Tan’s Cardiff PhD in football management
SINGAPORE — After being “cheated by dishonest managers” at Cardiff City, Malaysian billionaire Vincent Tan said he has earned a PhD in football management and is now fully committed to investing in the game.
Confirming media reports, Tan said his next foray, to be announced in the next few days, is the purchase of Major League Soccer (MLS) franchise Chivas USA, which will be renamed Los Angeles Football Club.
On the sidelines of the Forbes Global CEO Conference at the Shangri-La Hotel yesterday, Tan told TODAY he will be the majority owner among fellow investors Hollywood producer Peter Guber, venture capitalist Henry Nguyen and former NBA executive Tom Penn in the takeover.
The Californian property will be Tan’s third investment in a football club, after buying Bosnian club FK Sarajevo 11 months ago.
The Berjaya Group chairman also has his eyes trained on another European club, which he declined to identify, and may also scout for opportunities in Japan and South Korea.
Said Tan: “Compared to what people believe — that you cannot make money investing in football clubs — I think if you managed it carefully, have an honest manager, and if you control it well and watch how they spend your money carefully, you can make money. If not, you will lose money.”
The 62-year-old’s emphasis on trustworthy managers comes after he sacked Cardiff head of recruitment Iain Moody last October and manager Malky Mackay three months later.
He claims the pair misspent the better part of his £50 million (S$102.6 million) in the summer of 2013 in dubious deals for new players, ahead of their return to top-flight English football in the Premier League after 51 years.
Tan was especially unhappy with the purchase of Andreas Cornelius, who was signed from FC Copenhagen in a deal that rose close to £11 million and on £45,000-a-week wages.
The episode is far from over as Tan said Cardiff had spent up to three times what some of the players were actually worth and his lawyers are preparing a slew of legal suits against several football agents involved. Both Moody and Mackay, he added, are also implicated in these shoddy deals.
But Tan said foreign owners, particularly Asians like him who are new to the English game, are vulnerable to the actions of an unscrupulous few.
“All of us are new, so we try and listen to the local people who manage the clubs,” said the Malaysian. “This is where we all make mistakes. We listen to them too much, just as I listened to my former manager. He bought players and overpaid for as much as three times their value.”
It was an expensive lesson for someone who was never a football fan or attended any match, not even in Malaysia. His first game was watching Cardiff’s Championship promotion playoff tie in May 2010 against Blackpool, which they lost 3-2. He was invited by a consortium of Malaysian investors who bought a 30 per cent stake in the club and asked him to pump £6 million into their fund.
As of April this year, he owns 90 per cent of the Welsh side after spending close to £170 million over the past four years, an investment he said will never be recouped.
“I over-invested in the club because I was cheated by the player deals and am currently in the red. Even if I sell the club, I will still lose money,” said Tan.
Equipped with experience, Tan said his investment in Sarajevo has so far been good because he made sure the people who manage the Bosnian club were trustworthy.
He intends to hold on to all his football properties for at least 10 years in the hope they will increase in value before considering any offers to cash in. LAFC, for him, presents the best prospect because United States sports enterprises tend to yield higher returns over the long term.
He cited the recent US$2 billion (S$2.5 billion) sale of the NBA’s Los Angeles Clippers to Steve Ballmer from Donald Sterling, who bought the franchise for US$12.5 million in 1981.
“Of all the football leagues, with their rules and regulations and without relegation, I think the MLS offers the best in terms of appreciation in the value of investments,” said Tan.
“I think the value of clubs there will grow, just as the value in basketball, American football and baseball clubs in the US have grown so much over the years.”
Another winnable game, followed by the international break which will see whether we get to keep the services of Cisse, Tiote and possibly Abeid in January/February.