06 apr 2021 | Sportief
Sheikh Mansour has piped more than £1 billion into City Football Group, 10 clubs in 10 countries, including Manchester City, the mothership. Austrian drinks company Red Bull has poured hundreds of millions into clubs in Austria, Brazil, Germany and the United States. Even Matthew Benham, the physicist turned gambler, has more than £100 million staked in Brentford and Midtjylland.
Owning one club is usually a good way to turn a big fortune into a smaller one, so owning several sounds like a dare or a punishment.
Of course, the owners of these multi-club groups, which are multiplying like rabbits, will tell you they are long-term investments or sophisticated branding exercises and we should not sweat the small stuff like annual losses.
But there is one group that has been put together on a budget of just over £40 million and does worry about balancing the books. They are pushing for Europe in Belgium and chasing promotion in Denmark, England, France and Switzerland. Their clubs have a distinctive playing style and a commitment to youth, on and off the pitch, but have not lost their individual identities.
They are Barnsley, Esbjerg, Nancy, Oostende and Thun, the Pacific Media Group gang, a Poundland Red Bull, and this is how they have done it.
When asked by The Athletic what his personal experience of playing, coaching and watching football was before he started buying clubs, Paul Conway replies with five sentences that waste no words but are packed with information. Most conversations with the 51-year-old American are like this.
He started playing the game at school because his dad, who went to college on a soccer scholarship, told him “you can’t just play one sport and sit around for nine months — you are going to play soccer, too”.
He was a left-footed central defender, something he notes is a “black swan on the recruiting front” these days, but his playing career lasted long enough to learn his fortune lay elsewhere.
There was also a stint as a coach of a youth team while still at high school. He decided this was not for him when he was shown a red card. And the first game he remembers going to see was a North American Soccer League fixture in the late 1970s involving the Philadelphia Fury.
So, from those bare biographical details, we can see that a young Conway learned how to spot an unsustainable business model, that there might be some benefits to kicking a ball about and he is a bad loser.
If we fast forward to 2010, we find Conway moving to China to restructure a company he had just bought for a wealthy client of the investment bank he worked for.
This company was SearchMedia Holdings and for “restructure”, read fire people — a ballsy move for somebody who did not speak the language. As part of this process, he shut down down a subsidiary that almost literally fought back. Claiming it was owed money by the parent firm, it hired goons to follow Conway around. It did not work. He hired some muscle of his own.
SearchMedia became Tiger Media, a profitable business Conway ran until 2013, when he set up a hedge fund with Chien Lee, a US-based Chinese entrepreneur who owned a successful hotel chain. By this point, Conway had been helping Chinese firms do business in America, and vice-versa, for years, so the next logical step was his own company, Pacific Media Group (PMG), which he set up with Hong Kong-based businesswoman Grace Hung in 2014.
Conway, Lee and Hung: three investors who united to make money in the Asian entertainment sector but who would go on to form half the boards at football clubs in Barnsley and beyond.
PMG’s first moves were investments in films such as The Martian and X-Men Apocalypse. It also built up a portfolio of cartoons for the Chinese market, as well as investments in computer games and merchandising spin-offs.
But in June 2016, it teamed up with Lee, another Chinese hotelier called Alex Zheng and Elliot Hayes, an American banker, to buy 80 per cent of OGC Nice. At first, this looked like just another Chinese-led investment in European football, something that had long stopped being unusual, but it did not take long for this lot to separate themselves from the herd.
First, they were immediately successful, as Nice finished third in 2017, earning a place in the Champions League. And second, Nice was just the beginning.
In the 18 months after that purchase, Lee’s NewCity Capital investment firm and PMG tried to buy Hull City, Middlesbrough and Partick Thistle, before finally agreeing a deal to buy 80 per cent of Barnsley for £6.3 million in December 2017. This was a very different proposition to Nice.
Barnsley had been well run since 2003, when local businessman Patrick Cryne saved them from bankruptcy. Under his watch, the South Yorkshire side were twice promoted to the Championship, relegated once, reached the semi-finals of the FA Cup, won the Football League Trophy and built a reputation for developing talent.
