Goldman, JPMorgan lead football foray

Wall Street banks are making huge profits from football deals that are shaking up the world’s most popular sport. European football has become a lucrative source of revenue for top US banks like Goldman Sachs and JPMorgan Chase. With the sale of Manchester United, English Premier League giant, or a new stadium for FC Barcelona in Spain, US banks are first in line.

In earlier years, only a handful of boutiques helped clubs go public, but things began to change with the takeovers of Chelsea FC by Russian oligarch Roman Abramovich and Manchester United by the American Glazer family. Sheikh Jassim bin Hamad bin Jaber Al Thani, chairman of Qatar Islamic Bank, is working with Bank of America, while British billionaire Jim Ratcliffe is receiving advice from Goldman Sachs and JPMorgan for a rival bid. In the absence of dedicated sports advisory desks, US banks have been pulling from their teams of technology, media, and telecoms bankers to work on football mandates.

Manchester United’s sale may draw other wealthy bidders and consortiums, meaning there is plenty of potential work for investment banks. English club AFC Bournemouth appointed the Los Angeles-based boutique Montminy & Co for its £120 million sale to American Bill Foley last year. Montminy was able to win the Bournemouth mandate thanks to its work advising smaller football clubs in the years before its larger rivals appeared on the scene.

Despite the huge global appeal, football can be a risky business for those putting up the money. Outside investors have struggled before, and even top clubs in Europe have suffered financial mismanagement. Nonetheless, the size of football deals in the pipeline points to another strong year for dealmaking in professional sports. M&A values in the sector hit a record US$18.6 billion in 2022, according to data compiled by Bloomberg, comfortably surpassing the previous all-time high set the year before.

Outside the cash-rich Premier League, banks have been picking up work helping Europe’s other main football divisions shore up their finances. Leagues in countries like Italy, Spain and France were particularly badly hit financially by the impact of the Covid-19 crisis, and they have been seeking to raise money from outside investors, including private equity firms, through deals often tied to future media rights.