Off The Pitch – 30 October 2020

Emil Gjerding Nielson

A new phenomenon has recently gained traction in the world of football. Likely inspired by the success of global football conglomerate City Football Group, the Abu Dhabi firm behind Manchester City and nine other clubs, similar alliances are starting to bloom across the European landscape.

There are Pacific Media Group, who owns Barnsley, Belgian KV Oostende and Swiss FC Thun, while Leicester City’s owners recently took over another Belgian side, OH Leuven, and Giampaolo Pozzo who owns both Udinese and Watford – just to give a few examples.

Some seek to exchange players, training practices and coaching philosophy. Others reportedly intend to eventually launch IPO’s. And then there is someone like Core Sports Capital (CSC), who intends to not only achieve sporting success, but to build a consultancy business based on the experiences of managing its clubs.

“When a club think ‘what do we need to make the next step?’ they need proper football entrepreneurs to progress. That’s where we come in,” CSC’s founder and chief executive, Ahmet Schaefer, tells shortly after the Swiss firm added Danish second tier side Vendsyssel to its portfolio built in just 18 months that also includes two other second division clubs: France’s Clermont Foot 63 and Austria Lustenau.

Consultancy based on experience

Schaefer, 38, has worked all of his career in off the pitch matters. He worked almost four years as the assistant to then FIFA president Sepp Blatter before moving on to becoming the VP of acquisitions and strategic partnerships at global sports agency MP & Silva.

He then became a founding member and partner of the Arab Gulf Cup Football Federation. But he wanted to get more involved with what happens outside football’s office corridors.

So, he started CSC together with Jérôme Champagne, a French former diplomat and FIFA employee who twice stood as a presidential candidate for the very same organisation, and Ingo Winter, a scout with experience at clubs in Germany and Switzerland, who both act as advisors.

Photo: Handout  CSC has acquired Danish second tier side Vendsyssel to its portfolio that also includes two other second division clubs: France’s Clermont Foot 63 and Austria Lustenau.

Besides the actual running of the three clubs CSC has acquired – which the firm does in cooperation with local management teams who prior to being taken over were already largely in place – the firm acts as a consultancy providing a tailor-made solution for clubs, leagues and federations.

“Whenever we approach a club or they approach us with a proposal it makes us more credible that we apply the very same solutions to our own clubs and learn from those,” says Schaefer.

“Rather than writing a shiny document, getting a pay check and then disappearing”.

The advisory unit caters to, for example, teams who may not be in a position where they can afford international scouting, or if they want to outsource specific elements involved in running the club.

Typically, that would be clubs who run on shoe-string budgets. Despite that, Schaefer is not worried they won’t be able to afford CSC’s services.

“We don’t have some sort of profit or cost-centred approach like a traditional consultancy company where we are given a mandate to X club and then come up with a list of the hourly rates they need to pay,” he says.

Instead, the firm gets together with the club to set goals and determine what are the key performance indicators. CSC then charges a management fee as a percentage of turnover and is further compensated dependant on the uplift in value it generates – based on its knowledge and contribution. Staying with the club, Schaefer says, until the job is done.

“Getting the information and the shiny document is one thing. The other thing is to actually implement it and that’s what clubs need. Someone who pulls up his sleeves and actually does the job”.

Financing opportunities in a distressed market

Another pillar of CSC’s strategy has been exacerbated by the coronavirus pandemic that have led clubs to increasingly seek financing solutions that can help them manage their cash flows. However, they often times find themselves cut out from the flow of typical lenders.

Schaefer highlights this trend but also says clubs have always needed immediate cash due to the nature of transfer receivables and broadcasting payments that are paid in instalments. Helping to facilitate factoring deals with family offices in Zurich, Geneva and London, CSC also acts as a broker for financing arrangements.

“Private debt has become a more attractive non-correlating asset class for investors due to the Covid crisis -as long as the collaterals are solid, and in football there are many: TV and transfer rights, sponsorships,” he says, also pointing to stadiums as form of security.

Photo: Handout  “We don’t have some sort of profit or cost-centred approach like a traditional consultancy company where we are given a mandate to X club and then come up with a list of the hourly rates they need to pay,” says Schaefer who first acquired French club Clermont who play at the Gabriel Montpied Stadium (pictured).

The family offices, which he cannot name, charge interest rates at around eight to 11 per cent depending on the collateral and are able to provide tickets of between five and €15 million.

“It’s a niche product. We know our place when it comes to transfers in terms of price range, and we do not go and compete with the big ones – we consider ourself as a complimentary element in financing – whereas big funds may say a ticket of ten or €15 million is not attractive enough,” Schaefer says.

Compared to traditional banks like Macquarie, JP Morgan and Aurora, who charge interest rates between four and six per cent, it may seem like a costly affair, but Schaefer says there are other advantages to CSC’s solutions.

“If you go through a bank the approval processes are much more severe and time consuming. Our strength is to be flexible, dynamic and to deploy the funds in a rapid manner. Clubs need money today and don’t want to wait six months,” he says, clarifying they could do a deal in between four to six weeks.

Combining data in an overarching platform

And then there is CSC’s technology element. Together with B2B software company Clariba they have developed a platform that that combines the different elements of football data into an overarching platform.

According to Schaefer, the solution grew out of a need to bring together scouting, medical, match, training and coaching data in order to simplify and smoothen data management. Initially the solution was developed and deployed in the Aspire academy in Qatar and the Italian Football Federation before it was developed for club usage.

“Today in a professional football club you have the elements of scouting, medical, match analysis and training and coaching. For each of those systems you have sub systems which are available today in the market such as WySCout, Instat, Hudl etc.,” he says.

“What we do not have is an overarching platform neutral API solution which takes data out of the 3-4 elements each clubs have and provides you as a player, coach, therapist or scout with relevant data you need to make a better decisions”.

The firm clearly has ambitions plans but, having acquired three football clubs in the span of around just one year, the foundations are now put in place for CSC to develop their business and don’t see a need for further acquisitions – at least for now.

“For us it’s time to consolidate, integrate and to exploit our synergies and optimise the entire structure -both from a sporting and non-sporting side,” he says.

“However, we remain very opportunistic. We know with every crisis there are also opportunities and we believe in the long-term story of what we’re doing”.