Creating upside: Four lessons for Australian football from US investors in Europe

It is often said that the United States has the biggest and best sporting market in the world.

According to the latest number from Forbes, the average value of a franchise in the National Football League (NFL) is $3.48 billion USD, a 14% increase on 2020.

In the NBA, the average franchise value is $2.202 billion USD, having steadily risen year-on-year since 2015 which was the first year that the average value crept over the $1 billion USD mark.

Even in the much-maligned MLS, the average franchise value is a cool $550 million USD up from $319 million USD in 2019 – a remarkable 72% increase.

So, with such a booming sports economy on their own doorstep, why are American investors turning to European football?

That was the question The Athletic Football Podcast hosts, Mark Chapman and Matt Slater, sought to answer in the latest episode of their podcast.

In two revealing conversations with US sports investors Michael Kalt and Brett Johnson, there were some potentially interesting lessons for Australian football to learn.

Kalt, who rose to sporting fame as part of the investment group that helped transform the fortunes of the Tampa Bay Rays in the MLB, now leads consortiums investing in European football clubs with current investments in AS Nancy in France and Oostende in Belgium.

Johnson is co-owner of Ipswich Town and also the owner and director of Phoenix Rising Football Club, which plays in the second tier of US football.

So, what do they like about European football?

Why don’t they invest the same sizeable funds into MLS teams?

What can Australian football learn?

Below we highlight four key lessons.

Upside Counts

The majority of clubs that Kalt and his consortiums look at investing in are loss-making businesses.

They don’t make money.

So why, when you have significant investment capital and can invest in a booming domestic sports market, do you choose to take your money to Europe and put it in loss-making clubs?

For Kalt, there are three things a club has to have to prove its investment value.

  1. Asymmetric Upside via promotion or European qualification
  2. Room for commercial improvement
  3. Training profits (EG: Player Transfers)

On the first point, Kalt explains the uniqueness of promotion and relegation and continental competition created pockets of value in Europe that offered much lower costs of entry in Europe.

“Can you buy them when you’re up underlying your downsize risk, meaning you’re not paying full price for a club that is recently promoted or in the top league or coming off European competition and you’re paying full price,” he said.

“If you look at the clubs we bought, we’ve bought clubs like Nancy, historically a club that has been in Ligue 1 and bounced back and forth. It has the infrastructure of a Ligue 1 team. It should be a first division, mid-table club, so there’s headroom there and not a lot of downside risk.

“That’s the sort of situation we look for, where there is an asymmetric upside, either through promotion or European qualification in a smaller club where we think we can compete in the top four or five teams.

On what he termed, “Training Profits”, which most readers would refer to as player transfers, Kalt thinks it’s incredible that a club could generate a sizeable portion of its overall value simply by trading players.

“This is a massive mover in this,” he said.

“When you create that value in American sports, the only way to really monetize it on the player basis is to make like exchanges. To say, I have a player that has demonstrated his worth and the market will pay way more for him. He’s got three or four years left of club control … your only path to monetization is to keep that player and hope the club plays better and people show up and you generate more revenue in the stadium.

“Or you go and try and trade the player for younger, more controllable talent and hope that that talent does the same thing.

“In Europe, you create value, and the market comes to you and says ‘okay, today we’re willing to pay ‘x’ for that player, and, by the way, that ‘x’ might be some significant portion of what you played for the club!’

“That system, combined with analytics to create that value, which is how we started looking at this … is why it’s so intriguing.

“You reinvest some of that back into the club and you can reduce your downside.”

Europe’s football culture and ecosystem are, obviously, significantly more developed than that of Australia or the United States.

But what is interesting to take from the conversation is the factors that make for a worthwhile investment for Kalt and his ilk.

They want to invest in clubs that have room to grow.

None of this is to suggest that the incorporation of promotion and relegation in Australia is going to send a flood of overseas investors ready to throw their money at ‘B-League’ or National Premier Leagues clubs.

But it does inherently create potential upside in investing in the secondary tiers of Australian football, particularly for local investors.

