American hunger: Why US investors love investing in Europe

In recent years, soccer in Europe has seen an unprecedented influx of American investors, with clubs across the continent’s top leagues falling under foreign ownership. The attractiveness to these American investors is due to the possibility of large revenue growth coupled with cheap acquisition expenses. This trend is most notable in Italy’s Serie A and England’s Premier League. There, American capital now controls a significant portion of clubs. Despite occasional challenges, the appetite for European soccer in the United States shows no signs of slowing down.

Two main reasons are driving American investment in Europe: the cheap cost of clubs and the unrealized income potential. For those with vast money, European teams provide a cheap entry point. Especially in contrast to the stratospheric pricing of US sports franchises in leagues like the NFL or NBA. For instance, in 2022, Chelsea were sold for $3.1 billion, while Milan changed hands for $1.3 billion. While these are substantial sums, they pale in comparison to the valuations of American franchises. For example, there are the Dallas Cowboys, who Forbes recently valued at over $10 billion.

Moreover, American investors see European soccer as ripe for modernization, particularly through media and entertainment strategies. To these investors, soccer clubs resemble U.S. professional leagues. Thus, commercial exploitation, branding, and evolving marketing tactics can yield enormous profits.

Many American owners have sought to turn soccer clubs into media enterprises by upgrading stadiums and expanding their digital presence. However, while the vision is there, the execution has been stifled by bureaucratic and political obstacles, especially in Italy. Despite this, the long-term prospects of increasing club revenues through broadcast rights, merchandising, and sponsorship deals keep these investments attractive.

North American dominance in England and Italy

American investors now own a significant number of clubs in Europe’s “Big Five” leagues, with the most pronounced concentration in England and Italy. A recent report by Soccer Benchmark highlights that 24 clubs across these leagues are now under U.S. control, including 10 in the Premier League and eight in Serie A. The number of clubs owned by North American stockholders has grown beyond 27 in the United States.

England is home to the Premier League with its enormous international fan base and hefty television contracts. Thus, clubs like Arsenal, Manchester United, Liverpool, and Chelsea have all come under American control. The Premier League is seen as an especially attractive investment due to its financial stability and global reach. Broadcasting deals alone can secure substantial income, providing a steady stream of revenue that is largely unrivaled in other soccer leagues.

In Italy, Serie A has emerged as another hotspot for American investment. Nine clubs, including Milan, Inter, Roma, and Fiorentina, are now owned by North Americans. Italy’s top league, while lagging behind the Premier League in terms of revenue, offers more opportunities for growth. The report suggests that Serie A is particularly attractive to U.S. investors because the league still has significant room for commercial development. Lower acquisition costs coupled with the potential to enhance the league’s global appeal make Serie A a prime target for investors looking to unlock new revenue streams.

What does the future hold for US investment in Europe?

While the potential for profit in European soccer is clear, American investors have encountered challenges in realizing their ambitious plans. The bureaucratic and political complexities of operating in foreign countries have often slowed progress, particularly in stadium development. In Italy, attempts to modernize outdated stadiums and enhance infrastructure have been stymied by government regulations and red tape. These frustrations have led some to question whether the allure of European soccer is worth the hurdles.

Nevertheless, the allure remains strong, as the potential for future growth is too substantial to ignore. U.S. investors have deep connections in media and entertainment, giving them a competitive edge in transforming clubs into profitable enterprises. The globalization of soccer, combined with the sport’s immense popularity, offers a unique opportunity to tap into a vast and passionate fanbase.

Moreover, the comparative affordability of European soccer clubs compared to U.S. franchises continues to make the sport an enticing investment. As valuations in American sports leagues reach unprecedented heights, European soccer remains a relatively affordable option for those looking to break into the sports industry.

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