Patrick M. Kühne
Published: 2024-05-10
Total Pages: 124
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Master's Thesis from the year 2023 in the subject Business economics - Investment and Finance, grade: 1,3, Frankfurt School of Finance & Management (Finance), language: English, abstract: The landscape of European football has undergone a significant transformation in recent years, marked by a surge in interest from high-net-worth individuals and private equity firms. This interest stems from the unique blend of competitiveness, community loyalty, and lucrative revenue streams that characterize football clubs across Europe's top leagues, including the Premier League, Bundesliga, Serie A, La Liga, and Ligue 1. Private equity investments in European football clubs have become increasingly prevalent, driven by a variety of factors. One key driver is the escalating costs associated with acquiring top-tier players, which has led clubs to seek external investment to remain competitive. Additionally, football clubs represent an attractive asset class for private equity firms due to their low correlation with traditional economic sectors, offering diversification benefits to investment portfolios. Despite the inherent risks and challenges associated with investing in European football, such as resistance to change from passionate fan bases and regulatory oversight from governing bodies like UEFA, interest from private equity firms continues to grow. This research aims to delve into the motivations behind this trend and assess the potential for financial returns in the European football industry. The case study of Associazione Calcio (AC) Milan's acquisition by RedBird Capital Partners serves as a focal point for analyzing the dynamics of private equity investments in European football. By examining the historical financial performance of AC Milan, evaluating the strategic rationale behind the acquisition, and conducting a thorough valuation analysis, this study seeks to provide insights into the profitability and viability of investing in football clubs. Through a combination of literature review, empirical analysis, and real-world case studies, this research aims to address the following questions: What are the driving forces behind the increasing interest of private equity firms in European football clubs? Can investing in football clubs yield profitable returns, considering the inherent risks and regulatory constraints? What strategies and tactics do private equity firms employ to generate value from their investments in the football industry?