Why more and more financial investors are pushing into football

They promise investments and success, but primarily want to earn money themselves. Financial investors have recently been pushing into football and are buying up several clubs and holdings around the world. "The business model in this form is fairly new in football," said Christoph Breuer, professor at the Cologne Sports University.

In Germany, Hertha BSC could be the first club where the US company 777 Partners, with founder and main shareholder Josh Wander, enters the Bundesliga by buying Lars Windhorst's shares. The Berlin first division team is to become part of a football empire that is growing around the world. A delegation from the American investment company was in the German capital, before that Hertha President Kay Bernstein had paid a visit to the possible new partner during his vacation in the USA.

"They wanted to know what's going on at Hertha, and we also wanted to know a lot about their business model. It was a very pleasant working relationship," said sporting director Fredi Bobic about getting to know each other, but also emphasized: "Now we're going to take the next step. At the end of the day it has to be clean and there can't be any irritation."

At the same time, the American Eagle Football Holdings LLC, led by investor John Textor, has just joined Olympique Lyon. As the former series champion confirmed, the holding company bought more than three quarters of all club shares worth just over 327 million euros. Eagle Football is also planning a capital increase totaling EUR 86 million. The holding already owns shares in clubs in Great Britain, Belgium, Brazil and the USA.

Clusters of clubs are not new in principle. The drinks manufacturer Red Bull with its clubs around RB Leipzig and the Manchester City owners with more than half a dozen other offshoots such as Yokohama Marinos or FC Girona are pioneers. But 777 Partners and Eagle Football are different.

Red Bull has clubs and produces sporting events "to create an image effect on its cans," explains media scientist Christoph Bertling, who also conducts research at the Cologne Sports University. "In this context, sport is just the communicative marketing department for can sales." The city owners from the United Arab Emirates are more concerned with their own reputation.

With 777 Partners, based in Miami and holdings in Genoa CFC, Vasco da Gama, Standard Liège, Red Star FC Paris, Sevilla FC and Melbourne Victory, it's not about image. Just as little as with the Eagle Football Holding of the majority shareholder John Textor with various large holdings in Crystal Palace, Botafogo FR, RWD Molenbeek and FC Florida - the entry into Sporting Lisbon recently failed.

But what does the business model look like with a collection of teams? "In companies with several clubs, there are three ways to earn money," says sports management specialist Breuer. The simplest is: "You buy at the lowest price possible and sell at a higher price after the value has increased."

It seems unlikely that Windhorst's Tennor Group will succeed with the Hertha shares if the sale to 777 Partners works. But it's not impossible either. Because the investor is on a shopping spree and is not deterred by the 50 1 rule. The rule aims to ensure that the registered parent club retains decision-making power even if it has spun off its professional football division into a corporation.

According to Breuer, a second business model is: "Several clubs can lead to learning effects, make processes more efficient, help with talent scouting and lead to synergies." For Red Bull, for example, there are research results "according to which significantly lower transfer fees were paid for transfers within the group". , explains the Cologne professor. However, what is interesting for City-Group and Red Bull does not seem to fit with 777 Partners and Eagle Holding.

A third variant: "US companies have the business model of creating content in the media sector or ensuring that halls are used." This financial model does not seem to fit football clubs in different countries either. Football has its own laws, even if many successful clubs are run like companies. "The normal business of making profits every year after buying shares can hardly ever be implemented in football," says the sports management expert.

As far as the possible purchase of Hertha by 777 Partners is concerned, the researcher from Cologne is still puzzled. "For me, the clear investment idea is not yet clear, as it is at Red Bull and the City Group," states Breuer.