Gerard Pique (Kosmos Holding) and David Beckham (Inter Miami FC & Salford City) have recently attracted media attention thanks to high profile football investments. There are however numerous examples of athletes investing individually or as a collective (e.g. One Team Collective) across sports, media and technology.
Booming broadcasting revenues have led to a rapid growth in athlete salaries. For example, as per Sporting Intelligence “Global Sports Salaries Survey”, the average annual pay of a FC Barcelona player has increased from approximately GBP 4m in 2010 to almost 10m in 2019. As a result, top athletes have become increasingly interesting potential partners for start-ups and venture capitalists (Venture Capital & Investment in Sport).
This post reviews the off pitch ventures of Spanish all-time record scorer David Villa which, structured under DV7 Group, represent a strong bet on football’s growth in the USA.
DV7 Group businesses include a network of youth academies (DV7 Soccer Academy), athlete management and sport marketing agencies (VOS USA and Vii Sports), a creative/media agency (Designated Player) and a soon to be launched professional team (Queensboro FC), thus building a holistic football ecosystem with numerous potential synergies (see DV7 Pathway below)
DV7 Soccer Academy
DV7 Soccer Academy is an international network of youth football academies operating in the United States (New York and San Diego), Canada, Puerto Rico, Dominican Republic, Spain (Asturias), Hong Kong and soon in Japan (Tokyo).
Headquartered in New York and founded shortly after David Villa’s arrival to MLS in 2015, DV7 Soccer Academy offers high-performance programs, development and school programs as well as football camps and clinics. Similarly to the international academy network established by top clubs, the academy offering consist of a combination of programs targeting both young amateur players (i.e. a stronger commercial focus) and youth talent (i.e. high performance focus).
DV7 Soccer Academy’s growth has been largely driven by the development of cooperation agreements with local clubs, tailoring the service provided to the specific needs of each club and market and retaining a high degree of flexibility as a business. Club-branded academies, for example, are more restricted in this regard due to brand protection concerns.
The group’s academies in the USA are the best example of this approach. DV7 New York academy offers a full range of programs including U7-U13 teams competing in the NY Club Soccer League. Meanwhile, in San Diego, DV7 Soccer Academy partnered with local club Chula Vista Futbol Club to field a 2007 team in the US Soccer Development Academy, the (until very recently) top youth soccer league in the USA. On the other hand for example, in Hong Kong the DV7 team is in charge of managing the youth academy program for top-tier club Kitchee SC.
As a result of such approach, the location and offering of DV7 academies seem to result from the pursuit of both strategic and tactical business opportunities. However, overall market trends, the strength of David Villa’s brand in the USA and the country’s pay-to-play youth system suggest that DV7 Soccer Academy is arguably best positioned to benefit from the growth of football in North America.
VOS USA
Shortly before David Villa’s move to FC Barcelona, the striker appointed former Valencia FC Marketing Director Victor Oñate and his agency VOS Marketing to manage his career on and off the pitch. A few years later, the close-knit relationship between player and agent and Villa’s move to MLS led to the creation of VOS USA, now under DV7 Group.
The New York-based agency provides athlete career and image rights management services and, leveraging the relationships established during Villa’s stint in MLS, now represents a number of players, mostly US-based (e.g. including three New York City FC players), as well as Argentinian LA Galaxy manager Guillermo Barros Schelotto.
Interestingly, a similar approach has been recently followed by Sports & Life, the agency representing Villa’s former teammate Andres Iniesta. Shortly after the move of the Spanish play maker to J.League side Vissel Kobe, the agency set up a base in Japan and has recently added Iniesta’s teammate Kyogo Furuhashi to its client portfolio.
Agencies’ profits are largely driven by commissions on player salaries and transfer fees. In the North American market, however, average salaries are still far from those of major European leagues or neighbouring Liga MX and transfer fees are still a rarity rather than the norm. However, market trends paint a brighter future.
MLS’ player salaries continue to grow, with minimum salaries to increase from US$70,250 in 2019 to US$109,200 in 2024. As a result, the league is becoming an increasingly interesting destination, and potential springboard, for South American talent. Recognising the footballing quality and the potential transfer proceeds that such players would bring to the league, MLS latest regulations have been drafted to incentivize investment in young talent.
No overnight success should be expected but, given the uniqueness of the market (e.g. drafts, college system, salary caps, no inter-league transfer fees), those establishing now a strong network and a deep understanding of the system will surely have a competitive advantage as North American clubs start playing a more active role in the international transfer market.
