Wednesday December 6, 2023

Investors Dive Into Soccer’s Lower Tiers, Eye Untapped Market Potential

  • North Sixth Group is founding a multi-club ownership group called Club Underdog.
  • The group is adding Swiss side FC Locarno to a portfolio containing Italian sides Campobasso FC and Ascoli FC, as well as American expansion team Brooklyn FC.
An FC Locarno player goes up for a header during a soccer game.
FC Locarno
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The multi-club model is becoming increasingly popular in modern soccer.

City Football Group has dominated the English Premier League through Manchester City for years and is now spreading that influence in top leagues around the world. 777 Partners boasts big-name clubs in global top-tier leagues and is close to acquiring historic EPL side Everton.

But for all of the glory of acquiring some of the sport’s most storied clubs, North Sixth Group chairman Matt Rizzetta believes that there’s glamor — and value — in doing the opposite.

North Sixth Group is founding Club Underdog — which specializes in buying and investing in clubs around the world in soccer’s lowest tiers. 

“We hadn’t seen a whole lot of [groups] do what we have been doing, which is taking on these underdog clubs,” Rizzetta tells Front Office Sports. “Lower tier, lower downside risk, high upside, high potential for marketing.”

Club Underdog’s inaugural portfolio includes Italian side Campobasso FC, which first made headlines last year with the announcement that media personalities Kelly Ripa and Mark Consuelos had joined their ownership group. Campobasso were promoted to Serie D, the fourth tier of Italian soccer, in their first season under the new ownership.

Club Underdog owns a minority stake in Serie B side Ascoli FC, and in the United States, is founding USL League One club Brooklyn FC.

Its latest addition to the ownership is FC Locarno, located in the eponymous city in Switzerland near the Italian border. 

In its history, Locarno played several seasons in the top tier of Swiss soccer, but were placed into administration after going bankrupt in 2018. They were automatically demoted to the ninth tier, where they were purchased by a local veterinarian, Mauro Cavalli, who stewarded the club to four straight promotions. 

When the needs of the fifth tier became too demanding, Cavalli sold to North Sixth for an undisclosed sum. 

“Just speaking openly and transparently as it relates to our group, I’m not sure Switzerland as a one-off transaction, to us, would make sense,” says Rizzetta. “In part of the multi-club approach, Switzerland is very strategic for us and it plays a very important role.”

Locarno, in particular, have high upside because of a Swiss hierarchy with room for growth (the owners of LAFC just bought a team in Switzerland’s first tier), and given the proximity to Italy can also serve as a proving ground for Campobasso and Ascoli players.

While Club Underdog will obviously want to put forth a winning product, Rizzetta believes that the city of Locarno is on the verge of becoming a major tourist destination — which will only benefit his team.

“If you fail on the sporting side, you’re going to fail on all other aspects of the investment,” Rizzetta says. “But if you can get the sporting side right, there’s so many other things you can do.”

He points to Wrexham AFC — famously owned by actors Rob McElhenney and Ryan Reynolds — who not only earned promotion to the English Football League, but made a hugely popular docuseries while doing it.

Campobasso are already experiencing similar success: The club secured a merchandising deal with Adidas and is pushing for its own docuseries in the coming months.

Of course, the Club Underdog model isn’t for everybody. Rizzetta acknowledges that his group’s method has a much longer timeline for success, takes on clubs that are inherently distressed, and requires a lot of hands-on care.

But following macroeconomic trends in these regions and working the model can pay off. 

Per Rizzetta, based on valuations from investment rounds, Campobasso and Brooklyn are worth $15 million and $50 million, respectively. Club Underdog is targeting a $100 million valuation in total, which takes into account existing clubs and potential future clubs.

Rizzetta says that one of Europe’s fastest-growing economies is in Poland and that it has great player development programs. Uruguay produces some of the highest-value players from South America behind only Brazil.

Then there’s the elephant in the room: “If you’re doing a multi-club strategy, it’s hard to ignore England,” says Rizzetta.

Given the enormous growth of the women’s game in America, Club Underdog is also planning to found a women’s club to complement Brooklyn FC in the coming years. 

In every case, these clubs will be fighting their way to the top.

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