Private Investment in Egyptian Football Clubs: A Case Study of Ghazl El-Mahalla FC’s Failed IPO

Saleh Mahmoud, The American University in Cairo



In 2017, Egypt passed a long-awaited “unified sports law,” providing a regulatory framework to pave the way for private investment in the sports industry. Egyptian football market value has historically suffered from a lack of private investment, and the country has been struggling to stimulate ventures across the private sector, especially in sports. Public officials, parliament members, club presidents, and financial analysts have been calling for reforms to address the unfulfilled potential in job creation and value to the economy. Private investment in Egypt has become necessary in an environment of increased austerity measures and as the government spends less on football and sports in general.

Following the 2017 sports law reform, Ghazl El-Mahalla, a historic public sector company, attempted to list shares of its football club on the Egyptian Stock Exchange (EGX) through an initial public offering (IPO) of $8.6 million USD in 2022.[1] This was significant as the Arab World’s first football club public listing. The Ghazl El-Mahalla FC IPO was touted as a trailblazing milestone for a new era in the Egyptian football economy; public officials were optimistic about its success, and predicted that it would be the first of many IPOs for football clubs in Egypt. In 2021, there was an announcement that Al Ahly—Egypt’s top club and winner of the Confederation of African Football (CAF)’s Africa’s Club of the Century—would also list a 49 percent stake on the Egyptian Stock Exchange. However, this news was never followed with an actual plan; there were media reports on conflicting responsibilities between Al Ahly’s board of directors and its related football company created to carry out the IPO.[2] Despite the hype generated by the Ghazl El-Mahalla FC IPO, the club was unable to attract investors and the IPO was aborted in August of 2022 due to lack of demand. The failure of the IPO came as a surprise to analysts, as Ghazl El-Mahalla FC was touted as the first of a long-awaited list of government IPOs for public sector companies, and it was expected that the club’s fan base, while smaller than the top-tier Egyptian clubs, would buy shares in Ghazl El-Mahalla FC even in dire economic and market conditions.

This article argues that the failed IPO of Ghazl El-Mahalla FC is as an indicator of broader problems surrounding private investments in Egyptian football. The study explores the underlying reasons for the lack of investor interest in the Egyptian football industry and examines the barriers hindering Egyptian football clubs from utilizing the new 2017 regulatory framework restructuring in Egypt. The study considers the relevance of ownership structures and investment trends in Egyptian football, and concludes with a call for further research on financial regulations governing the football industry.

 The Structure of Egyptian Football Club Ownership

Historically, Egyptian football clubs were set up as private institutions, but were incorporated into the state during the nationalization era after 1952. Since then, the state has maintained ownership of football clubs but granted some form of autonomy through board of director elections and general assemblies. In its current state, Egyptian football club ownership takes three forms: 1) Quasi public; 2) state-owned enterprises (SOEs) or corporates; and 3) private company ownership, with the first two forms being the most predominant in Egypt. The quasi-public structure means that Egypt’s Ministry of Sports has authority over clubs. While such clubs are free to elect their own board of directors, their assets are government owned in most cases. These clubs are colloquially referred to as “social” and “popular” by Egypt’s Ministry of Sports,[3] and include the most famous teams such as Al Ahly SC and Zamalek SC. The second type of football club ownership are teams that fall under state-owned enterprises (SOEs) or corporates, including Ghazl El-Mahalla FC and the National Bank of Egypt FC. Finally, the third type of football club ownership is through private investment, which was instituted by the new 2017 law to allow private investors to buy stakes in state-owned clubs. Before 2017, private investors could either establish a completely new club or buy a privately owned small-scale club with no fan base, like Pyramids FC, and inject funds into it.

Opening the Egyptian sports market, and especially the football market, for private investments has become a target for economic reform in Egypt over the past few years. The 2017 reforms were meant to allow popular clubs like Al Ahly and Zamalek to create professional football “management companies” to work around the fact that these clubs are essentially state-owned. These football management companies act as legal entities responsible for running the business of the club, with a possible 49 percent maximum private investment—the controlling 51 percent stake remains with the state.[4]  The privatization law was expected to permit top football clubs to attract investment but at the same time not to give away the state’s ownership of the club itself. While this regulation is also present in Germany, which is often used as the role model for fan engagement and governance, the difference is that German clubs are owned primarily by member associations and are not under the authority of any state ministry.[5]

In the Egyptian football market, the 2017 sports law presented an extra option for investors who could previously only invest in completely new private football clubs with no fan base. The 2017 law allowed investors to buy shares in football companies created by state-owned football clubs, ones with prestigious track records and large followings. The caveat is that private investors could only own a maximum 49 percent stake, meaning they had no control over how the business is run. In essence, the new sports law tried to open the door for private investment, but without giving investors the ability to control how these investments will be handled or monitored, a condition that faced expected criticism. Against this backdrop and the worsening economic conditions in 2022, the Egyptian government announced that it would kick off the long anticipated public IPO program with the public offering of Ghazl El-Mahalla FC, a spinoff football company carved out from the historic public business sector Misr Spinning & Weaving company.[6]

Why Did Ghazl El-Mahalla FC’s IPO Fail?