We have already seen in the most recent round of A-League expansions that there was potentially a lot of money left on the table by unsuccessful bidders looking for a way into Australia’s top flight.

The implementation of promotion and relegation could unlock similar pockets of value in Australia.

The addition of a domestic transfer market will also go a long way to increasing the upside of clubs in the A-League and potentially below.

Franchises Limit Upside

When discussing MLS specifically, Kalt believes one of the major obstacles facing the growth of MLS was to be the American attitude of, generally, not being as interested in watching sports that are not “the best”.

But perhaps the most interesting thing Kalt had to say about the investment value of MLS franchises is that their value was largely being grown by the expansion of the competition and the prices being paid for new licenses, dragging the value of the existing licenses up by association.

“Valuations five, six, seven years ago you had a 50 or 60 million cost of entry, which – candidly – still seems a little high given the economics of these clubs,” he said.

“But when you see these club trading at 200, 300, 400-million-dollar valuations, it’s hard for me to get my head around and I know it’s hard for a lot of people in the business to get their head around.

“I think a lot of it, historically, was justified on, ‘well, you buy in now because the next expansion franchise is going to be worth ‘y’’.

“But you’re not going to have a league with 60 clubs, so you’re running out of the ability to do that.”

This sounds alarmingly similar to the A-League, where hopes for the growth of the sport are so consistently pinned on expansion.

They might equate to growth for the value of A-League licenses and the value for the investors who own them, but it’s not enough alone to drive true value in football.

MLS’ One Big Tick

It wasn’t all bad for the MLS. Kalt had to give credit to the MLS for at least one thing.


“The amazing thing that they’ve done is that they’ve created the infrastructure for soccer in the United States that never existed before.

“They’re not just sticking teams in and hiring a bunch of over the hill stars and having them play in football (NFL) stadiums and hoping they can sustain it.

“They’re doing the right thing and the league is sustainable, whether at half-billion-dollar franchise valuations is a more debatable proposition.”

This is a crucial lesson for the A-League.

Over 15 years into this journey and there remains embarrassingly little football-specific infrastructure.

There has been some good ground made in recent years by some clubs, but overall, after 15 years one gets the feeling there is very little to show for all the investment made in the A-League.

We’ve had some great seasons, some great matches and some great players grace the league…but if the league collapsed tomorrow, what proof would there be that the A-League and its clubs actually existed?

This has to be urgently addressed.

Gratification Bonus

Another reason cited as key for both Kalt and Johnson in their investment in European football was the sense of gratification of investment in clubs and their surrounding communities.

Now let’s not get carried away. No one is suggesting for a second that these investors aren’t backing in European football for humanitarian reasons.

They’re in it because they see value in their investment.

But can they make themselves feel good about making money in the process?

Well, that’s a bonus. The benefits for the community, however, can be very real and tangible.

Research from 2019 shows Manchester City’s involvement in the title chase with Liverpool was worth £220 million to Manchester’s economy.

According to the think tank Centre for Economics and Business Research (CEBR), spending on match-day tickets, merchandise, and hospitality can boost a city’s economic growth by 1.1 percentage points.

At the lower level, Ipswich Town co-owner Johnson felt there was a great sense of satisfaction to be taken from investing in the surrounding community.

“It’s critical to be engaged with the community,” he said.

“I view [these clubs] as beacons. In England, these communities live and die by the success of these clubs and it’s been painful for these fans have been watching this beautiful asset punch below its weight class.

“It’s not just enough to win, you have to try and make improvements broadly.”

A big part of Kalt’s model was being able to choose clubs with room for improvement because it would be easier to keep the fans onside as things improved.

“Coming into a club that is perfectly run as the next owner is not a situation I would ever want to be in,” he said.

“You want to come into a situation where there’s headroom … you want to have some goodwill built in.

“We’re going to stabilise this, and you know your club is going to be around in a year.”

The question for Australian football is, how do we create value and the feel-good factor around our clubs that encourage the investment they require?

Matthew Galea is a sports journalist with Soccerscene. He reports widely on football policy and industry matters, drawing on his knowledge and passion of the game.

