Hard nosed American investors are replacing the oligarchs and egoists who have invested in English football over the last twenty years. If the deal at Everton goes ahead, eight of the twenty Premier League clubs will have investors from the US.
Hard nosed American investors are replacing the oligarchs and egoists who have invested in English football over the last twenty years. If the deal at Everton goes ahead, eight of the twenty Premier League clubs will have investors from the US.
The resilience of the American economy is undoubtedly one key factor. More specifically, anyone who took on a NBA (basketball) or NFL (American football) team in recent years will have seen a good return. However, it is hard to buy such teams and the franchises cost a lot of money. An investment in a Premier League team, or even more so a Championship team, can cost less.
Bradley Rangell, the founder of IronClad Sports, who advises investors from the US on European football opportunities, told the Financial Times, ‘The US sports market has a very high barrier to entry in terms of acquisition price. While the valuation of European football clubs might be more volatile because of promotion and relegation there is potential for a more attractive return depending on your purchase price.’
Moreover, football has a global appeal. Roger Bennett from the NBC football show Men in Blazers told the Pink ‘Un, ‘The owner of a US sports franchise is big in the US state where their team operates but the Premier League is a global megaphone in Asia, Europe and Africa. Owning a Premier League team makes you globally relevant.’
‘Soccer’ is gaining traction in the US. The average television audience per match in the US last year was 480,000, rising to 1.41m for Manchester United’s game against Arsenal. NBC, which paid $250m for its current television deal, will pay $1bn for six more seasons starting in August.
Whether the Everton deal will go ahead remains to be seen. The prospective investors have already been rebuffed at Swansea City. Everton has a complex ownership structure. There is a separate holding company for the ground and matchday revenues and one for the revenue from television rights.
There is £45m to £50m of debt. Three directors, including Bill Kenwright, own 68 per cent. A few larger shareholders take that up to 75 per cent and the rest is individuals.