But their turnover as a Championship team was about a quarter of Nice’s and when Conway, Lee and new partners — Indian investor Neerav Parekh and Oakland Athletics’ executive vice-president Billy “Moneyball” Beane (by far the most famous of the evolving ownership groups PMG have put together but only a silent partner at one club) — took over in December 2017, Barnsley were sinking.
Beane is a silent partner in the Pacific Group (Photo: Getty Images)
It was a difficult time. Paul Heckingbottom, the manager who got them promoted in 2016 and led them to a mid-table finish in 2017, quit the club in the February to become Leeds United boss, taking his backroom staff with him. He was replaced by Jose Morais but the Portuguese coach could not turn the team’s form around and they were relegated in May.
But there was worse news off the pitch. Cryne had put the club on the market after he was diagnosed with cancer. Three months before the sale was completed, he told fans he was “living on borrowed time”. That time ran out a month after the takeover.
He was replaced on the board by his son James but Barnsley would be starting the 2018-19 season in League One with new owners, a new manager and a 30-year-old chief executive from France called Gauthier Ganaye.
“I remember when I went to the first interview, I told my wife I wasn’t even sure if I wanted the job,” recalls Ganaye. “But after meeting Patrick I called her to say, ‘I want it now!’.
“I liked the way he talked about the club, what it meant to him and the town. I’m very grateful to him for giving me the chance: he changed my life.”
Ganaye got his first job in football, head of legal at Ligue 2 side RC Lens, in 2013 when he was only 25. Him being “only” a certain age is something he still gets, despite having more experience than half the executives in European football.
He got that job because he was the best-qualified person for the role. For his business law degree at the Universite Catholique de Lille, he wrote a dissertation on how French clubs could improve their competitiveness. He then completed his studies at one of France’s top business schools. Two years after joining Lens, he became their club secretary, taking on a marketing role, as well.
Lee with Ganaye (right) at Nice in 2019 (Photo: Valery Hache/AFP via Getty Images)
He wanted more responsibility, though, and he thought French football might be too conservative to appoint a 29-year-old as chief executive, so he sent his CV to Nolan Partners, a global recruitment agency. A few months later, he was heading to a hotel in Manchester to meet Cryne. Two interviews later, he had the job.
The night before he was named as the club’s new boss in June 2017, Cryne invited Ganaye for dinner at his house and told him two things: Cryne was dying and he needed Ganaye to sell the club.
Given the fact that new owners usually replace chief executives, this was a lot to dump on a new employee, particularly as his wife was at home in France six months pregnant. Ganaye need not have worried. As far as Conway and Co were concerned, Ganaye was one of the assets they had acquired.
Initially, he thought he might live in Leeds, a more cosmopolitan city he knew from his student days, but he decided he had to be in Barnsley.
“You could see Oakwell from the balcony of my apartment,” he says. “(Former Barnsley manager) Gerhard Struber inherited it from me and I think (current manager) Valerien Ismael is in there now!
“Barnsley seemed very British to me but it also reminded me of northern France. It has found it hard to transform its economy from mining but the people are humble and hard-working. My family felt very at home and I was a little bit sorry to leave when I did because everything we had put in place was starting to click.”
Ganaye left on February 1, 2019, because Conway and Lee offered him the chance to run Nice. It was too good an opportunity to decline. But he did not want to go until the transfer window had closed and he had done everything he could to give Daniel Stendel, the manager hired to replace Morais, the tools needed to get Barnsley back to the Championship.
So, the window shut and a taxi picked him up two hours later to take him to Heathrow. He arrived for work at Nice at 8am. “There are 24 hours in a day” is how Ganaye describes his work ethic, something he shares with others in the group.
Stendel was a classic PMG appointment. Unknown in England, the 44-year-old German had been out of work for a year since his sacking by Hannover 96. In fact, the former youth-team coach had only taken charge of 34 senior matches. But in those games, his team had pressed opponents high up the pitch and scored lots of goals.
