Owning a sports team isn’t just for billionaires anymore. There are lots of opportunities for reasonably wealthy individuals who want to get in on the game
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More than the dollars and cents, what itches at him most in hindsight are the bad business bounces that preceded the team’s sale. For example, a new arena on the campus of Arizona State University was proposed, but did not get built under the Albertans’ regime, and then there was the 2015 NHL draft lottery when Connor McDavid became an Edmonton Oiler, not a Coyote.
With a dash of luck and a new arena, Saxberg believes he would still be an NHL owner. As it is, he has plenty of money, but not the billionaire sums required to buy into the big leagues these days.
“Don’t tell my wife, but I still wish I owned the Coyotes,” he said. “It is every kid’s dream.”
But like a good grinder, Saxberg kept digging, and he discovered there are lots of other opportunities and other teams on the lookout for reasonably wealthy individuals who possess a love of sport, an appetite for alternative investments and, importantly, a capacity to write big cheques, such as the one the Calgary oilman scratched off this past July when he plunked down $500,000 to become a minority part-owner of SC Preussen Münster.
Never heard of them? It’s a German second division soccer club, whose chief executive, Markus Sass, happens to be a Detroit Red Wings fan, not to mention a fan of North Americans with deep pockets.
Some team owners are faceless, soulless, but not clueless corporate entities that are invested in the belief that franchise valuations across the five North American big leagues seem on a skies-the-limit valuation trajectory.
Case in point: the Coyotes that the Albertans bought for US$225 million are now the Utah Hockey Club and cost the team’s current owner, technology baron Ryan Smith, US$1.2 billion to acquire.
Fun, games and financial gains
“There’s a lot of North Americans looking for sports investment opportunities overseas,” Bob Malandro, the founder of Whitecap Sports Group, a Florida-based sports investment banking firm, said.
The New Yorker’s elevator pitch is that his firm, which has been around since 2016, buys and sells sports teams and percentages thereof. These deals happen all the time, according to Malandro, and they typically fly beneath the radar and are bound by non-disclosure agreements unless a celebrity is involved and a franchise sees value in making a splashy announcement. His typical client is a high-net-worth individual or family office in the market for an alternative asset to round out their portfolio.
“In many cases, there’s a little more risk involved with these types of investments, but there’s certainly more reward — potentially,” he said. “The ideal scenario is the investor has some fun with the asset. You know, they feel like they are involved in the club, even if they’re a small minority stakeholder, and they get to enjoy it on different levels, and not just financially.”
Once upon a golden age, Münster, which is majority owned by the community, delivered plenty of thrills to its fans. Founded in 1906, the club stood alongside the glitterati of German soccer and captured the 1951 national championship before gradually sliding into competitive irrelevance.
That long narrative of decline has lately shifted to one of renewed hope, both on and off the field, as Münster has played its way up the ranks from Germany’s fourth tier to a place in the second division.
The novel twist in a regional feel-good story — given the tradition-governed landscape of German professional sports in which the idea, briefly floated, of auctioning off a slice of soccer’s broadcasting rights to a foreign equity firm sparked national protests — is that a group of 16 North Americans, which includes CEOs, Wall Street wheelers and dealers, a dentist and a former oilman, now own 30 per cent of a second-tier soccer club in a picturesque German university city that 99.9 per cent of their family members had never heard of prior to them making the investment.
“Like most good ideas, investing in the club was a plan hatched over a beer in my German cousin’s backyard,” Nick Semaca, a former director of McKinsey and Co. and now part-owner of Münster, said.
He retired in his 50s to do what he really wanted to do: buy a minor league baseball team. The Joliet Slammers were a money loser that the 66-year-old turned into a money-maker and recently sold for a “comfortable” return. (The new owners also include funnyman Bill Murray).
Semaca turned his attention to German soccer in 2022, and with the help of his German cousin, Ulrich Linnebank, who is a lawyer and a University of Münster alum, they did what due diligence they could prior to him emailing the club’s chief financial officer to discuss the possibility of investing.
“Why us?” the CFO replied.
Hot properties
The hottest sports properties among North American investors in 2024 have been North American soccer teams generally and women’s sports specifically, according to Malandro.
The 2026 World Cup is coming to the continent soon, while the WNBA has Caitlin Clark, a once-in-a-millennium talent, to help sell its game as well as a new franchise in Toronto bankrolled by billionaire Larry Tanenbaum of Maple Leafs Sports & Entertainment Ltd. fame to look forward to in 2026.
