Foreign investors in Danish club football
Over the past decade, international club football has developed into a giant entertainment industry, with capital-rich investors across countries and continents radically changing the clubs’ ownership structure. One of the world’s largest football clubs – Manchester United – with an annual turnover of more than DKK 5 billion – is today owned by a number of private foundations affiliated with the American Glazer family. One of Europe’s top clubs – Paris Saint-Germain – is owned by the state-owned company “Qatar Sport Investments”, which has invested billions of DKK in top international sports. A third example of capital interests across countries and continents is the big club FC Inter from Milan, which is owned by the privately owned Chinese supermarket chain “Suning Holding Group”. However, it is not only the ownership structure of Europe’s largest football clubs that has changed radically – the same development has taken place in Denmark.
Danish clubs are strongly influenced by the global, commercial development
The Danish football clubs’ finances in the form of TV income, transfers of players, sponsorship income and Matchday income are of course on a completely different level than the clubs in the biggest European leagues. The annual turnover of Danish top clubs such as FC Copenhagen and FC Midtjylland is less than 15% of the annual turnover of bottom clubs in the Premier League such as Fulham F.C. and Sheffield United or top clubs like Norwich City F.C. and Swansea City A.F.C. from Championship. Nevertheless, the ownership structure of many Danish clubs is also undergoing significant change due to the global, commercial development within international club football. Since the English businessman Matthew Bentham, who also owns the English Championship club Brentford FC, in 2014 bought the majority of the shares in FC Midtjylland, 9 out of 24 clubs in the country’s two best leagues – the Super League and the Nordic Bet League – have been acquired by foreign investors who own more than half of the clubs’ shares.
The majority of Danish clubs on their way to “foreign hands”
FC Nordsjælland, which for a number of years has collaborated with the English businessman Tom Vernon’s “Right to Dream Academy” in Ghana, was bought a few months ago by the Egyptian “Mansour Group”. SønderjyskE was bought last autumn by the American financial matador Robert Platek, who a few weeks ago also bought the Italian Serie A club Spezia. In addition, Vejle Boldklub from the Super League has also come “into foreign hands” by Andrej Zolotko – a former player agent from Moldova – and the Chinese player agent Lucas Chang. And most recently, three more Super League clubs – Randers FC, AC Horsens and AaB – have offered themselves to potential foreign investors. It is thus very realistic that more than half of the Super League clubs will in a short time be owned – in whole or partly – by foreign investors. This is already the case in the second best row, where half of the clubs – Vendsyssel FF, Fremad Amager, FC Helsingør, Esbjerg fB and HB Køge – within the last 2-3 years have been acquired by foreign investors. There are several explanations for this development.
Danish clubs as a “springboard” to a major league
Firstly, Danish clubs are a relatively easy and cheap access for international club owners to bring young players from especially Africa and South America to one of Europe’s strongest leagues, where transfers of players have been exponentially increasing in recent years. It is not uncommon for the sale of a talented striker to the second-best league in England – the Championship – to bring in up to £ 10 million. And the amounts are of course significantly higher if it succeeds in selling or reselling players to the five biggest leagues in Europe: Premier League, Bundesliga, Serie A, La Liga and Ligue 1. The Danish clubs are thus used primarily as a “springboard” , as it is easy to get a residence and work permit as a football player in Denmark, no matter where you come from in the world. The easy access to residence permits is a great advantage for club collaborations, which have become increasingly widespread in international football.
Foreign investors typically own several clubs in Europe
Secondly, Danish clubs that have foreign owners typically enter into a formal collaboration or informal network with other clubs in Europe. The collaborations are characterized by an investor or a circle of investors buying the majority of shares in two or more clubs, which i.a. is the case in Esbjerg f.B. The traditional club was acquired a few weeks ago by an American and Chinese investor group, which also owns the majority shares in the English Championship club Barnsley FC, AS Nancy from France, KV Oostende from Belgium and FC Thun from Switzerland. Barnsley FC and AS Nancy in particular have significantly greater sporting and financial potential with the three clubs from the smaller leagues, which will primarily function as “a food chain” for young, cheap talent and as good talent development environments. In addition, the clubs can also easily borrow or rent the individual players across the individual clubs by a joint group of owners.
Low levels of wages and well-organized society
Thirdly, the Danish rules mean that the players from e.g. Africa and South America do not have to have a particularly high wage, compared to other European countries such as Netherlands. The relatively open business model in Denmark is something that attracts foreign investors. There are not many restrictions either from the Danish authorities or from the Danish Football Association (DBU) and the Association of League Clubs (Divisionsforeningen) if you want to buy a Danish football club. In addition, Denmark is also a stable and well-organized country with a strong infrastructure and a high level of education. Finally, many of the young players from Africa and South America also come to a country where most speak English – a language that the talents can greatly enjoy and benefit from later in their careers.
FCN and FCM have sold many talents through strong academies
Fourthly, Danish club football has also been able to develop some very strong football academies, especially in FC Nordsjælland and FC Midtjylland. At these academies, a number of “salable talents” have been developed, both from Africa, South America and Denmark, which have been successfully sold and resold to strong clubs in Germany, Italy, the Netherlands and Spain. These include Emre Mor (Borrusia Dortmund), Mohammed Kudus (Ajax) and Mikkel Damsgaard (U.C. Sampdoria) from FCN and Simon Kjær (AC Milan), Pione Sisto (Celta Vigo) and Paul Onuacho (KRC Genk) from FCM. About clubs such as Vendsyssel FF, Helsingør FC and Fremad Amager are also able to develop talents similar to FCN and FCM is in my opinion extremely questionable.
Foreign investors involve (also) great risks
Of course, it is not odious that foreign investors invest capital in Danish football clubs. And there are many indications that most foreign owners have bought several of the clubs relatively cheaply. In my opinion, however, there are several risks in that the majority of shares in a Danish football club are placed with one or a few foreign investors without local affiliation in the club. I do not think that foreign investors will maintain their commitment to the club, unless marketable players are developed within a foreseeable period of time – only thereby will a “reasonable” return on the “investment” be achieved. And in that connection, in my opinion, there is only room for 3-4 attractive talent academies in a small country like Denmark with only 5 million. inhabitants.