The latest team of investors to hit the football pitch are hedge funds, credit vehicles, and private equity, details an article in Bloomberg. Alternative investment firms that are awash with cash have slowly been gaining a foothold in the world’s most popular sport (called soccer for those of us stateside). The need for cash has become more acute for European clubs over the pandemic, which has kept crowds away from stadiums.

But soccer is a risky business model, from clubs riddled with debt to inflated player salaries, and returns are anything but guaranteed. An investment in European soccer is about building over the long-term, and the question for U.S. investors is whether it will ever reach the valuations of American sports franchises.

The article goes into a few ways that firms are investing in soccer:

• Buying a smaller club, as Orkila Capital did with Club Brugge, gaining a 23% stake in the club.
• Loaning money to a big club in crisis, as Oaktree Capital Group has done with FC Internazionale Milano SpA. Their current owner, Suning Holdings Group Co., has 3 years to repay the debt or the loan could turn into equity and Oaktree would gain control of the club.
• Buying multiple teams may be the best bet for making money from football. City Football Group has bundled several teams together, and U.S. private equity firm Silver Lake Management paid $500 million for a 10% stake in the company in 2019.
• Buying a stake in a league, which doesn’t depend on individual performance or the ability to score sponsorship deals. But some clubs are wary of this approach by private equity firms, fearing that the riches would only go to a top few. Still, a recent deal between U.K.-based CVC Capital Partners and Spain’s LaLiga could prove to be a watershed moment that revitalizes conversations between soccer leagues and top tier private equity houses.