The Serie A, B and C teams are all at stake while the investment capital companies join the “Rush Mad” to buy a declining number of assets.
In March, interazial Italian football clubs Milano (Inter Milan) and Associazione Calcio Milan (AC Milan) made a daring game: buy the legendary Stadio Meazza and its surroundings, a real estate offer that should conclude in July.
After sharing the emblematic San Siro since 1947, the two rivals have joined forces to build a new elegant and sustainable stadium that could redefine the Milan football scene (football, for you Americans). The proposal includes a large urban regeneration project aimed at attracting global fans while offering new advantages to locals. San Siro, after welcoming the two football titans for over 75 years, seems to obtain the youthful treatment which he deserves.
Such discussions on the modernization of the old sports facilities in Italy but are not new. But what drives the ball this time is the major support of private equity investors (PE) based in the United States. The recent takeover of Inter by Oaktree Capital, with an investment of 47 million euros (around 51 million dollars); And the acquisition of 1.2 billion euros in AC Milan per Redbird Capital in 2022 opens the way to a future which seems as large as the legendary clubs themselves.
It seems that EP players change the football game a purchase both and take advantage of the tax advantages that accompany it.
According to a PWC report – one of the largest accounting firms who advise these questions – “sports organizations are turning to institutional investors to provide capital to funded growth projects, such as stadium renovations, transitions to direct commercial models to consumers and international expansion.”
These investors, for their part, consider Italian football stadiums as prosperous companies with long -term potential. They ask how technology can transform them into intelligent sites and stimulating income. By taking advantage of existing expertise and portfolio assets, investors see opportunities to optimize sponsorship agreements and denomination rights and create synergies that add value.
“These are things that many clubs do not do for the moment,” said Eric Andalman, lawyer for Hogan Lovells who specializes in sports, entertainment and the development of projects. “All the investors who come here examine these kinds of opportunities and different ways to revolutionize the club.”
In Italy, PE football clubs now have enough money to build new stadiums but deduct operational costs, players’ salaries and stadium upgrades. Investments in infrastructure such as stadium renovations can be eligible for incentives such as “super-depreciation” deductions, which allow companies to claim greater and accelerated damping on assets, reduce taxable income and provide immediate savings.
This encourages investment in capital improvements, says PwC. There are also tax credits related to sports sponsorships, which can benefit companies involved in the development of football stadiums thanks to advertising partnerships.
In Hellas and return
Oaktree and Redbird are not the only EP players who are considering new stages. In January, Presidio Investors based in Texas plunged to acquire the Hellas Verona FC during a reported assessment of 130 million euros.
It is possible that the football club wins even more if it keeps its feet in Serie A and is not relegated to Serie B – a major blow for any team. For what? Because this would lead to a significant drop in income, in particular television offers, sponsorships and revenues of the day. Key players often leave for high -level clubs, weakening the chances of the return team. The commitment and sponsorship of fans also suffer, and the club risks promoting Serie A, compromising growth and stability.
For Hellas, this scenario has almost become a reality on several occasions. At the last verification, the club languishes in 14th place among the high flight teams of Italy. For frustrated fans, hope is that Presidio can breathe more than hope in the future of the club. There is the potential to generate cash flows and deepen the bench with new talents.
“For investment capital, history is very different, because they generally adopt a more structured approach. They are trying to focus on long -term growth, ”explains Paola Barometrotro, partner in the practice of business financing of Hogan Lovells.
Financial sponsors like Presidio, which Barometro and Andalman have advised on the Hellas agreement, focus a lot on income growth thanks to the license, marketing and monetization of the fans base.
“Now, at least in Italy, we have a very interesting mixture of investors who, I think, also bring different management styles and create a dynamic environment,” she adds. Ten years ago, it was unknown.
“Just to give you an idea of the trend in Italy; “So the trend is now very, very different.”
In 2020, the American billionaire Dan Friedkin took the reins of Associazione Sportiva Roma of the former owner James Pallotta. The Friedkin group has fueled the financial renewal with a mixture of intelligent commercial offers and a solid finish of Serie A.
The new owners of PE of Hellas Verona hope to imitate this magic. And, like Roma, Hellas does not currently have its own stadium.
Roma Shares Stadio Olimpico with Società Sportiva Lazio. And although Roma has long planned to build its own dedicated installation, the project has been faced with many delays and complications, including political problems, zoning problems and financial obstacles.
In just a few months, Hellas Verona was more likely. His current house, Stadio Marcantonio Bentegodi, was opened in 1963 and was renovated before the 1990 World Cup. The fact that the mayor of the city of Verona, Damiano Tommasi, a former interior field of Hellas Vérone helped make things happen. Now, American investors again seem ready to revitalize one of the historic sites of Italy.
“Mad Rush”
The trend is not exclusive to Italy. The future of the Premier League in England has also become much more American.
“We are up to 10 years old now,” explains Marc Trottier, associated with the law firm Bryan Cave Leighton Paisner in London, noting how half of the League teams are now under the majority of the American property. “The growth and value of clubs have been phenomenal in recent years.”
Among the stars are Arsenal, Chelsea, Liverpool, Manchester United and Everton, which is “a phenomenal asset”, explains Trottier. After Friedkin bought it in December, the club forecasts a “magnificent new stadium” at Dock Bramley-Moore.
While British clubs order higher price tags, Italy presents prosecutors a more affordable entry point. With too many buyers and a shortage of assets, this is a problem.
By coincidence, 10 Serie A teams also belong to North American entities. In addition to Inter Milan, AC Milan, Roma and Hellas Verona, North American owners also have Parma, Venezia, Acf Fiorentina and Bologna (owned by the Canadian and Montreal football club Joey Saputo).
“There is a crazy rush,” explains Trottier. “There are only so many football teams that you can buy. There are also the clubs of the lower league; but there are few things you can invest, and people fear missing these offers.”
Rumors abound concerning other clubs in the Divisions of Serie A and even lower. Serie B clubs, the second -level Italian League, are ripe for investments due to their promotion potential in Serie A. An upgrade would result in a significant increase in television rights, sponsorship and daytime income agreements.
Although Serie C clubs cannot offer the immediate financial awards of Serie A or Serie B, they provide a low cost entry point to investors who seek to build a long -term value.
“There are several teams that are potentially for sale if they get the right offer,” explains Salvo Arena, a leading member of the practice of mergers and acquisitions specializing in sports finance at Chiomenti, a law firm in Rome. These lower league teams “are a little cheaper, but you have a big advantage”.
For the moment, the American property trend in Italian football “will remain hot”, predicts Arena. With the acquisition by Hellas Verona by Presidio Investors as the last example, more companies should follow suit.
“There is a very high interest and at the moment, the Amecians are those who buy,” explains Arena. “There is no reluctance to this. I receive so many calls from Serie A, B and C teams. All the owners ask:” Do you know someone who wants to buy my team? “”