Australian football legend Gary Cole: “This is a wonderful time for the Socceroos and the Matildas”

World Cup

With the Socceroos having achieved a fifth straight FIFA World Cup qualification for the 2022 edition set to be held in Qatar, Soccerscene chatted with Australian football legend, Football Victoria Hall of Fame inductee, and Football Coaches Australia Executive Committee member Gary Cole to touch on the significance of the occasion and where Australian football goes from here.

Gary Cole

How momentous of an occasion is this qualification?

Gary Cole: It’s probably not quite as big as qualifying for the first time in ’74, and then going back in 2006. Because they were from huge periods of not going – this is the fifth time in a row now. I think given how tough this qualification has been on the coaching and playing staff – with COVID quarantine, isolation and playing 16 out of 20 games away from home – it’s a remarkable achievement. And all power to Graham Arnold, his coaching team and the playing group that’s been there over the journey. It’s been Australian Socceroos being proud to wear the green and gold and doing everything they could to get us to another World Cup.

With yourself being such a significant part of Australian football’s history and now being a part of Football Coaches Australia, what’s it like for you seeing Graham Arnold reach what appears to be a definitive moment in his journey so far?

Gary Cole: Arnie’s been a wonderful servant of Australian football for such a long time now as a player and then as a coach. In his role as Socceroos coach, he jumped in to get the group to the Olympics and was doing two jobs during COVID.

In his time as a coach, he’s been incredibly giving to not just other Australian coaches and Football Coaches Australia, but coaches in general. He’s been battered from pillar to post, because not every soccer fan in Australia is a Graham Arnold fan. To think there were some people talking about not wanting to see Australia qualify because Graham would get his just desserts, well the just desserts for Graham are the fact that the team did qualify.

You couldn’t wish for success on anyone more than Graham. It’s no different from Ange doing what he did the last qualifying campaign through essentially the same process, albeit without COVID. I just can’t speak highly enough of the man and the way he’s carried himself throughout all of this. Most people didn’t know that he spent time in quarantine in a hotel by himself and was the only guest at the hotel. He moved to the UK and stayed at his grandma’s place to be around the team when people were locked down. Then he got hung, drawn and quartered because he dared to take his dog out for a walk. It is just fantastic to see, and I know how much it’ll mean for Graham as well. There’s a great joy in it for every soccer fan in the country, I think.

Socceroos Vs Peru

It’s pretty remarkable that the 2022 World Cup in Qatar will see the Asian Football Confederation represented by a record six national teams – Qatar, Saudi Arabia, Japan, Iran, South Korea and now, Australia. What do you think that signals about Asian football and where it’s at?

Gary Cole: I just think that there should be a red flashing light and a siren sounding the alarm if we needed that. We moved into Asia with the golden generation team and the region was in awe of our players playing in the Premier League. And even going further back than that in the 70s and 80s when I played, the Asian players have always been technically good but physically we were strong and could intimidate, and we won a lot of games in Asia that way.

Now of course the investment in Asian football, and not just the ‘big six’ but across the entire depth and breadth of Asia, has been heavy because in most of the countries it’s the number one sport. There’s been heavy investment into player development, coaching development and facility development, with a growth in players, coaches and administrators and because of where football is in Australia, we just haven’t seen that same level of investment and the truth is that they’ve caught us up. And many of them have gone by us.

Countries like Thailand and Vietnam have proved that on any given day they can beat us as well, because their investment in football is there. It’s fantastic for the region because we went into Asia and we wanted to have that regular contest, we didn’t actually think that would mean it would be harder for us to qualify. Because it’s not proved a whole bunch easier. But it is great that at all levels we get that regular competition and we can continue to grow our game and get better across all levels of it, if we’re going to be successful in Asia going forward.

With the Socceroos qualifying for the World Cup this year and the Matildas set to co-host a massive Women’s World Cup next year with New Zealand, it seems like there’s a lot of positivity in Australian football currently. How do you think the game’s leading stakeholders and authorities can capitalise on this moment?

