Political Economy of Football
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Second Bid For West Ham - 4/09/2006

A second bid for West Ham football club, valued by Russian sources at 100m, has been made by Georgian businessman Badri Patarkatsishvili who also owns Dynamo Tiblisi. He is also a business associate of exiled Russian businessman Boris Berezovsky and also has links with the first bidder, Kia Joorabchian. The broader significance of these developments is that international investors are now looking at Premiership clubs which are outside the top group but are thought to have the potential to join that group given sufficient investment. Joorabchian in particular represents a new breed of football entrepreneur, a mixture of agent, management consultant and high stakes investor. However, one British daily newspaper has been highly critical of his business track record. His 80m bid for West Ham is thought to be backed by a consortium of Iranian investors.

West Ham is essentially a family owned club. The majority shareholders are low profile chairman Terrence Brown and two descendants of the men who founded the club in 1895, Charles Warner and Martin Cearns. Brown controls 40 per cent of the shares. Warner, a great grandson of Arnold Hills, the club founder, owns another 21 per cent, while Cearns, the son of a former chairman, holds 9.1 per cent. The club own their stadium and have other valuable assets including a training ground at Chadwell Heath and a community centre. However, there are debts of 21 million. Bidders are attracted by the fact that the club is financially viable but undervalued with the potential to obtain much higher revenue.

Joorabchian was until recently the director of Media Sports Investments (MSI), a company that runs the football department of the Brazilian club Corinthians. By investing in better players, he tripled the club's sponsorship, doubled crowds and increased revenue by 500 per cent in the first year. In his first season the club won the league. Joorabchian tried to put together a bid to take over Arsenal in 2004. His time at MSI has been controversial because of his links with Boris Berezovsky whose extradition is sought by Russia on criminal charges. Joorabchian strenuously denies that there is any Russian money either behind him or MSI even though Berezovsky has flown to Brazil and promised to build Corinthians a new stadium. Patarkatsishvili also claims to be a friend of Joorabchian, making it difficult to disentangle the bids at this stage. It seems likely, however, that the Irons will have new international owners before long.


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