Los investment funds They are, broadly speaking, one of the new business models within sports in which a group of businessmen allocate millions of dollars in exchange for a percentage. In recent months, within the Liga MX interest began Apollo Management Inc to inject 1.3 billion dollars into the local tournament with the aim of boosting the infrastructure of the teams that make up the competition.
This situation triggered a series of debates and according to reports from journalists (Ignacio Suárez, Gustavo Mendoza, among others) there is disagreement on the part of a group of owners and companies that are behind the teams. The reason is because they do not agree with the series of requirements demanded by the investment fund and the point with the greatest denial: sharing ticket profits.
Leagues such as the NFL, NBA, MLB, Ligue 1, First Division of Saudi Arabia and teams such as Inter Milan, Manchester City, Chelsea and Paris Saint Germain have investment from these organizations. And in case the “18 owners” of Mexican soccer accept the proposal of Apollo Management Inc. They would join this new wave.
The Mexican Stock Exchange (BMV) defines these groups as organizations that accumulate money from different investors to acquire financial assets and generate profits. According to reports from the digital magazine Sports Prosports are an attractive industry for these groups because they have three reasons to be a profitable business: guaranteed money flows, fan loyalty, and they are recession-proof.
Andrew Umbers, socio de Oakwell Sports Advisory —strategic consultancy based in London— explained in an interview for the same medium that “the returns of sports franchises exceed most assets in 5, 10 or 20 years.” In other words, they are a “safe” business that has a lot of profit margin.
In MexicoInvestment funds are not a new issue, Necaxa is the most recent case where a group of foreign investors entered the Liga MX through the company NX Football USA. This group is made up of different figures, including actress Eva Longoria, model Kate Upton and athletes Justin Verlander (baseball player) and Odell Beckham Jr (American football).
The injection of capital into the business is an attractive proposal for team owners, however, in many cases the business is not as profitable as it appears, since worldwide there are different cases of teams or leagues that end up losing more than they they won, among them Ligue 1.
Last July the French Football League (LFP, for its acronym in French) was accused by the country’s Senate of different charges related to a deeply dysfunctional management: possible corruption and embezzlement of funds related to an investment agreement, according to reports from The Associated Press news agency ( AP).
CVC Capital Partnersa private equity fund, reached an agreement with the French league in 2022. The group invested $1.6 billion in exchange for a 13% stake in the new commercial subsidiary in exchange for being in charge of marketing the television rights. . This agreement was reached after French football was on the verge of going bankrupt due to the collapse of a broadcast rights agreement with the company Mediapro.
According to information from the sports journalist who covers Ligue 1, Andrés Onrubia Ramos, the money agreed with CVC It was going to be distributed between the teams of the French first and second division, however, the agreement is ambiguous since it was not specified in which areas the capital was going to be invested. After the French parliament made changes to a sports law so that the agreement between CVC y LFP materialize, the league announced that part of the agreed money was going to be used to pay the loans that the organization requested from the French State.
On November 5, the house of the president of the LFP, Vincent Labrune and the league headquarters were searched. The authorities are investigating the transaction for 37.5 million euros that came from the agreement and which could have incurred a crime of embezzlement of public funds. This capital supposedly would have ended up in the accounts of different league executives, legal advisors and other people involved in the agreement.
The investigations remain ongoing, however, this case has begun to be considered in France as one of the biggest scandals in French football.
Juan Carlos Rodríguez, high commissioner of the Mexican Football Federation (FMF), sent a letter to the team owners on November 29, in which he spoke of the “largest transformation project” in the history of national football.
The document to which the specialized media Sportico had access, talks about the participation of the NFL in the investment and meetings with the MLS about expanding their current relationship (Leagues Cup). However, nothing is mentioned about the financial details such as: what the investment fund asks for and to which areas the money will be distributed.
According to information from journalist Ignacio Suárez, the “most powerful” teams in the league do not agree with the investment fund, with the exception of Club América, which belongs to Emilio Azcárraga, former president of Grupo Televisa. It coincides that the clubs with the highest income from television rights, better attendance and more titles in this century make up the “opposition” group.
The proposal is scheduled to be debated at the next owners’ meeting, which will be held before this week’s Liga MX final. However, the answer given at this meeting will not be definitive, as it is considered the “master project” of the president of the FMF.
During the owners’ meeting this Friday, December 13, Juan Carlos Rodríguez presented his resignation as commissioner of the FMF after the proposal was rejected by a group of owners. According to reports from sports journalist David Medrano, the star project of “La Bomba” Rodríguez was questioned and a vote was not held.
The investment fund project was rejected, however, it is not the first time that a plan of this category has been put on hold, since from 2022 there are intentions for a strong injection of capital to enter the Mexican league.
