European football needs innovation and drama, says Real Madrid and FC Barcelona investor

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

European football needs more matches with drama and competitive tension to keep fans interested and attract new audiences to the sport, according to the chief of the US investment group that has backed top Spanish clubs Real Madrid and FC Barcelona.

Alan Waxman, a former Goldman Sachs partner and co-founder of Sixth Street, which manages more than $75bn in assets, said the sport needed to innovate in order to appeal to a wider audience.

“There are more and more forms of entertainment that people, especially younger demographics, can consume,” he told the Financial Times. “If you don’t create more drama . . . you can start to lose the core and once that starts, it’s hard to get people back in. That’s why the best businesses innovate before that happens.”

The San Francisco-based investment group executed deals in 2022 with La Liga giants Barça and Real Madrid. The two clubs are backers of a plan to create a new European Super League to replace the Uefa Champions League, Europe’s most prestigious club competition.

Waxman, who declined to comment on the ESL, expects to see “more structural change in European football” in the search for more games of consequence that can excite fans.

Next season Uefa is overhauling the Champions League format, with the aim of reducing the number of inconsequential matches.

Waxman warned that unless football clubs with global brands continued to invest, they were at risk of losing their lustre. Clubs that may have had global recognition historically could become “melting ice cubes because they don’t do the right things from a business and fan perspective and they don’t invest in the experience”, he said.

The opportunity for clubs is to tap into new technology that allows fans to follow them from wherever they are in the world, Waxman said, in a continued diversification of revenues in addition to ticket sales and traditional television deals.

Waxman, who co-founded Sixth Street in 2009, also highlighted the urgent need to upgrade stadiums and other infrastructure to give fans a “centre of gathering”. Real Madrid and Barça are investing heavily in their stadiums.

Sixth Street took a majority stake in a company that owns 25 per cent of Barça’s La Liga television rights for 25 years, allowing the member-owned club to generate capital gains and pay down debt. Separately, Sixth Street and Legends, the live events business in which it has a majority stake, struck a deal with Real Madrid, which received €360mn to invest across the business.

The investments are part of a surge of private capital into the world’s most popular sport.

Private equity firm CVC Capital Partners has financed the Spanish and French football leagues, while US investors have bought famous clubs, including Italy’s AC Milan and Premier League side Chelsea.

As well as backing two of the most famous clubs in sport, Sixth Street last year committed $125mn to buy a new National Women’s Soccer League club, now known as Bay FC. 

“The biggest growth opportunity in sports over the next 10 years will be global women’s football,” Waxman said. “You can already see that happening, but that’s just getting started.”

US football legends Brandi Chastain, Aly Wagner, Danielle Slaton and Leslie Osborne co-founded Bay FC in partnership with Sixth Street. The NWSL side has made a series of international signings ahead of its first season, which starts in March, including Nigerian international Asisat Oshoala, Zambian forward Racheal Kundananji from Spanish side Madrid CFF and Scottish defender Jen Beattie from Arsenal.