Stripped for action (Sunday Telegraph Article 29.04.07)

[Guest Ezekiel 25:17]

Stripped for action

 

Simon Hart and Mark Choueke, Sunday Telegraph

 

 

Manchester United went first. Then Aston Villa and Liverpool. Now Arsenal, Manchester City and Southampton may be about to follow. As super-rich, hard-headed US businessmen swarm over Britain's football clubs, what do they really want? And what will it mean for the beautiful game? Simon Hart and Mark Choueke investigate

George Gillett

and Tom Hicks became the latest American owners when they purchased Liverpool.

 

As the four Glazer brothers drove from Old Trafford to Manchester Airport on Tuesday evening, they must have felt a glow of satisfaction. They had just watched a late goal by Wayne Rooney seal a thrilling 3-2 victory for Manchester United over AC Milan in the first leg of their Champions League semi-final. United's quest for three trophies was still on course and the mood around the 76,000 capacity stadium was euphoric.

 

After the match, the American brothers - Joel, Bryan, Avram and Edward - had signed autographs for a small group of fans before getting into their car. It was a far cry from the scene in Manchester two years earlier when three of them had to be bundled into the back of a police van to escape an angry mob protesting at the £790 million takeover of the club by their father, Malcolm, the owner of the Tampa Bay Buccaneers American football team.

 

But success on the pitch is clearly not enough to please everyone. As the Glazers checked in for their flight, a car mistakenly believed to be theirs was being vandalised in the car park of Manchester's Lowry Hotel. Even on epic Old Trafford nights, the Glazer family's ownership of the club continues to provoke violent opposition.

 

United is not the only club where the new breed of acquisitive American sports tycoons has stirred up strong passions. In the boardroom of Arsenal, one of the more stable institutions in the turbulent world of the Premiership, the prospect of another US sports mogul, the billionaire Stan Kroenke, buying into the north London club recently resulted in the departure of long-serving vice-chairman David Dein, who supported Kroenke's ambitions. It also provoked an unusually outspoken outburst from the club's Old Etonian chairman, Peter Hill-Wood.

 

"Americans are buying up chunks of the Premiership football clubs and not because of their love of football but because they see an opportunity to make money," he said. "They know absolutely sweet FA about our football and we don't want these type of people involved."

 

Despite such hostility, the flow of dollars to Britain shows no sign of drying up. Aston Villa became the second Premiership club to fall into American hands last August when it was snapped up for £62.6 million by Randy Lerner, a billionaire who owns the Cleveland Browns American football team.

 

Two months ago, it was the turn of Liverpool to be swallowed up as George Gillett, the owner of the Montreal Canadiens ice hockey franchise, and Tom Hicks, the owner of the Texas Rangers baseball and Dallas Stars ice hockey teams, joined forces to purchase the club in a deal worth £470 million.

 

Few doubt that Mr Kroenke, allied with Mr Dein, will try to increase his current 12.19 per cent stake in Arsenal, while an American consortium is reported to be ready to pounce on Manchester City should a takeover bid led by a former player, Ray Ranson, fail.

 

On Friday, the Championship side Southampton became the latest target: this time the would-be buyer is Paul Allen, the billionaire co-founder of Microsoft and the owner of the Seattle Seahawks NFL team and Portland Trail Blazers basketball team.

 

Rob Tilliss, chief executive of the New York-based investment bank Inner Circle Sports, who advised Mr Hicks and Mr Gillett on the Liverpool takeover, said battle lines were already being drawn for the remaining Premiership "über-clubs" not yet in American hands.

 

"Tottenham and Newcastle are definitely targets with plenty of interest," he said. "They both have the raw materials required to compete with the top clubs if managed right - good stadiums, guaranteed fan bases and strong brands.

 

"Other mid-table clubs that sit alongside Aston Villa, such as Everton, can make more of a regional play. They're unlikely to qualify for or win the top trophies every year but they can grow and be a lot stronger in their own markets."

