Private Equity in Football Explained: Why are Firms Investing Billions?

According to Forbes’ 2025 valuations, there are 20 clubs in world football worth over $1 billion, the largest of which is Real Madrid, who are worth around $6.75 billion.

For context, that valuation exceeds the GDP of 50 countries, including Fiji, Greenland, and World Cup qualifiers Cabo Verde and Curaçao.

So if clubs really are worth that much, who in their right mind would buy one?

Historically, it has been billionaires who largely do so for prestige. But the landscape seems to be changing. Recent years have seen the increased interest of private equity (PE) in football.

But what is private equity? Why do they want to invest in football, and what does it mean for the sport?

This article will investigate these key talking points.

What is Private Equity?

Put simply, equity is ownership in a company, and private equity is the ownership of a company not listed on a public stock exchange.

Therefore, a private equity firm is a group looking to use an investment fund to take ownership of a private company (which most football clubs are) with the intention of improving its performance and selling it a few years later for a profit.

The money used to buy a company, or club, can be raised in different ways. 

Sometimes, investors will buy a club through what is called a leveraged buy-out (LBO).

Leverage refers to borrowing used to fund a takeover, with the debt placed on the club rather than the new owners. This was how the Glazer family controversially purchased Manchester United back in 2005, and is repaid via the club’s revenue streams, not the fund itself.

Otherwise, a firm can provide all the capital themselves. More detail on different clubs will come later, but BlueCo’s recent takeover of Chelsea is an example of this, where debt was not loaded onto the club.

Why is Private Equity Becoming More Popular?

Private equity’s growing presence in football reflects both opportunity and instability.

It is worth noting that the primary goal of PE firms is to buy a company, streamline it, and sell it for more, often within a window of 5-7 years. Football clubs offer a major chance to do so.

In an era of mounting operational losses and frequent financial mismanagement, clubs often find themselves strapped for cash and therefore open for an injection of capital. 

This is especially true since the COVID pandemic, where revenues temporarily took a major hit.  Clubs such as Inter Miami and Atletico Madrid were invested in by PE at this time.

While a loss-making company initially seems like a risky investment, football clubs are often valued on revenue potential rather than profitability alone, which PE firms know all too well.

Therefore, clubs who are deemed to be mismanaged in particular offer PE firms the opportunity to turn them around in a relatively short time by making the club more commercially efficient.

It is also worth keeping in mind that, according to the Deloitte Football Money League 2026, the 20 highest earning clubs in the world have generated over €12 billion ($13.8bn; £10.5bn) in revenue for the first time.

There are, of course, some firms that still don’t want to take this risk. Instead, they sometimes opt to invest in the leagues themselves. 

In 2020, more than 20 PE firms expressed interest in investing up to €300 million ($354m; £263m) into the Bundesliga. 

One of the 20 included CVC Capital Partners, and in 2021, the PE firm bought an 8.2% stake in a company that will manage revenues from La Liga’s broadcasting and sponsorship rights for 50 years, according to Reuters. The investment was worth nearly €2 billion ($2.4bn; £1.75bn).

What are the Rules?

In the Premier League, LBOs were restricted in 2023, capping them at around 65% of a club’s value.

As for private equity, regulations are relatively loose, meaning as long as the firm can provide proof of capital and meet the current Owners’ and Directors’ Test, they are usually free to invest as they please. 

Similar can be said for most of Europe, in France, four clubs are owned by PE firms, while in Spain, there are no direct restrictions on their involvement. The investment that comes with allowing PE has become so popular that Real Madrid, a Socio-club owned by its members, recently shared plans to offer up to 10% of the club to private investment.

The MLS, however, has introduced strict limits on PE involvement. For a PE firm to invest in an MLS franchise, the fund must have:

– A fund of at least $500 million.

– No more than 10% of a fund can be invested in one team.

– Funds can invest in no more than four franchises.

– Each investment in a single club must be more than $20 million, but it can’t surpass 20% of the club’s equity.

– PE funds cannot hold board positions or controlling ownership.

Other US sports are similarly regulated, also enforcing a minimum hold period. This means the PE fund cannot sell its investment for a certain number of years, preventing aggressive short-term cost cuts that may damage the franchise in the long run.

Is Private Equity Good or Bad for Football?

A clear example of potential PE upsides in football is Elliott Management Corporation’s time at AC Milan.
In 2017, a Chinese investment company led by businessman Li Yonghong bought AC Milan from long-term owner and former Italian Prime Minister, Silvio Berlusconi.

To finance the investment, Li borrowed around €300 million ($353m; £263m) from Elliott. However, after defaulting on their loans, Elliott found itself as owner of AC Milan.

Having not won a Serie A title since 2011, Elliott cut the club’s spending and its transfer strategy shifted to younger players who held their value better than their more experienced counterparts.

Milan won the league in 2022 and secured a return to Champions League football, and a matter of months later, Elliott sold its majority share to another PE firm for €1.2 billion ($1.4bn; £1bn). 

There are, however, downsides to private equity in football.

A notable one is the aforementioned Leveraged Buy-Outs. Since the Glazer takeover of Manchester United, the club has spent around £1.2 billion paying back debt interest, debt repayments, dividends and fees to the family. It was recently reported that the club is still in around £1.3 billion worth of debt.

While the Glazers are not a PE firm themselves, they represent a common method that PE firms use to purchase football clubs. Burnley’s takeover by ALK Capital in 2020 is another example, with the firm taking a £65 million loan against the club which now sees the club in around £113 million in debt.

Furthermore, football fans often express discontent that their club is being run as a business rather than as a sporting institution.

Since Todd Boehly and Clearlake Capital’s (BlueCo) takeover of Chelsea, the club’s supporters have raised concerns about their ownership, with some pointing toward a youth-focused transfer strategy as one that focuses more on sell-on value than genuine success.

The rise of Multi-Club Ownership (MCO) is another sticking point, with diversified MCO groups often being more financially secure for PE firms, while fans often see it as anti-competitive. BlueCo’s purchase of RC Strasbourg is an example.

Ultimately, modern football is dictated by money, and this money increasingly comes from private equity investment. The future may see an increase in either league-level or MCO investment, where PE firms’ risk is spread widely, as opposed to riskier investments in a single club.

However, the future of PE in English football will be further shaped by the recent Independent Football Regulator, which has expressed concerns over the LBOs that many PE firms rely on.

While it seems distant from the game itself, understanding concepts such as private equity and MCOs is vital when it comes to understanding modern football as a whole.

GIS programmes help students develop this holistic view through expert-led courses such as MSc Football Business. To explore our range of programmes, view our course offerings.

Article by Zakaria Anani