Premier League is rich boys' toy
(Reuters)Updated: 2006-11-24 10:56
LONDON, Nov 24 - English Premier League clubs are being bought by overseas investors because they offer potentially huge returns thanks to their large regular incomes, lucrative television revenues and international brand values.
Despite FIFA president Sepp Blatter saying this week that the biggest threat facing the game was foreign investors wanting football to serve them instead of them serving the game, English clubs continue to prove attractive to men with large sums to spend.
West Ham United became the sixth Premier League club to be acquired by overseas interests this week with Icelandic Eggert Magnusson, 59, a member of UEFA's Executive Committee, leading a consortium backed by billionaire compatriot Bjorgolfur Gudmundsson.
They have paid 85 million pounds ($161.5 million) to acquire the club whose major, but sporadic, successes since they were formed in 1900 have come in cup competitions.
West Ham have never been champions of England but famously did provide three players -- Bobby Moore, Geoff Hurst and Martin Peters -- to the England side that won the World Cup in 1966.
Whether West Ham will ever be able to challenge the likes of Manchester United, Liverpool, Arsenal or Chelsea and establish themselves as serious contenders for major honours is open to doubt but there is no questioning the potential of the club whose home at Upton Park in east London holds 35,000.
That capacity could double if they were to move into the Olympic Stadium after the 2012 London Games.
BOYS' TOYS
Analyst Bill Gerrard of Leeds University Business School says that a club's past history does not really have a bearing on its future potential for a big-money investor.
"The English Premiership is the top domestic football league in the world," he said.
"It's got the best international coaches and players. It attracts an international audience and is the ultimate toy for the very rich boy."
Analyst Alan Switzer of Deloitte & Touche said the financial and promotional lure of the Premier League could not be ignored.
"The top 20 Premiership clubs generated combined revenue of 1.35 billion pounds ($2.59 billion) in 2004-05, with its nearest rival the Italian Serie A at 904 million pounds ($1.73 billion)," he told Reuters.
"English clubs benefit from modern stadiums with extensive corporate facilities hence higher ticket prices than elsewhere in Europe. The clubs are very successful at extracting value from their stadia."
The trend of non-British businessmen buying English football clubs started when Egyptian businessman, and owner of top London department store Harrods, Mohamed Al Fayed bought Fulham FC in 1997 for 30 million pounds ($49 million).
In 2003 Russian billionaire Roman Abramovich bought Chelsea for 60 million pounds ($99.50 million).
Texan oil billionaire Martin Glazer paid 790 million pounds ($1.41 billion) to acquire Manchester United in 2004, while Aston Villa's new owner is another American tycoon, Randy Lerner, who bought the club for 62.6 million pounds ($119 million).
Russian-French businessman Alexandre Gaydamak bought Portsmouth in 2006 for
32 million pounds ($58.46 million) from its former owner and another overseas
investor, Milan Mandaric.
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