“It’s fair to say things didn’t initially go to plan,” says Carlo van de Watering, from The Reds Report podcast. “The Jose Morais appointment was hasty but his dismissal allowed the owners to find someone that fitted their plan.
“Step forward, Daniel Stendel, and he got Barnsley back to the Championship at the first time of asking. Faith restored in the credibility but also the integrity of the board.
“Since then, all appointments, staff and players, have fitted the long-term vision. Academy products are coming through and being sold for profit, player recruitment has been spot on and the fans are on board with the plan: sustainability through clever recruitment and a playing style that represents the town and its heritage.
“The owners have also been true to their word in making the fans’ experience better with a fan zone. OK, we do not see or hear from them that often but when you’re flying in the Championship, fans aren’t too bothered.
Alex Mowatt of Barnsley celebrates after scoring against Queens Park Rangers (Photo: Clive Rose/Getty Images)
“We’re in with a realistic shout for the play-offs and then, perhaps, the promised land of the Premier League. Once the doors to Oakwell are open again, the majority of fans will want to show their thanks to the board for sticking to their plan and giving Barnsley a renewed feeling of pride and optimism.”
That was the mission Ganaye wanted to achieve at Nice but seven months after arriving, he was out. For the second job in a row, he had joined a club that was open to offers and a £90 million one from British billionaire Sir Jim Radcliffe was too good to turn down.
“They couldn’t say no,” says Ganaye. “But I regret not getting a chance to get started at Nice. There is unfinished business there.”
Out of work, Ganaye stayed busy. Conway and Lee were now certain their data-led, youth-oriented, high-pressing approach worked, they had money to reinvest and new investors in the group, American financiers Randy Frankel and Michael Kalt, co-owners of the Tampa Bay Rays, who reached the World Series last season with one of the lowest budgets in baseball.
Lee and PMG already had a deal in the pipeline to buy a stake in Swiss second-tier team FC Thun, which was completed in November 2019, but Ganaye was now assisting the search for clubs in new markets. They looked at several in Scotland but the Scottish FA’s rules on dual-ownership made that difficult, so they returned their attention to France, where Toulouse were available, and Belgium, perhaps the most open league in Europe to multi-club ownership.
By May, they had found their next reclamation project.
Thorsten Theys owns an accountancy firm in Ostend and one of his biggest clients in recent years has been KV Oostende, the Belgian city’s football team.
By 2019, they were, as Theys puts it, “in a terrible mess”. Belgian pharmaceuticals billionaire Marc Coucke, the club’s majority shareholder since 2013, had handed them over to his family investment firm in 2017 when he traded up to buy Anderlecht, one of Belgium’s biggest clubs.
That left Oostende adrift and they were second from bottom of the country’s top division when the season was halted and then cancelled because of COVID-19. By that point, they were £9 million in debt but worse was to come when the Belgian football federation withdrew the club’s licence, without which they could not continue.
Theys had been brought in almost full time to help with the licence application, come up with a business plan and find fresh investment. In six months, he received offers from 18 different parties, most of them who were agents trying to gain control of a club so they could use it as a shop window.
“Paul (Conway’s) group was the clear winner,” explains Theys, who, like Ganaye, was somebody PMG wanted to keep.
“He said he’d like me to become chief operating officer. Well, what he really said was ’90 per cent of Belgians are corrupt or incompetent, and many are both, but I like you’.
“Paul is very direct. I’ve heard his sales pitch a few times now — as he’s looking for other clubs — and it’s always the same. He tells it like it is. In business, you don’t achieve anything by always trying to be the nice guy. He’s already scared the local council by threatening to move to a new ground — he did the same thing in Barnsley.
“He’s not interested in trying to please people, he’s interested in results. What you see is what you get but he’s actually very funny.
“About 75 per cent of the club’s staff start panicking when Paul visits. There’s a saying here about wanting to see how the sun is shining upon someone before you approach them. He reminds me of my father in that way. But then they see the two of us eating sandwiches and laughing about South Park and know everything is OK.”
And everything is OK.
First, Ganaye was installed as president. Then Oostende got their licence back, enabling them to start the new season in the Pro League’s Division A. Then, having lost their first two games, they started winning.
