.

How to explain the persistent rumors of sales for certain clubs, Saint-Étienne, Nantes, Marseille without there being a sale in the end?
You should know that all the clubs in the world have a ten-page investment file which explains why this club should be bought and what the cost would be. And many intermediaries use it to find a buyer hoping to take 5% commission if the sale is made, while they have no mandate. I know that for Saint-Étienne, there were at least twenty sales proposals through intermediaries who promised the potential buyer that they were about to have a mandate. Except that the buyers were only offering perhaps 50% of the value of the club and the current managers were not even aware that someone was trying to sell their club behind their backs.

Interview by Gaétan Mathieu

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