U.S. Sports Fund That Boosted A.C. Milan’s Revenue Heads to Japan

【Seo Hye-jin, Financial News correspondent in Tokyo】A U.S. investment firm that owns the storied Italian soccer club A.C. Milan is entering Japan’s sports market. Before acquiring a club, it will team up with Japanese teams to explore business opportunities that make use of fan data and players’ intellectual property (IP).
According to the Nihon Keizai Shimbun (The Nikkei) on the 8th, the Development Bank of Japan (DBJ) will soon invest several billion yen (about tens of billions of won) in a fund managed by RedBird Capital Partners, an investment firm specializing in sports and media. This is the first large-scale investment in a sports fund by a major Japanese bank.
For the time being, RedBird plans to focus on collaborating with Japanese professional clubs through DBJ. It is also considering investing in Japan’s sports industry in the future.
Founded in 2014, RedBird acquired A.C. Milan in 2022 for about 1.2 billion euros (about 1.8236 trillion won). It has also invested in the operating companies of the Boston Red Sox and England’s Liverpool FC. Its assets under management total $21 billion (about 28.644 trillion won).
Its strength lies in using IP and data to attract fans and increase revenue. It has a specialized AI and data analytics team, and A.C. Milan’s revenue from commercial activities and licensing increased 2.4-fold in the three years after the acquisition.
RedBird also has experience turning individual players’ rights into business opportunities. In 2019, it set up a company with the players’ associations of Major League Baseball and the National Football League (NFL) to centrally manage players’ image rights and other rights. By licensing those rights for use in trading cards, games and other products, it broadened revenue streams for players and leagues. The number of registered players exceeded 10,000 by 2022.
DBJ has provided funding for regional development centered on stadium construction. This time, it will act as a bridge, connecting a global sports investment firm’s experience with Japanese clubs.
Japanese clubs’ challenge is their heavy dependence on corporate sponsorship. If sponsoring companies’ performance or the domestic economy deteriorates, club operations can easily be affected. Expanding revenue streams and securing stable investment capacity could lead to the recruitment of outstanding players and managers.
In 2022, the sports industry accounted for 1.83% of Japan’s GDP, a lower share than in the U.K. and Germany. The Japanese government initially set a goal of growing the market to 15 trillion yen (about 129.15 trillion won) by 2025, but last year postponed the target date to 2030.
The door to external capital is gradually opening. The J.League allowed clubs to go public in 2022. However, what changes the inflow of capital will bring for local fans remains a separate challenge.
In the English Premier League, criticism has been voiced that fund-led club management has led to higher ticket prices and the departure of local fans. In Japan, too, club management that increases revenue while keeping local fans coming to matches will be put to the test.
[email protected] Seo Hye-jin Reporter