After the withdrawal of the American King Street pension fund from the Bordeaux club, this investment model questions.
Many of them have been tempted by the takeover of their club by foreign pension funds, especially American. But two years after the acquisition of the Girondins de Bordeaux, the King Street pension fund withdrew on Thursday, April 22. Jean-François Brocard, sports economist and lecturer at the University of Limoges, helps us to better understand the model of these financial players.
• Why has the American King Street pension fund, and main shareholder of Girondins de Bordeaux, decided to withdraw?
The main reason is financial. The sole objective of pension funds is to make their investment profitable. King Street bought the Girondins club in 2018 “for a very small amount for them. These pension funds manage the pensions of Americans. So they have a huge amount of funds available that they want to invest. So they invest in real estate, industry, pharmaceuticals, and in football for a few years “, analysis Jean-François Brocard, sports economist, lecturer at the University of Limoges.
Their logic is therefore to invest while trying to obtain a profitability linked to the operation, but above all to straighten the club in order to make a capital gain on resale. To complete this strategy, they are also betting on buying players at a low cost, hoping to sell them at a higher price. A maneuver, efficient and fast enough to collect money, which will thus benefit the club. “Investing in football also allowed them to discover the French market and to build up a network to possibly invest in other sectors”, adds the specialist. Another part of their maneuver: the resale of players.
However, this strategy has been a failure. King Street was losing money. “They did not see a solution to reduce their losses. They thus decided to withdraw rather than continue to lose money”, remarks Jean-François Brocard.
• The mayor of Bordeaux said that the problem with pension funds is that they are “a financial nebula which helps to widen the gap between supporters and owners”. Is it true ?
“In the example of the Girondins, it is obvious, slice sports economist Jean-François Brocard. They came in, laid off a lot of people and put people around them in the driver’s seat. They moved away from the supporters, to put it mildly, by implementing a purely commercial strategy. “ For this specialist, this type of management corresponds to the American vision, which is based on the principle of “you like us or you go”. “We come back to the ignorance or failure to take into account the specificities of professional sport in Europe. The case of the Girondins will certainly remain the first example of failure of an American pension fund, due to the large number of errors made” , continues the specialist.