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Takeover at Dundalk FC a sign of new investment strategy in football, says expert

The recent change of ownership at Irish football league club Dundalk FC could mark the start of a new investment strategy in European football, an expert has said.19 Jan 2018

Trevor Watkins, a specialist in sports law at Pinsent Masons, the law firm behind Out-Law.com, said the deal could be a model for future investment deals across the continent.

On Thursday, Dundalk FC announced that a consortium of investors, led by Chicago-based group PEAK6 Sports, had completed a deal to buy all the shares in the club from previous owners Andy Connolly and Paul Brown. The value of the deal was not disclosed by the club".

The deal brings together a number of individuals with diverse experience across sport and business and some of who are minority shareholders in other football clubs, including AFC Bournemouth, Swansea City and Europa Point, a club in Gibraltar. PEAK6 Sports' stake in AFC Bournemouth is 25%.

Watkins, who is a former chairman of AFC Bournemouth, together with a team from Pinsent Masons' Dublin office, led in advising on the deal working with founder members to create, structure and then complete the transaction, and guiding the group in assembling the management team

"This is the first major overseas investment into an Irish league team, and is consistent with the club and investors' ambitions of building on the success of the club to date," Watkins said.

"The consortium brings together a group with skills and experience across both the playing and commercial aspects of sport. It has come together for this project and is part of a growing phenomenon we are seeing in other similar situations where rather than one investor a number will join together. Certainly given our international presence, we are witnessing substantially increased interest on a global basis in this sector," he said

Watkins said: "The League of Ireland is an exciting competition that continues to grow significantly. It also gives any club a realistic opportunity to earn the right to participate in European competition. Dundalk has excelled in that regard, putting it on the international stage in recent years and there is a tremendous opportunity for it to do that regularly. Compare that to the mainstream leagues within England, Spain, France, Italy or Germany where that is considerably more difficult to achieve. I believe a pioneering investment like this will shine the spotlight even more on other 'lesser' leagues and the opportunities they offer to be part of a dynamic domestic league, access European competition and continue to build a club and be a part of communities whose teams sit at the heart of them."

"In general terms, the importance of European competition to financial sustainability within the smaller leagues has grown in recent years. Clubs that manage to reach the Europa league or the preliminary qualifying before the group stages of the Champions League receive significantly more financially than five to 10 years ago. The opportunity for players to participate in European football also helps in attracting talent, assists in the creation of youth programmes alongside providing a realistic chance to play regularly in first team competition. The participation in Europe can help to provide impetus to elevate clubs to a new level on and off the pitch," he said.

"I suspect that clubs competing outside of Europe's traditional 'top leagues' with potential for success and growth will become increasingly attractive for all of these reasons and in particular for the strong links to local communities," Watkins said.

"It is possible to imagine similar deals following this one elsewhere in Europe to bring together different investors with a view to achieving sporting and commercial success via both domestic success and participation in European competition," he said.

Dundalk FC has won a number of honours in domestic competition in recent seasons. They won the Premier Division title in 2014, 2015 and 2016, before finishing runners-up last year, and also won three cup competitions over those four seasons. The club also became the first Irish league side to reach the final play-off round in qualification for the Champions League group stages and to participate in the Europa League group stages.

"We’ve been following the incredible success of Dundalk FC over the past few seasons and have spent months assessing this opportunity, attending games and getting to know the club,’ Jordan Gardner, a spokesman for Dundalk FC's new consortium of owners said in a statement published on the club website.

"What [manager] Stephen Kenny and the players have accomplished under the stewardship of Andy Connolly and Paul Brown is nothing short of remarkable. We are excited to take up the reins and help build on the club’s success.  We are confident that with all of us working together there will be many more good days and nights ahead for Dundalk FC," he said.