Gary Cole: If you look back in our history, one of the most significant challenges we’ve had is that we’ve been divided. For some reason we find it incredibly difficult to get on the same page. This is a wonderful time for the Socceroos and the Matildas. We’ve got Trevor Morgan and our under 23s in a semi-final against Saudi Arabia in the AFC U-23 Asian Cup as well.

There’s so much happening with our national teams, men and women. If we can get more people on the same page then the game is going to be better for it. It will continue to grow and go up but we sort do that begrudgingly with an anchor around our neck. Watching the Socceroos game yesterday, how good were those Peru fans? And what you know is that’s a country where, I’m sure they don’t agree on everything, but when they come together and they put on that red and white it means so much. Wouldn’t it be immense in five or even 10-years’ time that’s the football culture that is developing here in Australia? That only comes from being on the same page.

“Don’t sign a new contract with Everton because Fergie is after you” – Jack Rodwell’s date with destiny

In May 1964, Everton FC arrived in Australia as reigning English champions but it took forty six years for the club to return Downunder in 2010.

On that tour, a young England starlet, Jack Rodwell’s life changed forever when he met his life partner at a charity dinner in Sydney, attended by the Everton squad, including Tim Cahill.

It was no coincidence that the father of his wife, Alana, Rene Licata, was the former Marconi and Australian youth striker who delivered that famous cross for Frank Farina to level the scores at 1-1 in the opening match of the World Youth Championships in Mexico City, 1983 in front of 110,000 spectators at the Aztec Stadium against the home team Mexico.

Licata had worked in conjunction with Cahill to organise the charity event and if Alana hadn’t attended on the night, Jack Rodwell would never have called Australia his second home.

Notably, before he signed an extension to his Everton contract in 2010, Rodwell heard the whisper that Alex Ferguson was keen to sign him for Manchester United but rather than take the risk of missing out altogether, he signed on the dotted line at Goodison Park.

Rodwell was regarded as ”the Next Big Thing” early in his career but a spate of injuries and indifferent treatment by football managers have hampered his progress. When the opportunity presented itself to come to Australia in November 2021 to play for the Western Sydney Wanderers, Rodwell grabbed it with open arms.

At the moment, Rodwell is a free agent but is considering his options as he waits for the Wanderers to offer him a new contract for the 2022/23 A-League campaign.

In this interview with Roger Sleeman, Jack Rodwell talks about his life in English football, the highs and lows of his professional career and impressions of the A-League.


You were signed by Everton at a young age, but was Liverpool ever interested in you?


Strangely, my Dad was a Liverpool fan but I was signed by Everton as a seven year old.

Prior to this, my brother and I received free tickets from Everton and we went with my Dad to their home games.

I had gone to Liverpool when I was nearly seven years old but they said you’re a bit young so come back next season.

Ironically, Everton saw me play two weeks later and told me go to the Belfield training ground one night per week and I was asked to stay.

R. S.

In May 1964, Everton arrived in Australia as the reigning England champions.

Are you familiar with former stars from that squad like Jimmy Gabriel, Ray Wilson, Roy Vernon, Alex Scott, Alex Young, Gordon West, Derek Temple and Brian Labone who were part of that touring squad.


I’m only familiar with Brian Labone, the great Everton and England central defender, who was a household name at the club.


What are your memories of Everton’s tour of Australia in July, 2010?


We landed in Sydney, went for a jog on Bondi Beach and put our feet in the water which was like an ice pack .

A few days later, we played Brisbane Roar, followed by Melbourne Heart and Sydney FC.

I was fortunate to play in all three games and scored in two of them which was a great boost for me to get into the first team.

In the previous season, I wasn’t playing regularly in the first team so this tour was an important preseason for me.

Jack Rodwell – Image supplied


There were some pretty impressive players in that squad.

Your comments on some of them.


Louis Saha, the French striker was one of the best I’ve ever played with and he was crazy, fast and had two good feet.

Phil Jagielka, former England defender, was not big but strong and fast. He came to the club as a central midfielder but often older players are relegated to the backline.