 

The archetype of the English football club owner - basically a fan with a large chequebook, in it for love, not money - is quickly being displaced by this new breed of hard-nosed US entrepreneurs. So why their sudden interest in a league that barely registers with the American sporting public, despite the imminent, much-hyped arrival of David Beckham? The answer lies in the massive television and ticket revenues now being generated by the Premier League and the huge commercial potential of the football-mad Far East.

 

Mr Tilliss believes the "monster" growth of television in American football - television contracts in the National Football League grew from $1 billion to $17 billion in the past 15 years - is about to be repeated in the Premier League, which has recently signed three-year domestic and overseas television rights deals amounting to £2.325 billion. "The same people who benefited from the growth of NFL want to be at the heart of English soccer where TV and match-day revenues as well as marketing and brand exploitation can be huge," said Mr Tilliss.

 

A board member of one of the Premier League's richest clubs offered his own view of the American invasion. "The US sports franchise owners have seen the ownership of their own teams increase in value," he said. "They've then had a look at English Premiership clubs, which can call themselves truly global in a way NFL can never be. These guys all mix in the same social circles and belong to the same associations, so once one of them buys themselves a football club, they all want one. It's like a disease."

 

Richard Scudamore, the chief executive of the Premier League, said: "Ten years ago these people wouldn't have given football a second thought but I think that has changed because we've become so popular. One of the consequences of becoming of interest globally is that you're going to attract global interest not just in a fan sense but in an owner sense."

 

He added: "Most industries would welcome this sort of inward investment. Clearly, the caveats to that are: what are the motives behind the investment and how do they conduct themselves when they've made that investment? With those caveats in mind, the investment is to be welcomed."

 

So far, Mr Scudamore has had no reason to doubt the Americans' intentions. "Those that we've had experience of we've found very good to work with and very, very supportive of the collective nature of the Premier League," he said.

 

Ironically, the new American owners will have found the Premier League a more capitalist environment than US professional sport, in which competition is underpinned by the redistributive principles of salary caps, revenue-sharing and the draft system, which allows the bottom club to have first pick of new talent. The Premier League, by comparison, is far more dog-eat-dog. Although its television rights are also sold collectively, only 50 per cent of the proceeds are shared out equally between the 20 clubs. The rest is carved up according to where clubs finish and how many times they are televised live.

 

English clubs also have much freer rein to generate their own revenues by negotiating individual sponsorship deals and selling club products, widening the gap between the richest and the poorest.

 

While broader Premier League policy decisions are protected by a constitution requiring a two-thirds majority of the 20 club chairmen, a growing American axis in the boardroom could have far-reaching consequences for the way the game is run, particularly if the tycoons can form alliances with other foreign owners such as Chelsea's Roman Abramovich or Portsmouth's Sacha Gaydamak.

 

Stefan Szymanski, a professor of economics at Imperial College London who has written books on the business of English football and American sport, says there is one crucial aspect of the Premier League that will stick in the throat of US owners accustomed to closed leagues - promotion and relegation.

 

"I've sat in front of a seminar in the US and had an academic, a professor of economics no less, ask me after I've explained about promotion and relegation: 'So who gets to decide which teams go up and which teams go down?'

 

"It is difficult for them to comprehend but when Americans do eventually understand it, they can see how it's great for the fans and consumers in general but then they say: 'You've got to be kidding if you think that any owner would sign his own death warrant like this'.

 

"Let's have one of these American teams in the Premiership get into the relegation zone and let's see what they do. They will go apeshit. The idea that they are buying into a major-league franchise and then could see themselves ending up playing Chesterfield or Scunthorpe next year would horrify them. That's not what they came here to do."

 

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/29/nkit29.xml&page=1

 

 

Rob Tillis is a former managing director of J.P. Morgan's sports advisory and finance group, and now the managing partner of Inner Circle Sports whose firm advises teams and potential buyers.

 

Just thought that the suggestion that Newcastle and Tottenham are targets for potential US takeovers to be an interesting one. I also wonder about the potential impact upon football of these US investors, particularly with regard to the actual running of the game in England.

 

[shido]

Yeah i'd agree we are perfect for a takeover and i'd take it in a second as i'm sure a large number of us would.

 

Just gotta wait for one american to come along with just enough money to buy off fat fucker fred fuck and it'll instantly get better.