Even though the Ghazl El-Mahalla IPO was given considerable official backing, spearheaded by Hisham Tawfik, the former Egyptian Minister of Public Business Sector, and was the first serious trial to make use of the new 2017 sports law to allow private investors to buy into historic football clubs, it failed after investors put in orders for just 18 percent of the shares offered.

There were issues specific to the Ghazl El-Mahalla FC club that led to the IPO failure. Ghazl El-Mahalla FC started as a club representing Misr Spinning & Weaving company back in 1936, a public sector company. Ghazl El-Mahalla FC company was established as a separate legal entity to run the business side of the club, and to allow the club to be offered in the IPO. The new entity was the first Egyptian football company established as per the new sports law in 2017. However, this was not attractive enough to potential investors as the newly established company had no financial statements prior to the IPO year.[7] Also, the ownership structure of the Ghazl El-Mahalla FC company seemed unclear, as all land and sporting facilities, including its stadium, are provided by the historical public sector company “Misr Spinning & Weaving,” and the club was given a 20-year right-to-use agreement, with no indication of what happens after the agreement expires. Football experts were skeptical of how Ghazl El-Mahalla FC would attract football enthusiasts to invest, given that the club had only been recently promoted to the Egyptian Premier League and was often in the relegation zone. The club’s only League title was in the 1970s.[8] Thus, Ghazl El-Mahalla FC had an added layer of challenges in creating revenue because a) it did not have the same fan base as the top clubs and hence was not expected to generate ticket sales; and b) it did not get the same share of revenue for media rights as the top clubs.[9] In the IPO announcement, Ghazl El-Mahalla FC presented an estimated business plan that would generate 21.5 percent yearly return. This was considered quite optimistic by critics since the club does not enjoy the same competitive financial advantages like Al Ahly FC, including the latter’s valuable media rights and its participation in African competitions. Also, at this exact time there was a rise in interest rates on bank deposits in Egypt to help curb inflation. This meant that some potential investors would have the choice of a 20 percent risk-free guaranteed annual return on bank deposits, or a 21.5 percent yearly potential on a new football club IPO, which would be considered more of a gamble. Some also argued that Ghazl El-Mahalla FC was considered a long-term investment, which the market might have not been ready for.

While Ghazl El-Mahalla FC had its own internal problems, the weak investor demand also reflects broader structural issues in the football market in Egypt. The current dilemma for the Egyptian football industry is that historic clubs are of a hybrid and complex structure, with simultaneous state ownership and an autonomous board of directors. Since the IPO announcement did not provide guidance on which revenue streams Ghazl El-Mahalla FC would have—including sponsorship deals, media rights, sale of players, etc.—the failure of the IPO is a sign that there is a need to re-evaluate the state’s role in club ownership if private investment is to be encouraged.

The weak investor demand in the IPO of Ghazl El-Mahalla FC was indicative of several underlying structural problems in the Egyptian economy. Some official announcements attributed the lack of investor demand to macroeconomic conditions and the downturn experienced by the Egyptian Stock Exchange (EGX), rather than to the specificities of the club or the football industry. They argued that those underlying conditions hindered investments in football in Egypt, not just for Ghazl El-Mahalla FC. Economists might have ample financial reasons to explain the lack of investor interest in Ghazl El-Mahalla FC, but sports experts and executives have expressed different opinions related to how professional football is structured, practiced, and regulated in Egypt. Football experts pointed out that, over the years, even top clubs like Al Ahly SC and Zamalek SC have reported losses exceeding 200 million Egyptian pounds.[10] There are several reasons to explain why football clubs in Egypt are losing money, including the relatively low values for sponsorship and media rights and the absence of ticket sales revenue since 2012, when Egypt instituted a full ban on fan attendance of football matches after 72 football fans were killed in the city of Port Said in post-match violence. Since 2014, the ban has been partially lifted but with a maximum of 5,000–10,000 fans allowed to attend.[11]

Further, football clubs in Egypt no longer sell their match tickets nor market their media rights, after two newly formed state-owned companies were initiated for these purposes.[12] Fan attendance, which is at a maximum of 7,000 for the 2021–2022 season, was further reduced after the state-owned ticket distribution company increased ticket prices. Egyptian football clubs have suffered significant financial losses over the past ten years due to the absence of ticket sales, estimated by some experts to be two billion Egyptian pounds. The lack of profits meant that even football enthusiasts did not believe in the promise that Ghazl El-Mahalla FC would generate dividends.