Distin was massive, like a beast to opponents and was so strong in his gym workouts.

Phil Neville was an inspiring captain who looked after the younger players which I was always thankful for.

Ken Hibbert was a local product who was one of the best fullbacks going forward and a great tackler.

Tim Cahill was a great man to have in the dressing room as he always gave 100% and was the first man on the team sheet.

Manager, David Moyes was brilliant for me and after I came into the squad as a centre back, he converted me to a holding midfield role because he preferred old heads in the centre of defence.


Do you regret not waiting for the call from Sir Alex Ferguson before you signed that contract extension with Everton in 2010?


Somebody had said ,” Don’t sign a new contract with Everton because Fergie is after you”.

However, my parents advised me not to risk it as they thought he could always sign me from Everton.

Also, I wouldn’t have met my wife if I hadn’t toured with Everton in 2010.


What was the background to you signing for Manchester City in 2012 and tell us about your experiences.


I was in a preseason camp in 2012 with Everton and the club was contacted by City who wanted to sign me.

Roberto Mancini was the manager of City at the time.

It’s a great club but I sustained a series of hamstring injuries which prevented me from playing many matches .

However, I played in the 2013 FA Cup Final when we were beaten by Wigan.

Before the Cup Final, I had a meeting with Mancini and David Platt to discuss my future at the club after I had scored two goals in the last game of the League season.

Unfortunately, Mancini was sacked at the end of that season and Brian Kidd was appointed as caretaker manager before Manuel Pellegrini took over into the start of the new season.

I didn’t receive any favours from Pellegrini as he brought some South American players in and he also excluded Joe Hart, Jamie Milner, Mika Richards and Scott Sinclair.

I was forced to leave the club , even though we won the League and I received a winner’s medal.


Your next club was Sunderland.

Can you relate your experience there?


I was still only twenty three at the time and Gus Poyet was the manager who just wanted me to play games.

In the first two years, we were in the EPL .However, we were relegated to the Championship the next season and as the highest paid player, they did everything to get me off the wage bill.

I wanted to play in the EFL, not the Championship, but instead of showcasing me in the shop window by playing me, they attempted to move me out of the dressing room to find a club.

I wanted to play but they wouldn’t even allow me to train so I had another season on the same salary.

Manager, Chris Coleman was asked,” You’re losing games ,so where’s Jack”?

He then put me in the reserve team and we were relegated to League 1 in my fourth season.

I finally left the club in June, 2018 when my contract was terminated.

Jack Rodwell
Jack Rodwell in form for Western Sydney Wanderers


What led to your decision to come to play in the A- League with the Wanderers in November 2021, and what did you expect of it?


I hadn’t played for nine months before coming to Australia so I was very keen to give it a try after Carl Robinson approached me.

I wasn’t too familiar with the A-League, apart from what my father-in-law had told me.

I just wanted to play regularly again.


What was your relationship with Carl Robinson like, and was he treated unfairly by the club?


I knew about his playing record with Wolves so he had a good pedigree but when you start losing, the fans start to whinge and blame the manager.

It’s not that we didn’t have a good squad according to the local experts but as results became worse, the club decided to relieve Robinson from his position.


What were your thoughts on the strength of the Wanderers squad last season and should you have done better?


In Dimi Petratos, Steve Ugarkovic, Tomer Hemed, Adame Traore, Keanu Baccus, Bernie Ibini, Terry Antonis and Rhys Williams we had seasoned campaigners.

Williams injury early in the season was a great loss to the team but we still had enough depth in the squad to perform more consistently.

In several matches we were dominating in the first half but took our foot off the pedal in the second to let opponents back into the game.


Do you feel Mark Rudan needs more time to achieve his plans for the club and were you happy with his coaching philosophy and management?


He definitely needs more time after taking over the role well into the season.

Also, a lot of players are out of contract and he will want to build his own squad for next season like he did at Wellington and Western United.

He has a good grasp of the game from his extensive playing and coaching experience so hopefully next season will be fruitful for him.

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