Why Are Billionaires Shying Away From Buying Premier League Clubs?

Why Are Billionaires Shying Away From Buying Premier League Clubs?

billionaires

Why are even billionaires shying away from buying Premier League and Championship clubs?

image

Superb international businessmen have had their fingers severely singed by football club ownership. Mark Goldberg and Simon Jordan lost almost their entire £90m+ wealth by investing in Crystal Palace football club. Equally Shahid Khan a multi(dollar) billionaire manufacturer of plastic car parts in America has lost a substantial amount of money on Fulham Football Club, after buying the club from Mohammed Al-Fayed.

Vincent Tan a billionaire (who made his money from McDonalds franchise’s in Malaysia) has lost huge amounts of money on Cardiff City as have Venkys the Indian chicken magnates on Blackburn Rovers. The currently incarcerated Birmingham City owner Carson Yeung (serving 6 years in jail for money laundering) has seen the £83m valuation he paid to David Gold, David Sullivan and Karren Brady (the current West Ham owners) drop to a £30m valuation, a £53m loss in 3 years.

Currently in the Premier League three clubs are for sale, Everton circa £170m, Aston Villa circa £180m and WBA circa £150m and there are no takers. Even with a £5.2billion TV deal where the bottom Premier League club will receive £100m for (Media broadcasting rights)there are no takers, worldwide for those clubs.

Nothing burns through money like a football club, media estimates currently suggest Leeds United are losing £1m per month. Leeds United do not own Elland Road the ground and neither do they own their Thorp Arch training facilities, the football club pays rent on both hence the £1m loss per month.

Famously Sir Jack Hayward sold Wolves for £10 in 2007 on the proviso the incoming purchaser the Liverpudlian Steve Morgan owner of Redrow Homes ploughed in £30m into the club. Ken Bates famously bought Chelsea in 1982 for £1 providing he took over the clubs debts.

Recently the Kuwaiti air conditioning billionaire Fawaz Al Hasawi has taken over Nottingham Forest for a nominal (sub £10m fee) providing he pays the debts to the Nigel Doughty trust fund who inherited the club on Mr Doughtys’ tragic death.

The irony is programmes like the Apprentice laud Sir Alan Sugar but even he bailed out of Tottenham Hotspur selling it to Joe Lewis the currency trading billionaire and Daniel Levy for £65m in 2001.

Football club ownership is a very precarious business, where even very very capable international businessman often fail and are bemused by the practices of football clubs.

Mohammed Al-Fayed the Egyptian billionaire former owner of Fulham (and Harrods) said he felt a sense of relief when he sold Fulham (and managed to get 75% of his money back).

The multimillionaire owner Eddie Davis is owed £130m by Bolton Wanderers and is very unlikely to see much more than 20% of that given they are bottom of the Championship with nobody willing to buy them.

The world renowned Parma football club who had previously won Serie A’s and UEFA Cups had no takers when forced into bankruptcy and demoted to the equivalent of the Conference league.

Randy Lerner the MBNA credit card billionaire owner of Aston Villa has ploughed in excess of £300m into Villa and now has no takers for his £180m asking price. Even for a guy worth over a £1billion like Randy Lerner a £120m loss still hurts.

Interestingly in the Class of 92 documentary Giggs, the Nevilles, Butt and Scholes involved the Singapore billionaire Peter Lim when buying non League Salford City, with Lim owning 50% of the project.

It’s mildly amusing watching successful solvent clubs like Liverpool and Man United fans criticise their owners on Twitter.

The presumption that there are wealthier more well resourced potential owners out there is a misnomer and a completely false assumption.

The only club that has multi-billionaires waiting to buy it out is Arsenal. Alisher Usmanov the commodoties billionaire wishes to increase his 30% to take the majority stake from Stan Kroenke(who holds 69%). Arsenal also have Aliko Dangote the cement Nigerian billionaire worth £15bn who wants to buy Kroenke out. London and a fully funded paid off Emirates stadium that has £240m excess cash sat in its bank account is a very unique proposition.

The three prominent clubs up for sale Aston Villa, Everton and WBA all await an Oligarch with multiple billions, as being a mere billionaire is not nearly enough in the Premier League.

The future of Football club ownership is going to be as interesting as what occurs on the pitch for the majority of football fans.

There are not as many Sheikh Mansour type Man City buyers vying to buy Premiership clubs as the media would have you believe.