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U.S. Investors Buy Stake in German Football Club Kaiserslautern

U.S. Investors Buy Stake in German Football Club Kaiserslautern

A U.S. consortium will buy nearly 10% of German football club FC Kaiserslautern, marking a rare entry by an overseas group into the country’s tight-knit sports world. 

Investors affiliated with Paul Conway’s Pacific Media Group agreed to acquire a stake in the team, Kaiserslautern said in an emailed statement Tuesday, confirming an earlier Bloomberg News report. The deal has been approved by Kaiserslautern as well as its majority owner and regional investors, according to the statement. 

Conway teamed up with Chien Lee, Michael Kalt, Krishen Sud and Randy Frankel for the bid, people with knowledge of the matter have said. The U.S. group will act as a strategic international partner for the club, Kaiserslautern said in Tuesday’s statement. 

American financiers have been making a big push into European football, with Miami-based investment firm 777 Partners LLC and digital entrepreneur John Textor both recently buying stakes in Belgian teams. So far, they’ve mostly stayed away from German football, where strict ownership rules and fans’ resistance to wealthy owners have kept foreign money at bay.

Kaiserslautern competes in German football’s third division. The club boasts a more illustrious past, having won the Bundesliga championship in 1998 with a team that included Michael Ballack, who went on to play for both FC Bayern Munich and Chelsea FC.

With capacity for almost 50,000 fans, its stadium is much larger than many of the other lower-league European clubs owned by Pacific Media. These include Barnsley Football Club in England, KV Oostende in Belgium, AS Nancy Lorraine in France and Esbjerg fB in Denmark. Pacific Media adopts a data-driven approach to sport management and performance at the clubs it owns. Conway has partnered with Lee, Kalt and Frankel on football deals in the past.

For years, Kaiserslautern has been struggling to secure funds to pay debts and continue its push for promotion back up the German leagues. It will next month play FC Saarbruecken in a game that will be crucial to its promotion chances. The match is expected to draw a crowd of about 40,000, a person with knowledge of the matter said. In 2020, a group of local investors acquired 33% of Kaiserslautern for about 11 million euros ($12.1 million).

As things stand in Germany, the so-called 50+1 rule prevents a commercial investor from holding more than 49% of voting shares in any club in the country. The edict has been credited with keeping wage bills and ticket prices in the country low compared with other major European leagues, where super-rich investors have poured millions into buying players and presided over rising costs for fans.

Still, more U.S. investors are looking for a way into German football and a number of its teams are opening up to the possibility of external money. Conway said in an interview last year that the style of play adopted by German clubs was a good fit for his firm.

©2022 Bloomberg L.P.