But Europe is a different and arguably more attractive beast for those with a little surplus cash. Even soccer clubs that have fallen on hard times have a history that is often reflected in the present day by a strong community connection and a rabidly loyal fan base.
For example, Münster’s fans prefer standing at games over sitting. Win or lose, they start singing before kick-off and don’t stop until the final whistle. Contrast Münster to the good old hockey game, where fans rise for the singing of the national anthems, but may or not join in with the scoreboard prompt to kick up a round of Stompin’ Tom’s The Hockey Song.
European clubs are also located in, well, Europe, in cities such as Münster, which is a pretty enough spot, but also less than three hours from Amsterdam, a not-insignificant geographic selling point that may resonate more to an investor than buying a piece of a C-list North American expansion soccer team playing in a D-list league in a run-of-the-mill faceless American suburb.
Münster plays one step below the Bundesliga, home to global soccer giants such as FC Bayern Munich. Clubs in the second division can wind up competing against the big guns if they play their way up the ladder as well as in league-wide tournaments. However remote, reaching the big leagues is an intoxicating possibility, but that’s not the reason the North Americans bet on Münster.
The city of 300,000 is cut through with bike paths; the streets are devoid of litter; the pedestrian-only town square appears pulled from the glossy pages of a travel brochure, with cobblestones underfoot and soaring church steeples towering above; unemployment rates are low and personal incomes are high; and, as self-reported by the locals, people are happier here than the national average.
That sunniness shines through in conversation with Markus Sass, Münster football club’s 42-year-old managing director. He loves his soccer, yet, unlike most Germans, the game that hooked him in as a kid was hockey, a passion that stirred a childhood fascination with Canada that he pursued by spending an eight-month stint as a student at Western University in London, Ont.
“I became a fan of the Red Wings because I liked the team’s crest so much, but I don’t really have time to follow hockey anymore,” he said.
He has been too busy with other things, including becoming a new father and finding North Americans to invest in Münster, an idea he credits Semaca for bringing forward and helping to execute.
Following his initial query note to the team’s CFO and the bemused reply, the New Jersey native explained that his interest in the club wasn’t entirely out of left field. His German cousin was also keen to invest and his mother had been born in a nearby town. Being a good McKinsey alum, he had also done some homework before any money changed hands.
“People look at sports investments and they will say, ‘Oh, is it your hobby, is it something to do for fun?’” he said. “Look, if I wanted to do something for fun, I could just buy a damn season ticket, OK? And so I look at it as a business, because unless you are from the royal family of Qatar or the Saudi private investment fund, looking at it otherwise just doesn’t make sense, and I would argue if you don’t run a sustainable business, eventually, something bad is going to happen.”
His point? There is a lot of potential business on the horizon in Münster.
The city is building the team a new, $130-million stadium to replace the relic that is there now and increase the seating capacity to 20,000 from 12,000. The new building will feature premium seats, plenty of standing room for the diehards and tasty grub, and offer advertisers more opportunities to interact with fans, both in-game and digitally, while generating substantially greater revenues than the current building.
“Our stadium today is really, really uncozy; it is like an antique,” Sass said. “And this is why we cannot compete budget-wise with clubs with more modern stadiums, because they make, like, five to six million euros more than us just in gate money.”
People look at sports investments and they will say, ‘Oh, is it your hobby, is it something to do for fun?’
Nick Semaca, part-owner of Münster
Money is king in German professional soccer since money allows a team to buy better players. There is no salary cap. The higher a team finishes, the greater the payout percentage from broadcasting deals, and the greater the odds that the team’s valuation increases. Münster is currently worth about $20 million. Teams at the top of the second tier have values closer to $90 million.
Having a team on the rise, a community-funded stadium coming in 2028, a loyal fan base, 120 years of history, an affluent local population, a major anchor sponsor that is also a major local employer, and a surrounding region where Münster is the only professional soccer game in town — and a cousin nearby to keep an eye on the proverbial store — was enough to sell Semaca on an initial buy-in. He has since upped his ownership stake in the club and started planning more trips to Europe from his Chicago home.
“It has been a lot of fun so far,” he said. “None of us have gone in there and been writing million-dollar cheques; it has been more like, ‘Let’s dip a toe in the water, and let’s see what happens with this thing.’”
The perks also flow in both directions.