How? The same way they started winning at Nice, Barnsley and Thun. They got younger, they hired a counter-pressing specialist from RB Leipzig’s academy to coach the side and they blitzed teams with double their budget.
That coach, Alexander Blessin, is now in the frame to replace Chris Wilder at Sheffield United. If he is offered the job, his bosses are unlikely to stand in his way.
Just as they did when Struber left Barnsley for the New York Red Bulls last year (the two organisations seem to trade coaches), they will bank the compensation and unearth another gem. They will already know who the next best counter-pressing teams are in European football, that is how they found Struber’s replacement Ismael at Austrian side LASK.
[OOSTENDE, BELGIUM - FEBRUARY 17 : Alexander Blessin head coach of KV Oostende talking to Brecht Capon defender of KV Oostende during the Jupiler Pro League match between KV Oostende and KRC Genk at the DIAZ Arena on February 17, 2021 in Oostende, Belgium, 17/02/2021 ( Photo by Nico Vereecken / Photo News via Getty Images)]
Blessin, head coach of KV Oostende (Photo: Nico Vereecken / Photo News via Getty Images)
“All PMG sides try to take the ball in your half and do something in the chaos,” says Theys. “This works better against the better teams, though, and not so well against teams that park the bus.
“But look, I’m an accountant: I’m happy when debit and credit are in balance. I know nothing about football. I watch it in the same way my mother watches it.”
Oostende are fourth in the table. Club Brugge are champions, 16 points clear, with three to play. Antwerp are second, five points ahead of Oostende, Genk third, one ahead, and Anderlecht fifth, level on points but behind Oostende because they have won fewer games. The top two qualify for the Champions League, the third-placed team goes to the Europa League and fourth and fifth will play in the inaugural Europa Conference League.
Leuven and Beerschot, four and five points back, could still spoil the party, particularly Beerschot, who Oostende play next weekend. Their two other games, though, are against the bottom two sides, hence Theys’ remark about parked buses. But whatever happens over the next fortnight, Oostende’s season is a minor miracle.
“The club was heading for relegation or even worse,” says Theys. “Anybody taking over would have been treated like a saviour and they were. But then fans and the media saw that Barnsley and Thun had made bad starts to the season and started to ask if these guys knew what they were doing.
“I remember telling sponsors we were going to play this high-press style, with an inexperienced coach who knew nothing about Belgium and a load of young guys we’d found using data — to say they were sceptical is an understatement.
“Now, they’re talking about Nobel prizes. Everybody can feel the positivity: fans, sponsors, staff, players, the city. We thought with COVID we might struggle on the commercial side but it’s been the opposite. We’ve done more renewals and we’ve signed another lead sponsor.
“And we’re getting lots of publicity. There’s a documentary coming out here next month about us (Kustboys: Make Oostende Great Again). It will be like Sunderland ‘Til I Die. So, it’s been the worst year for Belgian football since World War II but a good year for us.
“The media are ready to crown Alex coach of the year and everyone is looking at our young stars, (Senegalese striker Makhtar) Gueye, (Zambian striker Fashion) Sakala, (Belgian defender Artur) Theate. Gauthier is on the Pro League assembly and they listen when we speak.
“You know those pictures you see on Twitter? How it started and how it’s going? It’s like that. This is a resurrection.”
But do not just take his word for it.
“The financial problems were huge. We were almost bankrupt,” says Peter Van Nuffel, president of Kustboys, the supporters’ federation. “We had already started a crowdfunding scheme to save the club.
“We knew a bit about Barnsley but they weren’t a huge success at the time. I met Mr Conway when PMG bought the club and he explained their data system. I believed in the process.
“At the beginning of the season we were favourites to be relegated but we soon became appreciated for the way we play. The fans are delighted. We are alive, there is a good vibe between club and supporters and we play attractive football.”
Michel Platini won two French player of the year awards with AS Nancy in the 1970s, scoring the only goal when they claimed their greatest prize, the Coupe de France in 1978. But by the end of last year, those memories were almost the only thing the club’s fans had left.
