Wrexham & Kings League: New models for investment in soccer
Luis García, manager of the MAPFRE AM Behavioral Fund
On Saturday, April 23, one of the highest profile promotions of the soccer season took place worldwide. And it happened in the fifth tier of English soccer. In the spotlight: Wrexham AFC, a club acquired in 2021 by two Hollywood stars, Ryan Reynolds and Rob McElhenney. Since it was bought by its new owners, the club has not stopped growing in every respect, including sports-wise.
They have, for example, their own documentary on Disney+, which shows their day-to-day life during the season from the inside. But this is not the only example of the club’s worldwide media impact. It is striking that the main sponsor of their jersey is the social network TikTok and they were included in the rest of the world section of the FIFA 22 video game teams.
In addition to Wrexham, Ryan Reynolds, the better known of the two actors, has invested in a wide range of businesses in recent years: from the alcoholic beverage company Aviation Gin to the inexpensive cell phone service Mint Mobile. Undoubtedly, the Hollywood star has managed to monetize these efforts financially.
The success of Wrexham raises the question of whether this is a new model of success for investment in sport and, in particular, in soccer. Mainly in Europe, where the potential for better management of sports clubs and their relationship with fans is, in general, much greater than in the United States. Can generating content around sport be a potentially powerful way to attract attention and boost interest that, in some cases, seems to be waning?
For those of you who follow this industry, the Wrexham story may have brought to mind another recent phenomenon, this time in Spain. I am referring, of course, to the birth and spectacular growth of the Kings League, the 7-a-side soccer competition created by Kosmos, Gerard Piqué's company, in which some of the most prominent content creators in the country are taking part as team presidents. It so happens that two key actors in this story, Alberto Bueno and Julio García Mera, have participated in La Bolsa de Deporte, MAPFRE's podcast in which we mix investment and sports topics.
The Kings League and Wrexham, far from being a threat to traditional soccer, should be seen as proof of how new technologies and forms of communication can amplify the impact of sports globally. This is yet another reason for investors to be attracted to this sector, which is undergoing a historic moment of transformation at different levels. At MAPFRE AM, we have a fund that I have the pleasure of managing which has several sports teams and companies in its portfolio and, therefore, analyzes such situations.
As we have often said, although it is often wrongly interpreted to mean the opposite, financial profitability and sporting growth (with the consequent interest for the fans) must necessarily go hand in hand and help one another. Will we see a Wrexham-like case in Spain? And in the listed markets? Exciting years lie ahead for investment in sports.