Thursday, March 28, 2024

Foreign investors could destroy Premier League clubs

George-Gillett-Tom-HicksThere is a common factor at Liverpool, Portsmouth and West Ham. That common factor is that foreign investors have put the clubs in major financial trouble.

Money men

Don’t get me wrong I don’t think that major foreign investment is a bad thing but the people investing in English clubs seem to only have their own interests at heart.

At the end the day football has became a business but to us football fans its about more than just money. We love our clubs whether we are the richest in the league or the poorest.

Unfortunately for most of us fans we don’t have the financial clout of some of these businessmen. They see a chance to make money and they take advantage. In the process sometimes putting the future of their new toy in jeopardy.

American dream gone sour

A good example of this is George Gillett and Tom Hicks at Liverpool. Former owners the Moore’s family had been loyal to Liverpool for decades. However they realised they no longer had the funds to compete with the likes of Chelsea and Manchester United. They saw Hicks and Gillett as their knights in shining armour. What they didn’t realise was that the pair would put the club into a financial hole that they may never get out of.

Previously under the Moores family the club had a manageable debt, like most top Premier League clubs. They were comfortable but the team didn’t have the quality to challenge for the Premier League title. A few years later and Liverpool still don’t have the quality to compete for the title, yet now they are competing with massive debts instead.

Far Eastern no promise

Its not just Gillett and Hicks who have bought Premier League clubs and later found themselves out of their depth financially. Portsmouth overspent under French born businessman Alexandre Gaydamak. He was hit hard by the credit crunch and Portsmouth were in huge financial trouble.

Gaydamak then sold his shares and ownership of the club to Sulaiman Al-Fahim, who sold the club just 40 days after buying it. He claimed he had made £70million from the sale of the club and retained all of the clubs real eastate assets. The man he sold the club to is Saudi property developer Ali Al-Faraj.

The clubs financial problems haven’t eased under Al-Faraj and players have even went unpaid in recent weeks. Pompey seem to be getting used and abused by every Far East businessman with a taste for money. The club could go into administration and that would mean a 10 point deduction in the Premier League. A points deduction would mean certain relegation considering they have only collected 11 points in the Premier League this season.

Icy waters

West Ham have also suffered at the hands of foreign owners. Their owners were also heavily hit by the world wide credit crunch and had to pull out of the club. Former chairman Eggert Magnusson sold his shares to business partner Bjorgolfur Gudmundsson. Gudmundsson was then declared bankrupt and his creditors  Icelandic based company CB Holding took control of the club.

The club are now in the big trouble. Not only are they in trouble money-wise but are also struggling on the pitch. The Hammers are currently second from bottom in the Premier League and struggling to find any form. Manager Gianfranco Zola wont have much cash to spend in the January transfer window, so his small injury-prone squad could be in for a long disappointing season.

Success stories

There are of course a few success stories. The main one has to be Roman Abramovich transforming Chelsea into one of the biggest brands in world football. He has spent hundreds of millions of his money on a club he now seems to love. Lots of people were dubious when he first arrived but the Russian has delivered trophies and developed the club as a whole. I cant imagine many Chelsea fans would argue that he has changed the the club for the better.

City transformed

There is also Sheikh Mansour at Manchester City. As everybody in the football world knows his consortium has came into Eastland’s and transformed the side. The club have gone from a team in midtable going nowhere to a side who are competing for a Champions League spot.

Not all bad

The stories of Mansour and Abramovich prove that not all foreign investors are just interested in their own gains. Some buy football clubs to enjoy the spectacle and develop their asset. However these saviours are few and far between and any fan hoping for serious foreign investment should be careful what they wish for, as they might not get their fairytale ending.

ABOUT THE AUTHOR

David Nugent


David is a freelance football writer with nearly a decade of experience writing about the beautiful game. The experienced writer has written for over a dozen websites and also an international soccer magazine offline.
Arguably his best work has come as an editorial writer for Soccernews, sharing his good, bad and ugly opinions on the world’s favourite sport. During David’s writing career he has written editorials, betting previews, match previews, banter, news and opinion pieces.

