Deal focus: ACA seeks Asia-Europe sporting synergies

When STVV, a football club competing in Belgium’s first division, acquired Vietnamese striker Cong Phuong Nguyen in 2019, its followers on social networking platforms doubled almost overnight, according to Akihisa Iizuka, who was the club’s CFO at the time. Iizuka now wants to repeat the trick with second-tier outfit KMSK Deinze – but this time make the Europe-Asia synergies sustainable.

Nguyen’s loan deal failed to turn into something permanent after he made just one competitive appearance for STVV’s first team. Within six months, the striker was back in Vietnam. For all the hype around giving Europe’s mid-level football clubs a boost by connecting them Southeast Asian fans, there is little commercial pay-off if the players who underpin the strategy don’t work out.

“Monetisation is the big problem. In the past, several Asian owners of European clubs have tried to bring in players, but they couldn’t turn that into business benefits,” said Iizuka. “This is often because players aren’t cared for, they fail to adapt, and after one season return to their home countries. Sponsors don’t want to pay because there is no consistency.”

KMSK Deinze hopes to achieve this consistency under the stewardship of ACA Football Partners (ACAFP), a subsidiary of Japan’s ACA Group. It is the first of a planned portfolio of European football clubs, with Hiroyuki Ono, CEO of ACAFP, estimating it will cost around USD 50m to accumulate stakes – mostly minority – in four more. ACAFP will raise additional funding as required.

Ono, a Singapore-based partner with ACA Investments, spent two years plotting a way into sport investment after attending the 2016 European Champions League final in Milan. He describes the strategy as cross-between Abu Dhabi-controlled City Football Group – essentially a project built around the Manchester City brand – and Red Bull’s academy-style system.

Below the big five

The difference is scale. ACAFP is deliberately looking beyond Europe’s big five leagues – France, Italy, Germany, Spain, and England – because assets there tend to be incredibly expensive or inaccessible. Belgium appealed for its central location, lack of quotas for non-EU players, and tax breaks for clubs with young demographics. But Eastern Europe and the Nordics are also under consideration.

“Smaller clubs in these leagues have budgets of USD 8-10m and they are up against others with budgets of US 30-40m. They know they must put in more money to be competitive, so they need a revenue channel outside their country,” Ono explained.

“Maybe an under-18 player comes to one of our clubs from Asia for three years and it’s a revenue share. Our multi-club strategy is more of a circle than a pyramid. We want to be a hub for conversations and cooperation: the Nordic club loans a player from the Eastern Europe club; the Belgium club brings in the star player from Eastern Europe.”

Foreign ownership is already increasing in Belgium’s top two leagues. Notably, City Football Group acquired Lommel SK in 2020. KMSK Deinze is one of at least four clubs with some Asian involvement. STVV is controlled by Japanese e-commerce business DMM.com, while KV Oostende is co-owned by Chien Lee, a Chinese American entrepreneur also pursuing a multi-club ownership model.

Iizuka suggests this was one of the reasons KMSK Deinze became available. The previous owner had been in harness for about a decade, taking the club from the amateur to professional ranks. KMSK Deinze won promotion to the second division in 2020 but needs more investment if it is to reach the first. Near-term plans include building a new stadium to replace the current 7,515-capacity ground.

ACA might be well-positioned to leverage the Asia expansion angle. It has witnessed the local media furore around the endeavours of Japanese stars Hidetoshi Nakata and Keisuke Honda in Europe and Ono believes Southeast Asia – where he has made multiple private equity investments for ACA, largely working on a deal-by-deal basis – might be at a similar tipping point.

As evidence of the nascent interest in Europe’s lower-profile leagues, Ono and Iizuka pointed to a recent agreement that will see Indonesian streaming service Mola TV broadcast Croatian football league matches in Indonesia, Malaysia, Singapore, and Italy.

“There is a lot of interest in football in Southeast Asia. If we can market effectively, we think we can build a fanbase there,” said Iizuka. “Clubs with mid-level UEFA rankings and below don’t have the resources and knowledge to expand globally. At the same time, the level is suited to Asian players. You already find Japanese and Korean players, and now some Southeast Asians as well.”

On the pitch

However, the ACAFP strategy goes beyond selling subscription content. It wants to follow Europe’s leading clubs in taking a data-oriented approach to training, player scouting, and in-game analysis. KMSK Deinze will invest in young recruits, including those from Asia, and help them develop.

“We want to get away from being a trading business for players to producing the right players,” Ono said. “It’s not just about collecting data, you need good digestion, extraction, and execution as well. We want to have more scientific discussions and be able to explain things using numbers, so there is no bias. If a young Asian player is suited to Europe, it will be proven in the data.”

ACAFP hopes to succeed where others have failed by emphasizing on-pitch performance. In 2015-2016, for example, Chinese investors committed more than USD 1bn across eight European football transactions. Ambitions to deliver new fans and commercial relationships haven’t been realized.

Most of these investors were entrepreneurs rather than institutions. One of the problems, according to Ono, was a lack of supporting infrastructure. They neglected to recruit people with local knowledge who could bridge the gap between Europe and Asia. ACAFP hopes to address this with a team that includes Takahisa Shiraishi, a coach who worked at STVV and with Honda at AC Milan.

KMSK Deinze will look to start bringing in Asian players from next season. The club currently sits fourth in the table, with only the top two having a shot at promotion. While not in a rush, ACAFP hopes elevation to the top tier comes sooner rather than later. KMSK Deinze is almost at break-even and the goal is to achieve a stable cash positive position in the next couple of years.

Meanwhile, ACAFP continues the search for new targets. “We are taking a step-by-step approach,” said Ono. “We are looking for partners who manage themselves but are sympathetic to our strategy. We would take a minority stake and maybe after two years, if it makes sense for them and us, we might go to a majority.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Europe
• Southeast Asia
• North Asia
• Consumer
• Media
• Buyouts
• Japan
• ACA Investments