The rise in football teams searching for new capital formations is spurring a frenzy of overseas buyers seeking possession of Europe’s top clubs.

The rising value of football media rights and relatively attractive valuations of European teams compared to US counterparts has helped 2022 kick on to become a record year for activity, per Dealogic.

The total value of deals struck for European football teams and leagues in 2022 was the largest on record at EUR 6.1bn across 31 deals, the highest volume since 2014 (35), and against a backdrop where deal value in EMEA was down by a third year-on-year.

US buyers have dominated most of the dealmaking in 2022, the largest being the sale of West London team Chelsea FC by Roman Abramovich, which was sold to a consortium led by financier Todd Boehly for EUR 2.9bn following a hard-fought auction process. Similar record-breaking deals followed elsewhere in Europe, including the EUR 1.2bn sale of defending Italian champions AC Milan to US investment fund RedBird Capital Partners, while French Ligue 1 team Olympique Lyonnais secured investment from the US-based Eagle Football Holdings for EUR 864m.

Transfer window

As it is for players in the January transfer window, English Premier League clubs are also bracing for a change in ownership. The October 2021 takeover of Newcastle United by a consortium majority owned by Saudi Arabia’s sovereign wealth fund, providing the North-East club with a near-unlimited set of funds, has increased the intensity at the top of the Premier League, sparking other clubs to seek new investment.

Middle Eastern investors are also eyeing the upcoming sales of Europe’s biggest clubs. Liverpool FC, which has been put up for sale by Fenway Sports Group, is said to have drawn interest from consortiums from Qatar and Saudi Arabia.

Manchester United has also been put up for sale and is also reportedly drawing interest from buyers in Dubai, Qatar, and Saudi Arabia, including from sovereign investors. The club’s owners, the Glazer family, are seeking a possible valuation of up to GBP 7bn (EUR 7.9bn), a greater value than all the deals completed in 2022. The pool of buyers is likely exceptionally narrow, even if the price tag comes below the expected valuation.

Qatar and Saudi Arabia have invested in football as part of an asset recycling initiative of diversifying away from traditional oil & gas and a bid for Manchester United could hold a similar appeal for other Middle Eastern investors or a non-traditional investor in the sector like Meta [NASDAQ:META] and Amazon [NASDAQ:AMZN], which have also been reported to have signalled interest in the club.

Other European teams has also seen appetite from overseas buyers including La Liga’s Atletico de Madrid and top flight Italian side
Napoli, who have both captured the eye of US buyers.

With the World Cup in Qatar still fresh in the minds, clubs may be tempted to weigh selling stakes in an effort to boost revenue streams, many of which have yet to return to pre-COVID levels. In Italy, Juventus is facing serious charges over financial irregularities, while Inter Milan has been beset by revenue and ownership problems over the past two seasons. In Spain, perennial champions Barcelona has undertaken extensive asset sales to try and pare back its soaring debt mountain.

League of their own

Like at club level, Europe’s top leagues are continuing to seek investment as buyers are drawn by lucrative media rights. France’s football governing body Ligue de Football Professionnel (LFP) sold a 13% stake in its commercial subsidiary to CVC, valuing the entire unit at EUR 11.5bn, making it one of the largest European football-related deals last year. Italy’s Serie A also reportedly received a EUR 2bn offer from Searchlight Capital for a stake in its media company following prolonged attempts to sell a stake in the media-co over several years.

Eyes will be on whether Germany’s football body can broker a stoppage time deal to find an investor for the Bundesliga's media rights business after plans to sell a EUR 3.6bn stake in the business were halted at the end of last year following a lack of consensus among the member clubs.

But with the race for the Premier League title intensifying, the increasing competitiveness will only pep up interest from the number of buyers gunning to invest in Europe’s best teams and leagues.