[Guest smoggeordie]

Great, everyone selling out to the yanks then. Next step towards a seeded FA Cup draw and Time Outs every 10 minutes.

[Superior Acuña]

Sunderland are another club that has potential to be up there with such a take over, but the irish have obviously already got them.

 

I'd encourage an american takeover.  I dont think we'd lose too much identity, i think it's that or be left behind.

[shido]

Great, everyone selling out to the yanks then. Next step towards a seeded FA Cup draw and Time Outs every 10 minutes.

 

Just cause americans own the teams don't mean they'll own the league....fundamental changes like those would never happen...just like celtic and rangers will never play in the premiership...

[Mr. Snrub]

All these random billionaires buying football clubs is ruining the game. 

[brummie]

Sunderland are another club that has potential to be up there with such a take over, but the irish have obviously already got them.

 

I'd encourage an american takeover.  I dont think we'd lose too much identity, i think it's that or be left behind.

 

I've said this before, but I really mean it, our new American overlords have been absolutely incredible when it comes to understanding our identity and history, utterly faultless. In fact, they've exceeded our expectations. Whether Gillet and Hicks will do that with Liverpool, I don't know, but I can't knock Lerner thus far.

 

More understanding of what the club means in the 8 months they've been there than we got in 30 years on and off with Ellis' very English ownership.

[thomas]

Great, everyone selling out to the yanks then. Next step towards a seeded FA Cup draw and Time Outs every 10 minutes.

Are you just a bad comedian or a functionally retarded xenophobe?

[Guest Geordiesned]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a shit about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

[Dr. Nguyen Van Falk]

The thought of turning the club we love into a "brand" is sickening.

[Martin Lol]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a s*** about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

 

Newcastle fans are in exactly the same position as Spurs'.  We too have been hit with a season ticket price increase, which is all the more galling after the most successful on field season in quite a few years, £5m coming in from the Puma sponsorship deal and £8.5m coming from Mansion.  And in spite of all that, the season ticket still goes up.  The reason, in Spurs' case ( and probably in for Newcastle too) is simple.  The share issue guaranteed by Enic expires in September, any shares not bought will be purchased by Enic for 16p per share.  The current share price is over £1.  Buying those shares will takes Enic's shareholding to approximately 52%.

 

No doubt in my mind that after September (maybe soon after) Levy will be selling up and moving to the States.  Before he bought Chelsea, Abramovich was interested, before he bought Villa, Lerner was interested.  What I found interesting in the Telegraph article was the talk of associations between USA moguls and Easter Europeans.  In the past few months there has been mention of a couple of Americans but the last year/18 months, the most regular name that keeps cropping up is Vagit Alekperov.  Been to matches at WHL on a number of occasions and also has extensive business interests in USA as well. 

 

But what if he bought Spurs and Belgravia (for example) bought Newcastle?  All that would happen is that all the top clubs would all be owned by moguls and not every team can be the winners.  It may sound good in the short term but I'm depressed by the long term outlook for the game in general here.

 

 

[brummie]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a s*** about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

 

That may be the case, but I recall reading about Shepherd taking the piss out of your fans for the prices you paid for your replica shirts, calling women supporters dogs and calling your biggest hero in years "Mary Poppins".

 

A lot of these suspicions about the new raft of owners might have some grounding in fact, but the traditional British owners have hardly been philanthropic types, have they?

[brummie]

The thought of turning the club we love into a "brand" is sickening.

 

Unfortunately, that happened years ago, at about the time clubs started referring to us as "customers" and not supporters, and at about the time that money took over as the only thing that mattered.

[ChezGiven]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a s*** about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

 

Newcastle fans are in exactly the same position as Spurs'.  We too have been hit with a season ticket price increase, which is all the more galling after the most successful on field season in quite a few years, £5m coming in from the Puma sponsorship deal and £8.5m coming from Mansion.  And in spite of all that, the season ticket still goes up.  The reason, in Spurs' case ( and probably in for Newcastle too) is simple.  The share issue guaranteed by Enic expires in September, any shares not bought will be purchased by Enic for 16p per share.  The current share price is over £1.  Buying those shares will takes Enic's shareholding to approximately 52%.