Sass said the injection of North American capital was necessary to help modernize the team’s operations, invest in digital infrastructure, recruit best-in-class employees and have some spare cash on hand to spend on players as the team entered its first season of division two play.
Along with the money has been the added brainpower the investors bring to the mix. Sass is mid-career, while both Semaca and Saxberg have been there and successfully done that in business and the business of sport. In other words, they know some things, their ideas and input are welcome, and Sass said he is beyond grateful for the mentorship.
But the beauty in the arrangement for the Germans is that the ideas, good, bad or otherwise, that the investors float forth can be adopted or completely ignored if they don’t resonate for whatever reason. Under German soccer’s so-called 50 per cent plus one vote rule, a club’s members, a.k.a., the thousands of regulars who pay an annual due of around $200 and elect a board to run the team, which operates as a non-profit with a for-profit business arm, have the final say over any decisions.
“Culturally, there have been no issues because no one single investor can come in and change the direction of the club, completely change the club’s identity or relocate it to another city, and all those things that you occasionally see happen in North American sports, that can’t happen here,” Sass said.
“People have been very relaxed about the foreign investors coming in because they have no say, but they do bring money, and that’s the best combination possible. It is win, win, win, as long as we can keep our promise and develop the club further.”
Buy, hold, profit
Malandro enjoys telling the story about what a club’s development can mean for the patient investor. All leagues, even the NFL, were, at some point, startups with no guarantees, he said.
He has one client who bought a $250,000 minority stake in a major North American professional sports franchise some 40 years ago or so, when player salaries were more in line with senior executives than with Hollywood movie stars. This client was a fan at heart and enjoyed the perks of going to games for years, celebrating wins and losses alongside other bigwigs, while being in close proximity to professional athletes.
Eventually, the client relocated to a warmer clime and stopped going to games, so he called Malandro, who went to the market, found a buyer and came back to the seller to congratulate them on a US$40-million return on their US$250,000 initial investment.
“There are myriad reasons why people decide to sell,” he said. “The most common is that they have simply held the asset for quite a while, have enjoyed it to capacity and feel like the time is right to exit, given current market values. Sometimes they relocate and don’t attend games any longer or feel the same connectivity to the team. This could also be impacted by their age, and the fact that they are considering estate planning strategies.”
Back in Calgary, Saxberg is more into near-term planning. He is in his early 50s, has three young kids with a fourth on the way at home, and two adult sons from a previous marriage. Having sold the Coyotes and been priced out of the NHL, he enlisted his eldest, Graeme, to help find the next ownership opportunity in sports.
I view the investment as a long-term commitment, and the biggest thing for me is meeting and experiencing new people
Scott Saxberg
The search led to Malandro’s firm and several intriguing possibilities the Saxbergs took a pass on — a Swiss hockey team, a Major League Soccer franchise, a professional pickleball league — before Münster appeared on the radar.
Saxberg is an active mentor in the startup space and an investor in an array of small companies. He has staked renewable energy outfits, a design company specializing in health and wellness, an artificial intelligence play in the food-and-beverage industry, a maker of women’s tights and 30-plus other startups, with seed capital funding in amounts ranging from $250,000 to $1.5 million. Any one of those investments, and hopefully more than one, could grow up to be big deals, or they could go bust.
“We look at Münster almost like a startup,” he said. “The team has just moved up leagues, they are learning how to manage a larger group of investors, and they are well run and they are serious.”
Further enhancing the team’s value proposition in Saxberg’s view is the networking possibilities that being an investor affords. He is gregarious, a fan of European business culture and a networker who sees the business of soccer as potentially leading to other business.
“The team’s main sponsor is a logistics company with a venture capital arm and they invest in new technologies, so there’s a natural relationship there that, ‘Hey, I can help connect them with companies that I’m mentoring,’ because you just never know.”
What Saxberg does know is that a few years down the road, once the kids are a bit older, he wants to move the family to Münster, not full time, but for just enough time for them to gain an enriching experience and for the minority owner to catch a bunch of Münster games in the club’s new stadium, which is preferable to getting up at 5:30 a.m. in Calgary to watch them online as he does now.
“I’m learning German; it might take me five years to be able to speak a sentence, but I’m trying,” he said. “I view the investment as a long-term commitment, and the biggest thing for me is meeting and experiencing new people, and, at the end of the day, it is Europe, so what’s not to love?”