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  • Chelsea FC Fan

    0 0

    Just another one of my 20,000 soccer thoughts for the day…

    Foreign investors…or any investor for that matter…should take in to
    account what the game means to people…and to understand just how much it means, take a look at what happens when a team scores…the goal scorer, or team, runs to the fans, kisses that badge like it is all he lives for and the crowd erupts with approval…if investors can show this kind of commitment to the club, (obviously in their own corporate way, however running around the pitch wearing and kissing the team jersey wouldn’t hurt), then there is no way this type of investment can hurt the club…

    Gooner – it’s no coincidence that you would love two great teams like that…they have superb technical skills and their game is so much about the skills than it is about the physical aspect of the game that it makes them two very exciting teams to watch.

    I hope the MLS recruits more talent from England (and to some extent, other parts of the world)…ideally, I would like to see the MLS modelled after the EPL …these types of players will help build a strong foundation for the up and coming Canadian teams who could use the structure and style of play.

    Anyway, I should go do something else besides think and write about Soccer…I should have left work about 30 mins ago…

    yes – my name is Chelsea FC Fan and i’m a Soccerholic

  • gooner-11

    0 0

    Good read… though I haven’t paid much attention to business aspects of some of the teams I like, this makes me feel like I probably should.

    I wonder how much of a coincedence it is that the 2 teams which I LOVE seam to have great management and ownership- Arsenal FC and Detroit Red Wings from the National Hockey League…

    I hope more than anything that the Vancouver Whitecaps, who will be joining TFC in the MLS in 2011, will be a team that I will grow to love also. Things look good with management consisting of some key figures such as Tottenham’s Paul Barber, Vancouver soccer icon Bob Lenarduzzi, and even Steve Nash (whose younger brother actually plays for Whitecaps) who can hopefully convince some of his freinds to go the way of Beckham and Ljungberg – freinds apparently including Alessandro Del Piero, Thierry Henry, Canadian Owen Hargreaves, Massimo Ambrosini and even Steve McManaman.
    but only time, and undoubtedly money too, will tell…

  • Chelsea FC Fan

    0 0

    Thanks Dave – I really appreciate you all for taking the time to get this issue out in the open.

    It is a particularly sensitive subject to me b/c I love sports and I don’t like how artificial it has become…especially in North America…in Europe, I see the big clubs are already moving in this direction but the game still has that feel to it that just hits home with you…it’s hard to describe, but there is something much more personal with Soccer than there is with any other sport i’ve encountered…maybe it’s b/c it is so team oriented and there are so many more players, cities, countries/regions and fans involved, that there seems to be a bigger/stronger connection to the game…maybe i’m just a soccerholic (haha)…whatever it is, it is beautiful…and I hope the Liverpool fans can continue the great traditions and passion for their club…

    I can’t remember who posted the article about it (thanks agains whoever did) but when I read it and came to learn how the Ivory Coast were able to bring peace to warring regions in their country through a soccer game, I was reminded as to how powerful sports can be and the feelings people share for their teams…this is being challenged now at the club level as investors want to turn profits higher and higher every year…the international level seems to not have been impacted as much but who knows…I can’t imagine FIFA allowing foreign investments in to International teams – that just sounds stupid – but, where there’s money, there’s a will and a way.

    Anyways, I am not against foreign investment as it helps grow the club and a guy like Abramovich has made the whole experience seem favorable…so it’s not all bad, but it can be.

    Good luck to Liverpool

  • David Nugent

    0 0

    Wow Chelsea FC Fan, that was a superb comment about an issue obviously close to your heart and your home. Your comment was nearly as long as my article!

    I appreciate your contribution. I don’t know much about Canadian sports to be honest, but lets hope football doesn’t get to the stage of the sports you have mentioned above.

  • Chelsea FC Fan

    0 0

    Great eye-opener on the modern corporate world of Sports.

    Being in North America, Toronto,Canada specifically, I continue to witness the tremendous exploitations of sports teams around me. Corporations are putting their foot in every crevice they can and are completely sucking the life out of sports teams through over-priced and under-achieving teams while neglecting the simple things that make sports, teams and fans so great.

    Every owner should have the love and respect for the sport and have that drive to compete and win! Not just make money…when owners are concerned with how much they will earn, there is no way that can translate in to making decisions that’s best for the team…it will always be what’s best for the owner.

    Case in point: the Toronto Raptors. Is it just me, or is it odd that the masterminds behind this great organization are building a team based on the demographics of the city, rather than putting together a contending team? I’m not even speculating here…it is true that the city of Toronto is one of the most multi-cultural in the world and the Raptors are recruiting talent based on those demographics in order to draw numbers to the games. It is also true that many players in the NBA don’t want to come to Canada, so the Raptors have to look elsewhere…in my mind, all the flags would be going off here – ‘why are we building a team that no great player in the league wants to play for?’, but to the business man, there is great opportunity here…have you read the news on the Raptors lately? I am not suggesting you do – it is depressing…take my word for it.

