European Soccer, presented by JPMorgan, Goldman Sachs and Bank of America
JPMorgan Chase JPM 0.34%
& Co.’s role as the money behind the now defunct football Super League in Europe shows the growing importance of US banks to the region’s economy, including the continent’s most beloved sport.
The decision on European football is an extension of the growing dominance of US banks over their local banking rivals, advising Europe Inc. The top five European investment banks by income are based in the United States, according to Dealogic.
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US banks have introduced financing options used in US sports that are seen as innovative in a region more accustomed to lending at any cost. They are part of a larger group of financiers, including private equity, pension funds, insurance companies, and other lenders, who target the yield market.
“The role of American banks in funding European football is enormous and it is growing steadily,” said Pedro Trengrouse, sports lawyer and coordinator of a FIFA-backed international sports and football management executive program, l world governing body of football.
There is also pressure on European clubs to increase their profitability by emulating the United States. In Europe, clubs risk being demoted to an inferior, less lucrative league if they don’t play well.
Among the 12 clubs that have joined forces to create the American Super League, Liverpool, Manchester United,
Arsenal and AC Milan belong to the United States. At least four of the clubs that signed up for the league have received funding from US banks, including JPMorgan, Goldman Sachs Group Inc.
and Bank of America Corp.
Kieran Maguire, a football finance professor at the University of Liverpool, said European banks face a higher risk of backlash from their customers if loans to football clubs turn sour. They could be forced to tighten the financial screws of teams, limiting their ability to spend on the pitch. American banks, he said, have more freedom to act because they are further removed from local communities. American banks do not have a significant commercial presence in Europe.
Some European banks have also pulled out of football finance following the 2008 financial crisis that dragged the region for years, said Greg Carey, head of sports finance at Goldman Sachs.
American banks also have a head start because of their experience in funding American sports stadiums and their relationships with the owners of some of the biggest teams.
Goldman Sachs created the so-called Mediaco structure in 2017 for Inter Milan and AS Roma, which allowed the two Italian teams to issue public bonds guaranteed against media and sponsorship rights – a structure they continue to use as a source of funding. The bank has committed a significant portion of its balance sheet to finance the sports sector, Mr Carey said.
JPMorgan, which was supposed to provide the Super League with a loan of around 3.5 billion euros, or $ 4.2 billion, before the plan collapsed, has been involved in other big deals in the European football in recent years. In 2019, she and Bank of America led the structuring of a loan of 575 million euros over 30 years for the renovation of Real Madrid’s Santiago Bernabéu stadium. Banco Santander in Europe HER
and Societe Generale HER
played secondary roles.
JPMorgan also advised Rocco Commisso, the Italian-American owner of cable company Mediacom Communications Corp. and New York Cosmos football club, as part of its purchase of Italian club ACF Fiorentina in 2019. He also advised US billionaire Dan Friedkin on his latest AS Roma takeover. year. Goldman acted as an advisor to the owners of AS Roma in connection with this agreement.
In a previous deal, JPMorgan, led by its banker Edward Woodward, advised the American billionaire Glazer family to take over Manchester United in 2005. Mr Woodward then moved on to the club, eventually becoming its executive vice president.
Following public outcry over the Super League, Mr Woodward has said he will step down from his post at Manchester United at the end of the year.
“We clearly misjudged how this deal would be viewed by the wider football community and how it might affect them in the future. We will learn from it, ”a spokesperson for JPMorgan said on Friday.
As the stadium building boom in the United States began to slow about five years ago, Goldman Sachs turned to Europe. He led the interim financing of the newly completed $ 1.7 billion, 61,500-seat stadium for London’s Tottenham Hotspur. Bank of America and HSBC Holdings PLC in the UK were also lenders.
He is also participating in the renovation of the vast Camp Nou stadium in Barcelona. The bank is working on the 850 million euro project and has been involved in the design, engineering, economic feasibility and prospects for job creation, Mr Carey said.
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