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Articles on football club takeovers and related issues
As clubs looking for buyers and investors welcome the new wave of Chinese investors, it is as well to remember that not all of them may be of high quality.
The tale of Birmingham City is a cautionary one. Acquired in 2009 by Carson Yeung, a former hair salon proprietor, the team was relegated to the Championship and remains there for now. Yeung was jailed in Hong Kong in 2014 for money laundering and the club remains barely known in China.
Foreign owners sometimes acquire clubs in order to boost their brands, both in their domestic market and globally. However, when the Indian conglomerate Venky’s took over Blackburn Rovers, it quickly became apparent that, while they might know something about chickens, they didn’t understand much about football.
The one time Premier League champions have been effectively run into the ground. At the bottom of the Championship, attendances are falling and financial problems are increasing. Turnover has fallen from £58m a year to £12m a year under Venky’s.
We have been focusing a great deal in the last month or two on the state-led long march of Chinese investors into English football. This has been confirmed by the interest of China Everbright, a state-backed investment company, in making a bid for Liverpool.
One of the difficulties with reports about takeover bids is sorting out those which are substantive and those which are flights of the imagination. There have been cases in the past of bidders for football clubs not having the funds they claimed to possess or promised to invest. In one or two cases they actually proceeded to acquistion with disastrous results for the club concerned.
Despite their surprise victory over Leicester City on Saturday, Hull City are in deep trouble. There is no permanent manager, the squad lacks depth and the Allam family want out. Their relationship with Hull City fans has been poisonous since they tried to change the name of the club to Hull Tigers. Demonstrations by fans against the owners have continued.
Global investors are increasingly focusing on Leagues 1 and 2 as they seek investment opportunities in football, according to the latest annual survey of football finance directors by accountants BDO.
No less than 73 per cent of League Two clubs have received an approach from potential investors in the last year. Investors are interested in the potential for growth in clubs with stable business models.
The Chinese long march into European football continues with the acqusition of AC Milan from Silvio Berlusconi by a state-backed Chinese group. Finnvest, the holding company controlled by Mr Berlusconi, has stated that it has signed a preliminary contract with a group of Chinese investors for a 99.93 per cent stake in AC Milan that valued the club at €740m including debts of €220m.
West Bromwich Albion are the third Midlands club to go into Chinese ownership in the last few months, following Aston Villa and Wolverhampton Wanderers.
Yunki Golao Sports Development are the new owners in which Guochan Lai is the majority shareholder. He has been associated with the development of ‘eco towns’ in the past.
Some clubs from relatively small towns have the name ‘City’ after their title, e.g., Ely City. This is because they are the home to a cathedral, but the secular status of being a ‘city’ is quite different. It has been recently granted to Brighton and Wolverhampton, for example.
The prospective takeover of Torquay United has reached crisis point with bidders Gaming International issuing what the Torquay United Supporters Trust has described as an ultimatum to Torbay Council.
It has now emerged that Swindon-based Gaming International, operating through their subsidiary Riviera International Limited, want to take ownership of Plainmoor and then build a new ground elsewhere. Torbay Council currently own the freehold of Plainmoor. It is quite an extensive site in a built up area of Torquay with development potential.