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(Bloomberg) — Daniel Kretinsky is one of Europe’s most prominent dealmakers. He built his energy business into a conglomerate that’s generating record profit. He’s invested in mining and power plants in Germany, IT and retail in France and is in the process of buying the Royal Mail in the UK.
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At home in the Czech Republic, though, the 48-year-old billionaire is known for a longtime investment that’s made him no money at all.
Kretinsky is the majority owner and chairman of the board of AC Sparta Prague, the Czech football club with the biggest trophy cabinet, the most fans and the team that was crowned champion for the second season running last month. As he makes his name with transactions across Europe, Sparta is a window on his world and the scale of his ambition.
With his acquisitions, Kretinsky has focused on businesses that are struggling, and football is no different given the parlous state of the sport’s finances. Now he wants to take Sparta to a new level, building what would be the biggest stadium in the Czech Republic and turning the club into a regional brand in a way that no rival has been able to.
Kretinsky, a fan of Sparta since his childhood, has described his 20-year ownership of Sparta as “something between a mission and way of life.” Associates who were interviewed for this story said he has evolved from a hands-on owner known to have personally fired players to one who has grown to trust his managers to deliver results.
Over the years, he adjusted to how owning a football club differs from the more predictable world of business deals, they said. The first thing was the emotional attachment, said Frantisek Cupr, Kretinsky’s right-hand at Sparta.
Sparta and the team’s performance have often come up at management meetings at Kretinsky’s Prague-based company Energeticky a Prumyslovy Holding AS, according to Cupr. Executives have a WhatsApp group that springs into life when a match ends, with Kretinsky among those who aren’t shy to critique performance.
“I know how stressful it was for him at the start of his time at Sparta,” Cupr said in an interview in one of the VIP boxes at Sparta’s stadium. His other businesses only gave him a fraction of that stress, he said. “I’m glad that his mindset has started to change and that he’s able to enjoy it these days.”
Kretinsky has a net worth of about $8 billion, according to the Bloomberg Billionaires Index, built mainly via his power company.
He initially faced a backlash in France against his acquisition of supermarket chain Casino Guichard-Perrachon SA, and his purchase of the rest of Britain’s historic Royal Mail could still meet political hurdles. He also has another football investment, a minority stake in London club West Ham United.
That, though, is more business than passion. Insiders at Sparta say the latest Czech title win brought satisfaction to an owner who has poured billions of koruna into the club while watching the team struggle for most of the time. Worse still, it had perennial lost out to archrival Slavia Prague, now owned by fellow energy billionaire Pavel Tykac.
“The combination of bearing top responsibility for the club, and also that I can only sit and passively watch action during matches — that’s seriously brutal and I don’t know it from any other sphere of my work,” Kretinsky said in a book published last year to mark the 130th anniversary of Sparta’s founding.
Football is notorious as a money pit. The English Premier League is the richest in Europe, with revenue jumping to £7 billion ($8.9 billion) a year. Yet only four of 20 clubs made an operating profit, according to the most recent accounts.
The cumulative operating loss at Sparta over two decades rose to more than 2 billion koruna ($88 million), Cupr said. The past season was most likely the first when the club was marginally in the black, he added.
Kretinsky is ready to spend more. He aims to build a new stadium that would seat 35,000 — compared with just over 17,500 at Sparta’s current facility — and cost about 4.5 billion koruna, Cupr said. The Czech football authorities approved the plan, the club said on May 30.
The new arena would open after 2030 and overtake Slavia’s as the biggest in the country, which unlike Poland, Hungary and Romania lacks a flagship national stadium.
One prominent Sparta fan, Czech actor Jirina Bohdalova, said she’s fascinated by the mood on matchdays, however small the current stadium. “I’m used to spectators at the theater,” she said, according to the anniversary book Nation Sparta. “But this here is more intense.”
The question is whether success on the pitch can match the ambitions off it, and next season will be critical. Unlike Sparta this year, the No. 1 Czech club will directly proceed into Europe’s elite Champions League without going through qualifying rounds. That alone will bring in hundreds of millions of koruna in revenue for the team involved.
“The battle for who will win the league next year will be very tough,” said Jaromir Bosak, the most popular Czech football commentator. “Now it’s up to Daniel Kretinsky whether he will seek a short-term profit of let’s say 100 million koruna on transfers, or whether he’ll wait to make, let’s say about half a billion koruna in a year or so.”
In his other businesses, the answer to that might be simpler. Kretinsky is known for his cool, analytical approach to deals. With Sparta, it was something different. Last year, he was fined by the football authorities for visiting the referees’ locker room during halftime at a match to ask them to explain decisions.
The club’s journey since the collapse of communism in 1989 and then the dissolution of Czechoslovakia a few years later was one of transformation, when owners changed hands every couple of years. Then in 2004, Kretinsky couldn’t pass up a chance to buy the team.
He entered the club along with Patrik Tkac, one of the partners of private investment firm J&T that hired Kretinsky as a lawyer in 1999. Now Kretinsky owns 50% plus one share in Sparta, according to EPH Chief Financial Officer Pavel Horsky.
The most significant changes within the club started about six years ago, when Kretinsky put Cupr in charge and also brought in former Arsenal player Tomas Rosicky as the sports director. The club broke taboos, becoming the first Czech team to hire a coach who speaks no Slavic language and where foreign players outnumber Czechs.
Regardless of the cost, Kretinsky is committed to Sparta for the long-term. The club is part of the “family silver” within his conglomerate. “With Sparta your heart is so intensively involved,” said Cupr. “Dan loves sports and loves football. Sparta is a phenomenon, the biggest club in the country.”
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–With assistance from Peter Laca, Irene Garcia Perez and Alexander Sazonov.
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