The rise of international investment in football
Premier League clubs generated record revenues of £3.6 billion during the 2015/16 season, and the increasing profitability of elite teams in England’s top two division is attracting investors from across the globe. International owners are not a new concept for the EPL; Russian businessman Roman Abramovich arrived at Chelsea nearly 15 years ago and has since transformed the West London outfit with staggering levels of investment. Success has followed with the Blues winning several titles and the Champions League during the intervening period.
While Abramovich was once an outlier in a predominantly British-owned game, the last few years have seen a notable surge in foreign owners who are attracted by the prestige of the Premier League, the quality of football, superstar players and a new era in terms of PL finances. Deloitte’s Dan Jones adds: “Teams had always been attractive to overseas investors, but they were traditionally bought more for emotional reasons or as trophy assets. The fact they are now making consistent profits means they will be seen as viable financial assets from now on.”
The growing potential for profits is largely due to the Premier League’s recent £5.13 billion deal for television rights, which has helped to increase the value of England’s top clubs to a collective £7.6 billion. At the start of the 2016/17 season, 16 of the top flight’s 20 clubs had foreign owners or majority shareholders, including Manchester United, Arsenal, Liverpool, Sunderland, Bournemouth and Hull City, and experts predict that the number will continue to increase in the coming years.
Manchester City’s rise from perennial underachievers to a world-class side competing for the biggest honours is arguably the definitive case study for the positive impact that international investment can have both on and off the pitch. City finished just four points above the relegation zone in 2006/07, but just over a year later, they were taken over by Sheikh Mansour, who has a family fortune of at least £775 billion. Mansour’s arrival allowed City to compete for the best players in the world and end a 44-year wait for a Premier League title. He has also been instrumental in increasing the club’s value by nearly 500 per cent, from £210 million in 2010 to £900 million in 2015.
Clubs in England’s Football League are also now targets for rising levels of international investment. Greek shipping magnate Vangelis Marinakis became the latest to complete a takeover of a Championship side in May when he became majority shareholder at Nottingham Forest, and his acquisition has been heralded as an “exciting” move that gives fans “genuine reason for optimism.” Meanwhile, Chinese investors are diversifying their enterprises and portfolios by purchasing overseas football clubs and three sides in England’s second tier. Wolverhampton Wanderers (Fosun International) Birmingham City (Paul Suen, Wang Lei, Carson Yeung) and Aston Villa (Dr Tony Xia) have all benefitted.
Football clubs are among the world’s most recognisable brands and have truly global fan bases, so it is no surprise that international investors are flocking to elite leagues in the UK and across Europe. Rising investment will enable more teams to fund new stadium builds, buy star players and give them a robust financial base from which to grow, flourish and compete at the top of the game.