Owning a soccer team is a game of risk and reward–high stakes and heavy spending to outlast the threat of relegation.
Samuel Porter, owner of Club Necaxa and La Equidad, and investor in Wrexham, shares his insights on navigating these challenges in the latest episode of Portfolio Players.
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The one place that I think can be a little tricky is European football in soccer. And because there is relegation exists and you can buy a team in one league and you can end up in a different league where the valuations are different, the revenues are different and the situations are different. There's no safety net of if you finish last, you get the number one draft pick. There is a very much you finish last, you're going down and then you've got to spend to get back up. And if you're in the league that you that you want to be in, you've got to spend to stay in that league. And if you're a team that's at the higher end of one of those leagues, say you're at the higher end of the Premier League, you're a, a Man United or a tandem Hotspurs or a Chelsea, you are sending to get into the Champions League where you're having another media rights bump. So everybody in European soccer is kind of chasing that next thing that really puts everybody up against it in terms of spending their free cash flow. And, and sometimes you spend that free cash flow on players and coaches and the triage of getting the team going forward as opposed to being able to make. Capital investments into the the business which we have a little bit of protection here in the US in the sense that we don't have promotion relegation.