 

No doubt in my mind that after September (maybe soon after) Levy will be selling up and moving to the States.  Before he bought Chelsea, Abramovich was interested, before he bought Villa, Lerner was interested.  What I found interesting in the Telegraph article was the talk of associations between USA moguls and Easter Europeans.  In the past few months there has been mention of a couple of Americans but the last year/18 months, the most regular name that keeps cropping up is Vagit Alekperov.  Been to matches at WHL on a number of occasions and also has extensive business interests in USA as well. 

 

But what if he bought Spurs and Belgravia (for example) bought Newcastle?  All that would happen is that all the top clubs would all be owned by moguls and not every team can be the winners.  It may sound good in the short term but I'm depressed by the long term outlook for the game in general here.

 

 

 

Very true. The other side of the coin is that you dont want to be left behind if it means additional funds overall for investment.

[Parky]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a s*** about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

 

Newcastle fans are in exactly the same position as Spurs'.  We too have been hit with a season ticket price increase, which is all the more galling after the most successful on field season in quite a few years, £5m coming in from the Puma sponsorship deal and £8.5m coming from Mansion.  And in spite of all that, the season ticket still goes up.  The reason, in Spurs' case ( and probably in for Newcastle too) is simple.  The share issue guaranteed by Enic expires in September, any shares not bought will be purchased by Enic for 16p per share.  The current share price is over £1.  Buying those shares will takes Enic's shareholding to approximately 52%.

 

No doubt in my mind that after September (maybe soon after) Levy will be selling up and moving to the States.  Before he bought Chelsea, Abramovich was interested, before he bought Villa, Lerner was interested.  What I found interesting in the Telegraph article was the talk of associations between USA moguls and Easter Europeans.  In the past few months there has been mention of a couple of Americans but the last year/18 months, the most regular name that keeps cropping up is Vagit Alekperov.  Been to matches at WHL on a number of occasions and also has extensive business interests in USA as well. 

 

But what if he bought Spurs and Belgravia (for example) bought Newcastle?  All that would happen is that all the top clubs would all be owned by moguls and not every team can be the winners.  It may sound good in the short term but I'm depressed by the long term outlook for the game in general here.

 

 

 

I think people are living in wonderland if they think 'these investors' aren't going to start taking money out at some point.

I still think the Glazier deal is against best practice vis a vie the loan primarily being carried by the club.

[Cronky]

The point about the absence of promotion and relegation in top level American sport sounded very valid. An investment in an NFL club is far more secure, because even if you lose on the field, you won't take a big financial hit off the field. Do these guys really know enough about football to realise how easy it is for a club the size of West Ham to just get a bit unlucky and end up in danger?

 

Having said all that, I think it's a risk we'll have to take at some point if we're going to get back up there. Either that, or we get left behind.

[Parky]

The point about the absence of promotion and relegation in top level American sport sounded very valid. An investment in an NFL club is far more secure, because even if you lose on the field, you won't take a big financial hit off the field. Do these guys really know enough about football to realise how easy it is for a club the size of West Ham to just get a bit unlucky and end up in danger?

 

Having said all that, I think it's a risk we'll have to take at some point if we're going to get back up there. Either that, or we get left behind.

 

I think it is quite clear that they don't have the full picture for whatever reason. I mean Arsenal would be in trouble without CL money to an extent.

PL is not a monopoly by any means although they are trying to make it one.

 

 

[brummie]

The point about the absence of promotion and relegation in top level American sport sounded very valid. An investment in an NFL club is far more secure, because even if you lose on the field, you won't take a big financial hit off the field. Do these guys really know enough about football to realise how easy it is for a club the size of West Ham to just get a bit unlucky and end up in danger?

 

Having said all that, I think it's a risk we'll have to take at some point if we're going to get back up there. Either that, or we get left behind.

 

To be honest, given that they're bright enough to have got themselves so incredibly rich in the first place (well, most of them), I'd imagine they're sharp enough to realise that as well.

[brummie]

I think people are living in wonderland if they think 'these investors' aren't going to start taking money out at some point.