Additionally, football experts point out the inability of Egyptian football clubs to diversify their revenue sources due to regulatory limitations. Most notably, various international clubs have started to capitalize on their fan bases around the world with the use of “fan tokens,” a form of crypto currencies issued by clubs to increase fan engagement and to offer them various advantages. Using these tokens, international clubs can ask fans to vote on friendly match schedules, kit designs, or other similar activities. These tokens have generated considerable revenues for major European clubs in the past couple of years, estimated to be 200 million Euros.[13] However, Egyptian football clubs cannot pursue such opportunities as crypto currencies are outlawed in Egypt. Thus, problems internal to Ghazl El-Mahalla FC as well as those related to the broader debilitative structure of the Egyptian economy in general and the Egyptian football industry in specific all contributed to the failure of the Arab World’s first football club IPO.


This article aimed to provide explanations for the lack of investor interest in Egyptian football, using the example of Ghazl El-Mahalla FC’s failed IPO. The explanations provided indicate that the recent legal reform of Egypt’s sports law in 2017 does not stimulate investment in football, highlighting the importance of tackling other structural issues in Egyptian football. There is a general lack of revenue sources for football clubs in Egypt, and even the most popular clubs, like Al Ahly and Zamalek, are reporting budget deficits on a regular basis. Operating within a restrictive environment that deters private investment, football clubs in Egypt have limited leeway to grow their revenues. Additionally, private investors are crowded out with the establishment of state-owned companies that have exclusive rights to manage tickets and media rights. [14] The ownership structure in the current legal framework is also a deterrent as investors are wary about not being allowed a majority stake in football club companies.

This study is an attempt to add to the much-needed literature on football finance in Egypt to stimulate other researchers to pursue filling this gap. Further analysis is recommended to identify alternative club ownership structures that would encourage private investment and preserve national brands prior to passing amendments to sports laws. There is also a need to evaluate necessary policy reforms allowing clubs to explore different revenue sources; namely, regulations on spectator attendance and fan engagement products like club tokens. Finally, there is a need to review limitations on Egyptian clubs’ abilities to market their own media rights to ensure a level playing field among all clubs in the Egyptian Premier League.




[1] Farah Elbahrawy, “Arab World’s First Football Team to Go Public Seeks $8.6 Million,” Bloomberg, December 21, 2021,

[2] “Paint the EGX (a Different Shade of) Red,” Enterprise, November 21, 2021,

[3] Abdulrahman Al-Shuweikh, “Amending Egypt’s Sports Law: A Step towards Stimulating Investments,” Daily News Egypt, March 10, 2021,

[4] Al-Shuweikh, “Amending Egypt’s Sports Law.”

[5] Marc Rohde and Christoph Breuer, “The Market for Football Club Investors: A Review of Theory and Empirical Evidence from Professional European Football,” European Sport Management Quarterly 17, no. 3 (2017): 265–289.

[6] Elbahrawy, “Arab World’s First Football Team to Go Public Seeks $8.6 Million.”

[7] Ibrahim Mostafa, “Is Football Investment in Egypt a “Failed Project”? [in Arabic] Independent Arabia, January 23, 2023,

[8] Abdul Rahman Rashwan “Why did the ‘Ghazl El-Mahalla’ IPO Fail?” [in Arabic], Economy Plus, August 28, 2022,

[9] Rashwan, “Why did the ‘Ghazl El-Mahalla’ IPO Fail?”

[10] Abdul Rahman Al Shuwaikh, “Egyptian Football Clubs Lose 200 Million Egyptian Pounds in Revenue due to Minimal Fan attendance” [in Arabic], Economy Plus, September 22, 2022,

[11] “Egypt Eases Ban on Football Match Attendance,” Al Arabiya News, December 22, 2014,

[12] “Mystery Company Estadat Takes Over Presentation Sports,” Enterprise, December 5, 2019,

[13] Adeola Eribake, “Crypto Tokens Net Top European Soccer Clubs Millions: Report,” Bloomberg, August 28, 2021,

[14] “Mystery Company Estadat Takes Over Presentation Sports.”