Investing in Sport
As I sit here writing this piece, I am wrestling with the physical, mental and financial ramifications of my recent trip to Berlin to watch England lose the Euros Final to a deserving winner in Spain. Although the result was genuinely devastating, when I am asked (as I have been many times since) whether it was worth it, the answer is always an unequivocal "Yes". This is because there is no 'experience' which comes close, at least for me, and many others, to generating such a wealth and spectrum of emotion.
The prospect of watching your club or country in a final seems to render the concept of budgeting obsolete. A similar rationale underpins much of the ownership in this arena: owning a football, baseball, basketball team (etc…) has for a long time been the playground of the obscenely wealthy, splashing out on trophy assets to earn glory and the adulation of an adoring fan base, or fulfilling a childhood dream.
Of course, success on the pitch has brought money, and certain European football clubs have become global brands by that virtue. The advent of televisual media introduced additional revenue streams and as technology has advanced, so too has the prospect of reaching a global audience. Large tech streaming platforms, all eager to muscle into the mix, spending more (and for longer) on fixed contracts with sport leagues has further broadened their audience. Private equity sponsors have taken note and have become increasingly active and willing owners. Profit now looks to be overtaking passion as the prevailing reason for owning a sports team. Yet you need only take a look at Todd Boehly since his purchase of Chelsea FC in mid-2022, contorted in the director's box as he cops yet more abuse from the Chelsea faithful, to understand the potential pitfalls of ownership in European football.
Which leads me to the central premise underpinning this piece. Although European football is arguably more competitive (and entertaining), it is commercially less attractive for reasons related to the structuring of European vs North American leagues.
