The reasons for the fiasco of foreign capital in LaLiga: "The problem is that they don't quite understand the championship in which they invest"
Barely a few minutes had passed since Almería achieved salvation in extremis with a penalty draw from Embarba when the coach, Rubi, announced the resignation of the entire technical staff. Local media claimed that he was leaving due to difficulties with the deal with the management of the club, in the hands of the Saudi sheikh Turki Al Sheikh since 2019 for 27 million euros. His words about the “little influence” he had on the signings at the beginning of the season went in that direction. “The objective of this type of capital does not always coincide with sports performance,” explains Jorge López, professor of Sports Management at the European University.
LaLiga is not being exactly 'El Dorado' for foreign investment. 30% of First Division clubs have external capital. Their management has placed them in a very difficult position this year, with three relegated and two saving themselves on the last day.. Only Mallorca and Girona have managed to end the year without rush. “The problem with many investments is that they don't fully understand the championship they are entering,” explains López.
Foreign-owned clubs
The first to land in LaLiga was Peter Lim, owner of Valencia. The Singaporean businessman bought the Ché club in October 2014 for 94 million euros after trying to take over Liverpool in 2010. Almost 10 years later, Valencia has hit bottom and has played the fourth worst campaign in its history. “A club is a special company because it is unpredictable and passionate. The better you do things off the field, the better results you will have on it, but it is not an exact science,” explains Carlos Cantó, CEO of SPSG Consulting.
Peter Lin in the Mestalla box at a Valencia match.
Since then, businessmen and funds from various countries have arrived to try to do business with investments in various clubs from both LaLiga Santander and SmartBank.. In total, 252 million for the purchase of the teams without prejudice to further investment in other concepts such as purchase of players, improvements to the stadium…. “LaLiga is interesting to invest because it has a very high possibility of revaluing,” says López.
This professor highlights the sports management of Girona, owned by the same owner as Manchester City, “it has an interesting model”, he tells about the structure of the tenth-ranked player in LaLiga. Mallorca, for its part, has been an absolute roller coaster since it was acquired by the American Robert Sarver in 2016 for 21 million euros, reaching military status in three different categories.
From joy to disappointment
The chain of events is similar in all externally owned entities: Initial illusion and disappointment after failure. The CEO of SPSG Consulting talks about the “disaffection not because of the nationality of the capital but because of the management”, while the professor from the Universidad Europea talks about “initial expectations that are not met”.
The Valladolid players after being relegated to Second. . GARCIA EFE
Valladolid, Espanyol and Elche are facing a difficult situation because the interesting thing about a football investment, as Cantó says, is “buying in lower categories to be able to move up”. These teams, for which 30, 50 and 20 million were paid respectively, face a considerable decrease in income and other key factors. “It's not just about money, it's also about positioning, brand image and access to specific markets,” says López.
In the press conference after Valladolid's relegation, the president, Ronaldo Nazario, said that “football was not mathematical” regarding his management and denied rumors of the sale of the club. Rumors, by the way, that hover over all entities with foreign capital when the results are not as expected. Such is the difficult business of football.