Yahoo Finance Football’s MCO rules ‘beneficial’ to likes of Manchester City and ‘need change’
Football should change its rules on multi-club ownership, which currently gives the likes of Manchester City owner City Football Group and Red Bull an advantage, according to analysts.
The proportion of clubs in Europe’s top five leagues that are part of MCO groups has grown to 41.7 per cent this season, up from 36.7 per cent last year, according to research published today by PitchBook Data.
That trend is being driven mostly by US investors – 60 per cent of clubs in MCO structures have some American ownership – seeking synergies in brand building, commercial dealmaking, player and staff trading and balance sheet management.
Despite rules at world, European and domestic level inhibiting some inherent advantages, “we still consider the current environment to be non-restrictive and beneficial to MCOs”, the PitchBook analyst note says.
European chiefs Uefa has pledged to review its rules on multi-club networks, while Premier League clubs are considering whether to outlaw in-bound loans from related teams in January – a move perceived by some as targeting Saudi-owned Newcastle United.
“We believe a new era of increased dealmaking within the sport of football will be centralised around the MCO structure and the flow of private capital from new investors – which would have previously not considered football as an investment,” the note adds.
“Regulators will have a vital role to play in dictating how these MCO structures evolve, and we believe the current framework needs further adjustments to reflect the rise of private capital flowing into MCOs.
“Football teams are increasingly becoming key assets of investment portfolios and are moving away from being owned by high-net-worth individuals with a desire to own their childhood team.”
City Football Group is football’s most prominent multi-club network, including European champions Manchester City, Spanish league leaders Girona and 11 more clubs worldwide.
Red Bull pioneered MCO with Salzburg and Leipzig and now has stakes in six teams, including in North and Sputh America.
Everton are poised to become the eighth team in the portfolio of US private equity fund 777 Partners, pending approval of a £550m takeover.
