Football fans vs private equity

I’m writing from a taxi in Rome at 1:30am, after getting stuck in a late night traffic jam. AS Roma’s penalty shootout win over Dutch visitors Feyenoord caused total gridlock in the Eternal City.

Don’t let anyone tell you that Uefa’s Europa League doesn’t matter. I’m still buzzing from the sound of the Roma fans jeering as the visiting players lined up to take their spot kicks.

The Champions League might have the prestige and big financial gains, but Uefa’s second club competition has something magical about it — a feeling that just about anyone could win it. And it does bring in some decent money. Roma earned just over €30mn from the competition last year, despite losing in the final to Europa League specialists Sevilla.

Grazie Roma is still ringing in my ears, so up next is the story of how German football fans held back the tide of global capital. We also run through Sir Jim Ratcliffe’s plans to fix Manchester United. Do read on — Samuel Agini, sports business reporter

Final call for the FT Business of Football Summit

We’re into stoppage time for those still keen to join our annual gathering next week. We’ll be talking to top club owners and key decision makers about the future of football — not just as a sport, but as a business and as an asset class in its own right.

As a Scoreboard subscriber, you can register for your complimentary digital pass here to watch the event online on February 28-29, and we still have a handful of in-person passes left if you can join us at The Biltmore Mayfair in London on February 29.

Football fans see off private equity bidders

Germany has long been wary of private equity investors. So it’s little surprise that an effort to invite global capital to buy a piece of the Bundesliga ran into fierce opposition among fans. This week the revolt succeeded.

The Deutsche Fussball Liga had been talking to investors since late last year over a potential €1bn investment in its broadcast and commercial operations. Spanish and French football already have similar deals.

The idea was to use the cash to make the TV product more attractive to a global audience — German football makes far less from international markets than English or Spanish rivals. A new streaming platform was also being discussed to give the Bundesliga an alternative way of reaching customers.

A vote in December by the 36 clubs in the top two divisions over whether to proceed passed by a single vote. Several big firms showed interest, before the league whittled the list down to just two, Blackstone and CVC Capital Partners.

But fans weren’t having it. In recent weeks, protests have disrupted several matches across the country. Some involved sweets, chocolate coins and rubber balls being thrown on to the pitch. The movement stepped up a notch last weekend when remote-controlled cars loaded with smoke flares zipped across the field during a Bundesliga 2 match between Hansa Rostock and Hamburg.

Clubs had been getting cold feet, while the integrity of the original vote has also become a source of controversary. One executive is believed to have voted in favour of the investment plan, despite being instructed to vote it down by his club. Blackstone later pulled out, leaving CVC as the sole bidder.

On Wednesday, the DFL finally threw in the towel. At a vote in Frankfurt, clubs voted unanimously to walk away. The priority for the league is ending the disruption on match day.

This was the third attempt by the DFL to raise capital. It looks likely to be the last. There may be good arguments for bringing in outside expertise and capital to help the league keep up with other European leagues, but the cultural barriers look too high. Germany’s tight regulations on club ownership mean that international investors can only come in with widespread consent.

It is an interesting episode in the financialisation of football. It is a reminder that in Germany, fans still hold sway, clubs must follow their lead. Elsewhere in Europe, few such guardrails exist.

But as discontent grows in the stands — particularly over multiclub ownership — German fans have shown the potency of people power.

Ratcliffe’s vision for a United renaissance

Newly-minted United shareholder Sir Jim Ratcliffe finally broke cover this week to outline his vision for the club after buying a minority stake. In an hour-long meeting with journalists, including Scoreboard, in London he talked through the bidding process that resulted in his $1.65bn investment, his immediate priorities, and his long-term aspirations.

First on the agenda, fix the club’s shoddy recruitment strategy. United have spent big under the Glazers, but expensive signings have often disappointed.

To do that, Ratcliffe wants to bring in top executives, and upgrade the club’s often-criticised culture. New chief executive Omar Berrada was the first in what will be a series of big hires. “We need to populate all the key roles with people who are best in class, 10 out of 10s”, said the chemicals billionaire.

The message was that United’s off-field success as a commercial entity needs to be matched by challenging for trophies. “This is going to be a very sports-led club. It’s all going to be about performance on the pitch.”

But while the bar is high, there is also expectation management. This supertanker is not going to turn around overnight. He wants the club to be back on top within three years. “If we give people false expectations, then they will get disappointed. So I think the key thing is our trajectory, so that people can see that we’re making progress.”

With revenue last year of €742.8mn last year, according to Deloitte, United are still high on football’s rich list. That gives the club a clear advantage over rivals at a time when spending rules begin to bite. Ratcliffe noted that Financial Fair Play regulations had limited the financial muscle of state-back clubs — such as Manchester City and Paris Saint-Germain — by a “considerable margin”.

Where he does favour a helping hand from the government is in rebuilding Old Trafford. He put a £1bn price tag just on upgrading the current stadium, but floated the idea of a far bigger regeneration project akin to the one that revived large parts of east London for the 2012 Olympics.

As we wrote shortly after the deal was sealed on Christmas Eve, Ratcliffe’s record in football is patchy. Ineos bought OGC Nice in France’s Ligue 1 in 2018, but it has taken until the current season to see any pick-up in performances on the pitch. Ratcliffe acknowledged that it had been a steep learning curve, and that Ineos, which has investments in cycling, sailing, and motorsport, had made “a lot of cock ups” and “some really stupid decisions”.

“We have made mistakes in football so I’m really pleased that we made those mistakes before we arrived here in Manchester United. If we hadn’t, this would be a much tougher job for us. Because it is huge and it’s very exposed.”

United fans have good reason to feel excited, relieved and optimistic about the future. But fixing a big club is hard work. Just look at Chelsea, Olympique Lyonnais, and Barcelona. And Ratcliffe will be trying to repair United’s fortunes while still just a minority shareholder. Honeymoons often get curtailed in football.

Highlights

• Kyril Louis-Dreyfus believes youth is the key to taking Sunderland back to the Premier League. The 26-year scion of the wealthy trading dynasty bought the club in 2021. Read our interview with him here.

• Apple took another step into the world of sport with the launch of its own app showing live scores and betting odds.

• English Premier League club Brentford has hired Rothschild to explore a full or partial sale by British owner Matthew Benham.

• FuboTV has filed an antitrust lawsuit against the group of US broadcasters seeking to create their own sports streaming service.

Final whizz-bang

People power was on full display this week as Bodø/Glimt prepared to host Ajax for the return leg of their Europa Conference League tie. Fans of the Norwegian hosts attempted to give their team the advantage by letting off fireworks outside the visitors’ hotel at 2:30am.

But in the end it wasn’t enough — the Dutch team won 2-1, edging their way into the next round. And so Bodø/Glimt’s European campaign fizzled out.