Multi-club ownership groups enjoy a number of advantages over single club structures.
Some examples include:
- Recruiting high potential players earlier in their careers rather than having to wait for them to reach the club’s level.
- The ability to control the development of these players, and capture value increases, through intra-network trading.
- The ability to trade players across borders using work permit and compensation rules to their advantage.
- Running leaner and efficiently planned squads with fewer unused players.
- Implementing a group wide playing and coaching philosophy so that players become accustomed to the group style and can transfer between teams with a greater success rate.
We now work with a number of investors looking at creating or expanding networks, finding the right structure for their budget and ambition.
But what if you can get most of the advantages of a multi-club model without the capital expenditure, and risk, of buying other clubs?
Formal vs Informal networks
As our network of clients has grown so has the number of simple conversations on our work Slack channel along the lines of:
“We need a box to box midfielder for X”
“Club Y has Player A who probably won’t play much, why don’t you look at him?”
If the player has the right profile then we present the idea to both clients and if both are happy we can introduce the representatives of the clubs to discuss it further.
As we work with both clubs we are massively incentivised to find transfers and loans that work for both parties.
If we are constantly recommending bad options then clubs rightly won’t want to work with us anymore.
On the other hand if we are able to find appropriate destinations for fringe players that are beneficial for the buying club, the selling club, and the player, then everyone is happy.
Given the relatively high levels of player wages it is often the case that a single transfer or loan every few seasons will cover the cost of our fees for that entire time period.
And as our clients do more successful business together the relationships strengthen. If Club X knows that Club Y will look after their players and add value to them (as a playing asset or to increase resale value) then they’ll become the first phone call during the next window.
In time the MRKT Insights customer base becomes an informal network (no shared ownership of clubs) with most of the advantages of a formal shared ownership structure.
Let’s look back at the advantages we identified for a club network:
Recruiting high potential players earlier in their careers rather than having to wait for them to reach the club’s level.
Take a Premier League or Championship club. They see a non-league player they love but realistically they won’t be at their level without 18 months of development. If they sign them instantly they stop playing first team football which negatively impacts their development.
As a standalone club you can obviously loan the player out in the traditional manner. However you are on a third party to develop the player.
In a formal multi-club network you sign the player and send him to the most appropriate club for his developmental level.
In an informal network you will have access to clubs at multiple levels and will know that any club borrowing the player will be doing so after intensive scouting and squad planning.
The ability to control the development of these players, and capture value increases, through intra-network trading.
The biggest advantage of a formal multi-club network compared to informal arrangement is control. The incentive for the “junior partner” of a formal network club is to serve the senior partner by playing high potential young players and making them better.
This is not the case for an informal partner whose focus is always on their club winning games.
However, by partnering clubs who share views on how football should be played, and the roles of players within systems, it should be possible to align incentives. We want players moving to clubs where they are wanted and where the intention is that they will play.
As we work with both parties we can maximise the chances of that happening. We know the precise requirements of the borrowing/buying club and simply won’t recommend they sign a player who would be a waste of money.
A by-product of the player getting regular football in a well thought out loan is that they should increase in value. Of the 5 Premier League – Championship loans our client clubs have taken, all of the players have returned to play at Premier League level, and two have been sold for a combined £45m.
Good loans add value and the likelihood of a loan working is maximised when the partners share an interest in the loan working.
The ability to trade players across borders using work permit and compensation rules to their advantage.
Our multinational client base does mean we can potentially offer solutions for clients looking to bring players to the UK who do not yet meet the requirements for a GBE work permit.
A player can be signed by a club before they qualify for a permit, with a well chosen loan in the right territory a player can qualify for a permit in under a year.
Ultimately this is one area where an investment into a second club may be advantageous for a Premier League club owner. Again this is an area where we can help. Many clubs around Europe are seeking investment. British clubs can comply with the GBE requirements and open the whole of the world for scouting and recruitment with the right partnerships for a fraction of the cost of waiting until players qualify through the standard system.
Running leaner and efficiently planned squads with fewer unused players.
A perfectly planned club network over 3 clubs would operate with around 75 senior professionals playing across their clubs with every player at the correct club for their level and able to get minutes on the pitch over the course of the season.
This is actually harder than it sounds to do, players are human with real lives and opinions on where they want to live and work.
But it is true that formal networks have big advantages, they can find in house solutions.
Where informal networks can work better though is finding solutions for the unwanted players.
We have talked a lot about aligning players by finding similar playing styles between clubs. However, the nature of football is that most clubs will have players under contract they simply cannot see ever playing for them. The diversity of our network, both geographically and in terms of playing styles means we can usually find someone, somewhere who would be a good match. Whether the move happens or not is up to the player and clubs but we have had some good moves where players have gone from non-playing reserves to first team regulars, often with resale clauses that give the selling club an incentive to find the right move for the player.
Implementing a group wide playing and coaching philosophy so that players become accustomed to the group style and can transfer between teams with a greater success rate.
As previously mentioned we cannot dictate how any other club within the network plays. What we can do is introduce people with the same views on football and appreciation of how players fit into systems.
Whether this means you want an aggressive mobile target man, or a skillful playmaker there will usually be somebody within the network, coaching or recruiting at a different level, who shares those views.
This means we know the players others will like, we can make introductions and secure mutually beneficial deals.
The club staff always make the deals and final decisions.
We do not profit from these introductions or deals, our incentive is simply to keep working with the clubs and offering a service that they value.