“We had been in a difficult position for years, on and off the field,” explains Juliette Schang, editor of the Fans of Nancy website.
“The president, Jacques Rousselot, wanted to sell the club but couldn’t — we had big financial difficulties and the French soccer authorities demoted us in 2019. The president had to put four million euros in to save us.
“Many Nancy fans were grateful to Rousselot, because without him there would be no soccer in Nancy. He was in charge for 25 years, so the fact he sold the club scared a lot of fans.
“I didn’t know Pacific Media well, so I wasn’t happy or worried when they took over. My attitude was wait and see.”
PMG, Lee, Kalt and Krishen Sud, a Connecticut-based investor in the healthcare sector, bought AS Nancy on December 31, when Nancy were 17th in Ligue 2 and on a nine-game winless run.
In the three months since, they have lost just twice in 14 games and are now eighth in the table. With only eight games to play, they are 15 points behind third-placed Toulouse, the team PMG looked at in 2019. Too much to do this year but Schang has seen enough to believe Nancy could go up next season.
“If you started the season in January, we would be top,” she says. “We press more, it shows. The team hasn’t got much younger yet because only one player joined us in January.
“Yes, there are some fans who are concerned about being considered a satellite club but I’m waiting to see what happens this summer. Gauthier Ganaye seems to be involved in the life of the club, so I expect movement from the investors.”
You can take that for granted, Juliette.
Ganaye was speaking to The Athletic as he drove to work at Nancy’s Stade Marcel Picot. He is now in charge of Oostende and Nancy but what some would see as an impossible task, he believes is the group’s competitive advantage.
“We make decisions in minutes that other clubs spend days thinking about,” he explains. “Our dedication to data, our recruitment, our style of play, they are almost automatic now.
“But if you ask me what the difference is between us and other clubs, it is the speed of our decision-making. Me, Paul (Conway), Chien (Lee), Michael (Kalt), it’s not a lot of people.”
Conway, who is never in one place for long, agrees.
“Our model has a sound prospectus and we’re pretty ruthless,” he says. “We are a small team and it was inevitable there would be pushback to what we wanted to do at first at Nice and Barnsley.
“But we’re three years in now and Barnsley are humming. Whatever happens in the run-in, we’ll be competitive again next season. Apart from one player, we own the whole squad and they’re young.
“The need for change in Belgium was more dramatic because they were in a worse shape. But the plan was the same: youth, high press, a coach who knows the system. The whole league thought we’d be a joke but we’ve proved our point.
“There wasn’t much we could do at Nancy this season but we’ve shown the coach (the highly experienced Jean-Louis Garcia) our data. We asked him why he was playing all these guys aged 30 or over, who account for 40 per cent of the wage bill. He said, ‘Because they’re our best-paid players’. We said, ‘How’s that working out?’.
Garcia is now in charge at Nancy (Photo: CHARLY TRIBALLEAU/AFP via Getty Images)
“We had a France under-17 international (Warren Bondo) in the youth team. We said, ‘The kid’s got to play, he’s our best prospect, don’t hide him’.
“If you have a strategy, stick with it. There’s so much noise in football and people just don’t have the balls to stick to their guns. We got a call from an English club recently because they were thinking about hiring a German coach who didn’t know the EFL. What did they do? They went with an English guy. They didn’t have the guts to do it.
“It’s the same with agents. When we want to sell a player, we have a good idea of who might need him. So, we call them up and ask if they want to make us an offer — 90 per cent of clubs don’t do this. They leave it to agents. Oostende’s income was about seven million euros last year but they paid out 2.5 million euros to agents.”
Under PMG, Oostende’s entire transfer spend has been less than €400,000.
Conway, as you would imagine, is evangelical about the benefits of multi-club models. Savings in the back office and gains to be made in player development, recruitment and trading.
As an example, earlier this week Oostende got a six-figure sum from Swedish side IFK Norkkoping for 33-year-old Icelandic international Ari Skulason.
“Most clubs don’t care and wouldn’t even know the Swedish transfer window was still open,” says Conway. “We were able to sell a player with three months left on his contract and it opens up minutes for our 20-year-old left-back.”