    Not to be sarcastic, but every top level sports team in Toronto is horrendous, but very successful when it comes to the bottom line – except for the Blue-Jays tho…I don’t see how they only get 15,000 (out of a 60,000 capacity) for a game, give away tickets for $2, never win anything, just traded away one of the top 3 pitchers in the league and still make money…but the business behind this team sure is making money (venue rentals, parking, merchandising, those stupid bobble heads! etc. etc.)…

    I show some support for the TFC b/c they are relatively new to the sportsworld, and I have such a huge love for the game…but the city does not show support – the city refused – R-E-F-U-S-E-D – to lay a grass turf down for their hometown team until the players started complaining of injuries, the fans started complaining on behalf of the players, the experts were preaching that professional teams do not play on artificial turf and then Real Madrid showed up and they wasted $250,000.00 to lay down a grass turf 48hrs prior to the game only to be torn up and donated 24hrs after the game…the pitch was coming apart as they played (embarassing!)…but those invested knew it did not matter – the tickets for that game were sold out in hours at premium prices (yes – the stadium advertises that certain events (and there is no outline of what constitutes a premium event) are subject to premium priced tickets…not sure if that is normal, but it is fukt up regardless).

    Now, i’m painting all business with the same brush here, but you should also know that there are a few organizations out there that become a part of the world of sports because of their love for the game…not their love of money to be made in the game. Roman Abramovich is a prime example of someone who is chasing that glory that every fan wants to see.

    It would be great to get more insight on this issue especially with what’s happening in the EPL.

    I haven’t used very many examples from the world of soccer, but maybe that’s a good sign that the profit-vultures have not infiltrated the sport as much as others have been…and maybe that’s a sign that the team, or the sport, can still be saved.

  • Chelsea FC Fan

    0 0

    Great eye-opener on the modern corporate world of Sports.

    Being in North America, Toronto,Canada specifically, I continue to witness the tremendous exploitations of sports teams around me. Corporations are putting their foot in every crevice they can and are completely sucking the life out of sports teams through over-priced and under-achieving teams while neglecting the simple things that make sports, teams and fans so great.

    Every owner should have the love and respect for the sport and have that drive to compete and win! Not just make money…when owners are concerned with how much they will earn, there is no way that can translate in to making decisions that’s best for the team…it will always be what’s best for the owner.

    Case in point: the Toronto Raptors. Is it just me, or is it odd that the masterminds behind this great organization are building a team based on the demographics of the city, rather than putting together a contending team? I’m not even speculating here…it is true that the city of Toronto is one of the most multi-cultural in the world and the Raptors are recruiting talent based on those demographics in order to draw numbers to the games. It is also true that many players in the NBA don’t want to come to Canada, so the Raptors have to look elsewhere…in my mind, all the flags would be going off here – ‘why are we building a team that no great player in the league wants to play for?’, but to the business man, there is great opportunity here…have you read the news on the Raptors lately? I am not suggesting you do – it is depressing…take my word for it.

    Not to be sarcastic, but every top level sports team in Toronto is horrendous, but very successful when it comes to the bottom line – except for the Blue-Jays tho…I don’t see how they only get 15,000 (out of a 60,000 capacity) for a game, give away tickets for $2, never win anything, just traded away one of the top 3 pitchers in the league and still make money…but the business behind this team sure is making money (venue rentals, parking, merchandising, those stupid bobble heads! etc. etc.)…

    I show some support for the TFC b/c they are relatively new to the sportsworld, and I have such a huge love for the game…but the city does not show support – the city refused – R-E-F-U-S-E-D – to lay a grass turf down for their hometown team until the players started complaining of injuries, the fans started complaining on behalf of the players, the experts were preaching that professional teams do not play on artificial turf and then Real Madrid showed up and they wasted $250,000.00 to lay down a grass turf 48hrs prior to the game only to be torn up and donated 24hrs after the game…the pitch was coming apart as they played (embarassing!)…but those invested knew it did not matter – the tickets for that game were sold out in hours at premium prices (yes – the stadium advertises that certain events (and there is no outline of what constitutes a premium event) are subject to premium priced tickets…not sure if that is normal, but it is fukt up regardless).

