BarcelonaSpanish football is fashionable among investors. 21 of the 41 clubs that will be part of the First and Second Divisions in the 2022-23 academic year (Villa-real has its subsidiary in the Second Division), have changed hands since 2014. That year, the League assembly approved a strict economic control regulations that represented a real turning point: in order to reduce the debts that led many entities to the disappearance or bankruptcy, the clubs saw their investment in wages conditioned on the income generated.
The measure had a very positive effect in that it helped clean up the accounts of some clubs that were heavily in debt until then. David Díaz, partner of the prestigious Baker McKenzie law firm, which advises investment funds on the purchase of football clubs, admits to the ARA that “the security and financial stability” brought by the economic control of the League in recent years has contributed significantly to increasing the interest on the part of large business groups towards football clubs of the League. The resources advanced by CVC, which will make it possible to create and renew infrastructure, professionalize the management of the clubs and develop other improvements, have also helped to see some entities with better eyes.
“Investments in clubs by companies that have not traditionally been linked to football are becoming more and more common. And this has a certain appeal effect”, continues Díaz, who predicts that in the coming years the number of investors interested in buying Spanish clubs will grow. This upward trend “will make the general level of the League rise, and there will be less differences and more competition”.
Fourteen foreign owners
A few days before the start of a new school year, several models of ownership coexist in the First and Second Divisions: clubs that belong to their partners (Barça, Real Madrid, Athletic Club and Osasuna); joint-stock sports companies with a fragmented shareholding in which no one owns more than 27% of the shareholding pie and, finally, a block of 28 clubs run by a company that holds half or almost all of the ownership. Half of these, 14, are foreigners (seven in each category). New ones could soon be added: the Japanese investment fund Septeni Holdings is negotiating the purchase of Burgos, while Grupo Pachuca, a Mexican conglomerate, wants to do the same with a Málaga still dominated by Abdullah al-Thani.
The investors of Spanish football
first division
Behind First and Second teams are businessmen from Saudi Arabia, the United Arab Emirates, Qatar, Brazil, Argentina or Singapore. The only nationalities repeated are the United States (three), Mexico and China (two). The American giant is precisely where most of the inquiries Baker McKenzie receives to acquire new clubs are coming from. From this same country, in fact, an offer to buy Espanyol arrived a few months ago, which Chen Yansheng rejected considering it too low.
The price factor, which keeps most companies away from the offices of First Division clubs, is at the same time an element that makes Second Division clubs attractive. “The amount to buy them is lower, which widens the spectrum of potential investors who find it much easier to revalue a Second Division team that they can then sell for more money,” comments the sports law expert.
Leganés is a good example: Madrid businessman Felipe Moreno bought 51% of it at the end of 2008 for 500,000 euros. At the time, Leganés was playing in Segona B. Fourteen years later, the American investment group Blue Crown Sports bought it for 39 million. Another million, 40, will be paid by Orlegi Sports, a conglomerate that already dominates two Mexican clubs (Santos Laguna and Atlas) to gain control of Sporting de Gijón. Both are clubs that, due to budget and recent history, choose to be strong candidates for promotion. This is not a futile aspect, since going up to Primera can mean multiplying the income figure for television rights sevenfold.
Four operations this 2022
The phenomenon of the great owners of Spanish football is nothing new, since Atlético has been in the hands of the Gil family, and Villarreal, de la Roig, since the 90s. However, the great explosion has occurred in recent years. In fact, only five of the 28 big owners that Spanish football currently has acquired the club they manage before 2010. The rest, 23, arrived after that time. The last four operations, all in Segona, have arrived this year: Oviedo, Sporting, Leganés and Zaragoza, four historical ones that have changed hands and are now under American control.
The price you pay for a club can vary based on many factors. One is the era: they paid triple for Leganés (39 million) what it cost Atlético de Madrid (11.4) three decades ago now, in 1992. The category also influences: Fernando Roig acquired Villarreal for 430,000 euros in 1997, when he was in Segona. Two decades later, in 2018, Gerard Piqué paid a little more (600,000 euros) for Andorra, which in a few years has gone from Third to Second. The city where it is located, the social mass, the heritage (many clubs do not have their own field) or the debt that each club incurs also influence the price of each entity. Martín Presa, for example, took control of Rayo Vallecano in 2011 for around 750,000 euros, while Manuel Vizcaíno did the same with Cadiz, in 2013, for around 450,000 euros. Both clubs were going through financial difficulties.
The price paid by investors, however, ends up being much higher than what they invest to gain control of the majority shareholding. In most sales processes, in fact, the buyers usually assume part or all of the debt, as well as the commitment to develop certain capital increases that allow the club to operate and that it can fight for a higher goal, be it a promotion or a European classification.
The owners of Espanyol and Girona know this well. Chen Yansheng paid nearly 50 million to take control of Espanyol in 2016, but since then has injected nearly 100 million more in various capital increases to gradually reduce a historical net debt that is already almost liquidated. A year later, in 2017, Girona changed hands for no less than 10 million. Last year, the City Football Group, Pere Guardiola and Marcelo Claure contributed another 20 million in a capital increase that has meant a financial push to return to Primera.