Vii Sports
Vii Sports, a sports marketing and athlete management agency led by former Valencia CF Marketing Director Damia Vidagany, is the most recent addition to the DV7 Group family. Publicly available information on Vii Sports is limited but, at a first glance, the Valencia-based agency seems to offer a similar set of services to those of VOS USA while also leveraging Vidagany’s expertise to support DV7 Group operations from Spain.
Designated Player
Designated Player is DV7 Groups’s creative media agency and another proof that investing in a new media businesses has also become a natural step for athletes. Gerard Pique’s Kosmos Studios and David Beckham’s Studio 99 are also examples of this trend.
Football stars themselves require a constant feed of content for their digital channels. So do most public-facing businesses nowadays. It seems therefore logical for those managing multiple ventures to not only bring content creation capabilities in-house but also leverage them to provide services to third-parties.
In line with the group‘s businesses, Designated Player – which has already worked for high-profile clients such as Telemundo, Pepsi, The Players Tribune or Laureus – aims to leverage its access to athletes, brands and personalities in the football industry to become “the bridge between the American entertainment industry and the global planet of fútbol” as defined by the agency itself.
A brief analysis of Designated Player’s content output suggests the company initially aimed to build its own digital community. However, delivering the constant quality feed required to build a large follower base is difficult and extremely expensive and the monetization of video content on social channels is not straight forward.
The agency’s recent partnerships with NGL collective or collaboration with Mexican new media channel Cracks (4.8M Youtube subscribers as of March 2020) suggest an acknowledgement of Designated Player’s reach limitations as well as a focus on the Latin community in North America. In the case of NGL collective, for example, the partnership will “combine NGL Collective’s massive media scale as the #1 Latinx digital entity, with Designated Player’s original and diverse soccer content tailored to U.S. Latinx”.
The fast-changing digital media landscape is increasingly competitive and barriers to entry are lower than ever. In this regard, Designated Player differs from other DV7 Group’s businesses (e.g. DV7 Academy, VOS USA) where a privileged global football network ensures a significant competitive advantage. As a result of this unique set of challenges, identifying and nurturing the right strategic partnership will be key to the success of the business.
Queensboro FC
In November 2019, United Soccer League (USL) announced the launch of Queensboro FC (QBFC), a Queens-based (New York) expansion franchise led by David Villa and businessman Jonathan Krane.
USL operates three divisions (Championship, League One and League Two), occupying the gap below MLS in the US football pyramid. From 2021 QBFC will compete in the USL Championship, i.e. USA’s second tier, albeit with no possibility of reaching MLS through sporting merit (no promotion/relegation system in place).
While no deal financials have been disclosed, USL Championship expansion fees reportedly increased from USD 7m to 10m in 2019, well below MLS’ burgeoning expansion fees (reportedly USD 325m). Through lower franchise fees, a lower cost base (at the moment of writing no minimum player salary) and a cost-effective approach to youth academies, USL presents a lower-fee opportunity for investors willing to enter the growing North American football market.
It should be however noted that USL broadcasting revenue is still in the low seven-figure range, as reported by The Athletic, and does only ensure minor distributions for each club given the large number of teams across the league’s three tiers. Therefore, in the mid-term QBFC income will depend exclusively of its sponsorship and ticketing operations.
In this regard, Queens is considered an attractive market with significant potential thanks to its ethnically diverse population of 2.2 million. New York is however already an extremely crowded entertainment market and home to three football clubs, NY City FC, NY Red Bulls and NY Cosmos. It will be critical for QBFC to tap into the borough’s identity and establish a close connection with its community and businesses.
In line with the league’s approach, QBFC will build a new modular 7,500-seater stadium at Queens’ York College which is expected to meet the clubs’ needs for regular matches (USL Championship average attendance in 2019, 4,476). High profile matches will be played at also Queens-based New York Mets Citi Field Stadium and the ownership group has also discussed the possibility of building a football specific stadium in the development area, adjacent to Citi Field. Such an investment however is likely to be evaluated only at a later stage.
In line with DV7 Group’s overall strategy and focus on grassroots, QBFC has stated its ambition to develop the club’s youth academy. In this regard, QBFC will benefit from the league’s collective effort. USL has identified talent development as a key strategic priority and has recently announced the creation of its USL Academy league. Teams will compete with a U19-U15 squad while attracting talent from a network of affiliated youth clubs, ensuring operations are run on a cost effective manner.
Football never had it easy in the USA, let alone lower league football, but market conditions have never been this favourable. Fast-growing interest in the sport will be fuelled by the upcoming 2026 World Cup on home soil. The allocation of MLS’ latest expansion spots is likely to drive investment further down the pyramid, primarily towards USL. No quick wins here but a good outlook shall QBFC be in it for the long haul.