    Now, i’m painting all business with the same brush here, but you should also know that there are a few organizations out there that become a part of the world of sports because of their love for the game…not their love of money to be made in the game. Roman Abramovich is a prime example of someone who is chasing that glory that every fan wants to see.

    It would be great to get more insight on this issue especially with what’s happening in the EPL.

    I haven’t used very many examples from the world of soccer, but maybe that’s a good sign that the profit-vultures have not infiltrated the sport as much as others have been…and maybe that’s a sign that the team, or the sport, can still be saved.

  • David Nugent

    0 0

    Wow Chelsea FC Fan, that was a superb comment about an issue obviously close to your heart and your home. Your comment was nearly as long as my article!

    I appreciate your contribution. I don’t know much about Canadian sports to be honest, but lets hope football doesn’t get to the stage of the sports you have mentioned above.

  • Chelsea FC Fan

    0 0

    Thanks Dave – I really appreciate you all for taking the time to get this issue out in the open.

    It is a particularly sensitive subject to me b/c I love sports and I don’t like how artificial it has become…especially in North America…in Europe, I see the big clubs are already moving in this direction but the game still has that feel to it that just hits home with you…it’s hard to describe, but there is something much more personal with Soccer than there is with any other sport i’ve encountered…maybe it’s b/c it is so team oriented and there are so many more players, cities, countries/regions and fans involved, that there seems to be a bigger/stronger connection to the game…maybe i’m just a soccerholic (haha)…whatever it is, it is beautiful…and I hope the Liverpool fans can continue the great traditions and passion for their club…

    I can’t remember who posted the article about it (thanks agains whoever did) but when I read it and came to learn how the Ivory Coast were able to bring peace to warring regions in their country through a soccer game, I was reminded as to how powerful sports can be and the feelings people share for their teams…this is being challenged now at the club level as investors want to turn profits higher and higher every year…the international level seems to not have been impacted as much but who knows…I can’t imagine FIFA allowing foreign investments in to International teams – that just sounds stupid – but, where there’s money, there’s a will and a way.

    Anyways, I am not against foreign investment as it helps grow the club and a guy like Abramovich has made the whole experience seem favorable…so it’s not all bad, but it can be.

    Good luck to Liverpool

  • gooner-11

    0 0

    Good read… though I haven’t paid much attention to business aspects of some of the teams I like, this makes me feel like I probably should.

    I wonder how much of a coincedence it is that the 2 teams which I LOVE seam to have great management and ownership- Arsenal FC and Detroit Red Wings from the National Hockey League…

    I hope more than anything that the Vancouver Whitecaps, who will be joining TFC in the MLS in 2011, will be a team that I will grow to love also. Things look good with management consisting of some key figures such as Tottenham’s Paul Barber, Vancouver soccer icon Bob Lenarduzzi, and even Steve Nash (whose younger brother actually plays for Whitecaps) who can hopefully convince some of his freinds to go the way of Beckham and Ljungberg – freinds apparently including Alessandro Del Piero, Thierry Henry, Canadian Owen Hargreaves, Massimo Ambrosini and even Steve McManaman.
    but only time, and undoubtedly money too, will tell…

  • Chelsea FC Fan

    0 0

    Just another one of my 20,000 soccer thoughts for the day…

    Foreign investors…or any investor for that matter…should take in to
    account what the game means to people…and to understand just how much it means, take a look at what happens when a team scores…the goal scorer, or team, runs to the fans, kisses that badge like it is all he lives for and the crowd erupts with approval…if investors can show this kind of commitment to the club, (obviously in their own corporate way, however running around the pitch wearing and kissing the team jersey wouldn’t hurt), then there is no way this type of investment can hurt the club…

    Gooner – it’s no coincidence that you would love two great teams like that…they have superb technical skills and their game is so much about the skills than it is about the physical aspect of the game that it makes them two very exciting teams to watch.

    I hope the MLS recruits more talent from England (and to some extent, other parts of the world)…ideally, I would like to see the MLS modelled after the EPL …these types of players will help build a strong foundation for the up and coming Canadian teams who could use the structure and style of play.

    Anyway, I should go do something else besides think and write about Soccer…I should have left work about 30 mins ago…

    yes – my name is Chelsea FC Fan and i’m a Soccerholic

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