Conway believes it is PMG’s presence in so many markets, and the direct relationships it is making, that enable the group to make moves like this.
And there are benefits to being part of something bigger for the players themselves.
A £990,000 signing from Luton in the summer of 2017, Cameron McGeehan, finished last season on loan from Barnsley at Portsmouth. At 25, he knew he was older than the players Ismael would be basing his Barnsley side on this season and he was in the last year of his contract.
“I didn’t really fit into the new manager’s plans,” says McGeehan. “But I had stayed in touch with Gauthier and he knew I was interested in playing abroad.
“So, when he took over at Oostende, he gave me a call and I jumped at the chance to do something different. I didn’t know much about Belgium or the Belgian league but it’s been great. The standard is high, the facilities are good and you’ve got some really big clubs like Brugge and Anderlecht.
“As I’m a bit older than their typical player, I think they thought I’d be one of the leaders.”
That plan was working well until mid-January, when the Northern Ireland youth international picked up an ankle injury. But he will back next season and he is convinced Oostende will be even stronger.
“Barnsley were using ‘Moneyball’ ideas before the Americans bought them — I think that’s one of the reasons why they chose Barnsley, because they shared a philosophy,” he says.
“It’s why Barnsley bought me from Luton. They were looking for players who were a bit undervalued. I don’t completely understand the system they use but Gauthier has told me a little bit about it. They look for certain characteristics. For a midfielder, I had a high goal expectancy. Barnsley saw that and thought the goals would come if I got the right opportunities.
“Young players and German coaches. It’s basically the gegenpressing system that Jurgen Klopp has made famous. They get players from clubs and leagues you’ve never heard of and you sometimes wonder how that’s going to work, but it does.
“Paul Conway has talked about young players being hungry. I’m not saying older players aren’t motivated but when you get a group of young players together you do get a lot of energy and desire.”
Is it also because they run further?
“Not really,” he says. “I’ve heard Klopp talk about this, too. We try to win the ball higher up the pitch and that should save us some running.
“There is an emphasis on sprinting and reacting quickly, though. There are slight differences between the managers, too. I haven’t played for him but the boys at Barnsley tell me the new manager wants a really aggressive press. He says if one goes, we all go.
“Stendel was a bit like that. He used clips of birds migrating to show us how they all go together as one. Struber was a bit more strategic. He wanted us to pick our moments. Blessin, the manager at Oostende, is more like that.”
Theys has had to bring in an associate partner to run his accountancy firm now, as “120 per cent” of his time is taken up by Oostende.
“Next year will be the big challenge,” he says. “We have to confirm this to prove we didn’t just win the lottery this year. I’m sure we will because I know Gauthier has his targets and if we make five, six, seven million in player sales, it will all get reinvested in making the squad even more valuable.”
Some will say Barnsley won the lottery last season when they narrowly avoided relegation. They finished one point clear of Charlton and two ahead of Wigan but the Lancashire side were docked 12 points for going into an administration when their Chinese owners stunned everyone by simply withdrawing all funding with half a dozen games to play.
There is no disputing that Wigan’s fate was harsh but if any Championship club deserved a break last season it was Barnsley. They had the lowest budget and the youngest side in the division, and were bottom of the table when the pandemic halted the season in March.
But Conway told The Athletic at the time he thought they would be better equipped than most for Project Restart’s congested calendar and he was right. The last nine games brought four wins and two draws, including victories over Nottingham Forest and play-off bound Brentford on the last day of the season.
Never one to miss an opportunity, though, it is no surprise that Conway, Ganaye and Kalt were among the first to contact Wigan’s administrators about buying the club. They could not agree a deal but they are still looking to add to their portfolio, with clubs in Austria, England, the Netherlands and further afield on their radar.
In February, they bought Danish second-tier side Esbjerg FB. With games of the regular season to play, they are a point off second place.
As Theys puts it: “When you’re an entrepreneur, the real achievement is to do it again. It’s the same with great writers. You can’t just write one good book, you’ve got to write 10.”