I still think the Glazier deal is against best practice vis a vie the loan primarily being carried by the club.

 

Fair point, but you could also look at it from the other side, and consider that Man United are within spitting distance of winning the league, and could very well be about to add the Champions League and the FA Cup to that.

 

If i were a Man United fan, I wouldn't have wanted the takeover to be funded by debt, but if anything was able to make me forget about it, it would be that kind of treble.

[Robster]

I think people are living in wonderland if they think 'these investors' aren't going to start taking money out at some point.

I still think the Glazier deal is against best practice vis a vie the loan primarily being carried by the club.

 

Fair point, but you could also look at it from the other side, and consider that Man United are within spitting distance of winning the league, and could very well be about to add the Champions League and the FA Cup to that.

 

If i were a Man United fan, I wouldn't have wanted the takeover to be funded by debt, but if anything was able to make me forget about it, it would be that kind of treble.

 

Do you think those FC United fans are staying away now

[Martin Lol]

I think people are living in wonderland if they think 'these investors' aren't going to start taking money out at some point.

I still think the Glazier deal is against best practice vis a vie the loan primarily being carried by the club.

 

Fair point, but you could also look at it from the other side, and consider that Man United are within spitting distance of winning the league, and could very well be about to add the Champions League and the FA Cup to that.

 

If i were a Man United fan, I wouldn't have wanted the takeover to be funded by debt, but if anything was able to make me forget about it, it would be that kind of treble.

 

Do you think those FC United fans are staying away now

 

No idea, but FC Utd are still doing well, League Champions of the North West Counties Div 1.

 

How entertaining it's been is debateable, topped the table with 112 pts and a goal difference of +121!!!

 

http://fcumfiles.co.uk/

[Dave]

About four years away from the Football League aren't they now?

[Dave]

Btw, how fucking impressive is this?! http://fcum.tv/

 

Better than .cock tbh.

[Parky]

Good luck to them.

[indi]

"guaranteed fan bases"

 

That's what worries me. The Glaziers have already shown that they purely there for the money and couldn't give a s*** about the fans. A huge season ticket price increasethis season has been followed up by a 15% rise for next season despite the majority of clubs either lowering or freezing their ticket prices. Ok, so Fat Freddy may well raise our ticket prices again but it seems a cert with the money men of America.

 

Newcastle fans are in exactly the same position as Spurs'.  We too have been hit with a season ticket price increase, which is all the more galling after the most successful on field season in quite a few years, £5m coming in from the Puma sponsorship deal and £8.5m coming from Mansion.  And in spite of all that, the season ticket still goes up.  The reason, in Spurs' case ( and probably in for Newcastle too) is simple.  The share issue guaranteed by Enic expires in September, any shares not bought will be purchased by Enic for 16p per share.  The current share price is over £1.  Buying those shares will takes Enic's shareholding to approximately 52%.

 

No doubt in my mind that after September (maybe soon after) Levy will be selling up and moving to the States.  Before he bought Chelsea, Abramovich was interested, before he bought Villa, Lerner was interested.  What I found interesting in the Telegraph article was the talk of associations between USA moguls and Easter Europeans.  In the past few months there has been mention of a couple of Americans but the last year/18 months, the most regular name that keeps cropping up is Vagit Alekperov.  Been to matches at WHL on a number of occasions and also has extensive business interests in USA as well. 

 

But what if he bought Spurs and Belgravia (for example) bought Newcastle?  All that would happen is that all the top clubs would all be owned by moguls and not every team can be the winners.  It may sound good in the short term but I'm depressed by the long term outlook for the game in general here.

 

 

 

Very true. The other side of the coin is that you dont want to be left behind if it means additional funds overall for investment.

 

But surely the problem comes when only a handful of clubs are mega-rich, doesn't it?

 

If everyone's got a billionaire owner wouldn't that mean increased competition and therefore a more interesting league?

 

At the moment no-one other than Chelsea, Man U, Arsenal and Liverpool have a chance of winning the league and they've even got the cups sewn up as well this year. That's a really boring situation for the rest of us, but if Villa, Spurs and us were added to that group, surely that's got to make it better, not worse.