“Sugardaddies “ and the Mega-Money investors coming into the game

[glorygloryeze]

There have been some very detailed and interesting posts in this thread; special thanks to SWP29 and DubaiSpurs that open a sort of lid on the Arab/Emirate interest in Big Football investment.=D>
Thanks to all that have contributed; I'd like to think this thread can be used to discuss different financial and marketing theories that surround football and the seemongly unending thirst to 'invest'. Perhaps it might reflect the global economic 'games' that go on.

Somebody earlier mentioned the wierd situation at Notts County some years ago; I wonder if anybody can shed some light on that situation which is less exotic but potentially carries much more intrigue closer to home (perhaps even more relevant?)

Anyway, carry on..

 

[SWP29]

There have been some very detailed and interesting posts in this thread; special thanks to SWP29 and DubaiSpurs that open a sort of lid on the Arab/Emirate interest in Big Football investment.=D>
Thanks to all that have contributed; I'd like to think this thread can be used to discuss different financial and marketing theories that surround football and the seemongly unending thirst to 'invest'. Perhaps it might reflect the global economic 'games' that go on.

Somebody earlier mentioned the wierd situation at Notts County some years ago; I wonder if anybody can shed some light on that situation which is less exotic but potentially carries much more intrigue closer to home (perhaps even more relevant?)

Anyway, carry on..

I agree. I could reply extensively to what people have said about City since the last time I logged in, but we seem to have hijacked glorygloryeze's thread. I hope the time to discuss my club's current successes on the pitch crops up again, but in a thread more relevant. I don't have much info on other clubs, just a few links to "theories" about the owners of Blackburn which are very interesting. I too am also intrigued by what happened at Notts County, something many people seem to have forgotten about…

EDIT: While I'm here, I'll just add this much. Before the Sheikh and his 'petrodollars' came into City, we were days from ruin. We needed a buyer, anyone to keep us going. It's not like we chose to be taken over by ADUG. The club was for sale, we pitched to the Sheikh's reps and they took it. We (the fans) didn't know the potential we had to become a major club (not that I'm suggesting we are one yet), and apparently no-one else in the country did either. Of course there is the romantic's way of winning the league, which is building up from ground-level off your own resources. The Germans do it very well and it's very admirable. But outside of that, only Montpellier last season comes to mind.

 

[Bedfordspurs]

I agree. I could reply extensively to what people have said about City since the last time I logged in, but we seem to have hijacked glorygloryeze's thread. I hope the time to discuss my club's current successes on the pitch crops up again, but in a thread more relevant. I don't have much info on other clubs, just a few links to "theories" about the owners of Blackburn which are very interesting. I too am also intrigued by what happened at Notts County, something many people seem to have forgotten about…

EDIT: While I'm here, I'll just add this much. Before the Sheikh and his 'petrodollars' came into City, we were days from ruin. We needed a buyer, anyone to keep us going. It's not like we chose to be taken over by ADUG. The club was for sale, we pitched to the Sheikh's reps and they took it. We (the fans) didn't know the potential we had to become a major club (not that I'm suggesting we are one yet), and apparently no-one else in the country did either. Of course there is the romantic's way of winning the league, which is building up from ground-level off your own resources. The Germans do it very well and it's very admirable. But outside of that, only Montpellier last season comes to mind.

Well referenced regarding Germany, a great example of how a competitive but still commercial league should be run.

I heard a rumour from a taxi driver at Glasgow airport that Blackburn were financed by some "dodgy" people using the club as a way of "losing" their cash. These alleged rumours were also on a website I saw a while back but you would never know with the amount of cash used in football.

 

[Hotdoggspur]

Well referenced regarding Germany, a great example of how a competitive but still commercial league should be run.

I heard a rumour from a taxi driver at Glasgow airport that Blackburn were financed by some "dodgy" people using the club as a way of "losing" their cash. These alleged rumours were also on a website I saw a while back but you would never know with the amount of cash used in football.

the Glaswegian cabbie was definitely in the swindle , blimey , did he have any intel on Rangers being leveraged by total bandits and future urn bru revenue streams

 

[SPURS]

Sheikh/Abu Dhabi at Emirates Marketing Project............Promoting Abu Dhabi worldwide, especially in Europe. Along with the Qataris have invested in other sports too. It's not just sport though, Arabs own a lot of real estate in London and Paris. I think it was them who built The Shard? They probably do like football but are not mad about it and they are also investing things like infrastructure.

Randy Lerner.........Trustafarian, inherited Daddy's wealth. Attended University in England and thought it would be 'cool' to buy the club he watched. Clearly nostalga, sentimentality and O'Neils blarney reeled him in. Now he's realised Villa is bleeding him dry, massive cuts have been implemented. Verdict: An innocent abroad.

Kroenke & Glazers..........Typical Americans dazzled by the extreme wealth and big numbers being banded about. Not interested in football and probably don't even understand the rules. Thought they could make big money but like most Americans, just do not understand European football. The fact that to be successful requires massive investment or massive debt. Americans should stay away from footbal IMO, it's a combo that does not mix.

Roman Abramovich.......There is not really another owner in world football like him. Genuine football fan, clearly. Wants to be the unofficial manager and the club is a toy or a hobby for an extremely rich, relatively young man. He's a weird case because although he seems to love the Glory and his ego, he never has actually spoke publicly even to Chelsea TV. The influx of rich Russians obviously brought him to these shores and he owns lots of London property, educates all his children in England etc. The vipers nest that is Russian business and politics has seen other Russians make London their home and not just football they're interested in but one owns London Evening Standard and Independent newspapers, others have got close to politicians (Deripaska and Osborne). It's all very murky, there are even attempted assinations and actual assinations taking place between Russian factions in London (Gerbuntsov, Litvinenko etc). What is strange about Abramovich is that, apparently I read before he moved him and his family to London, he had never actually been seen in public and there were no photos. Russian people did not know what he looked like. Then suddenly he buys Chelsea and becomes world famous, never out the papers (front and back) and goes about things in a way that attracts the most attention like parading through the streets of West London on an open top bus, holding Trophy's aloft. All very strange.

The rest like Venky's etc are just Charlatans!

 

[milo]

I think that the amount of money involved in the new TV rights deal due to start in 2013/14 will see even more foreign investors seek to buy English clubs and is the reason for the influx of new owners in the Championship. Next season the bottom Premiership club will receive more than City got for winning it last season. It is a 71% increase over the old deal and is eye watering. The gap between rich and poor just got larger and a fair few clubs will gamble big to try and get into and stay in the Premier League.

 

[Jordinho]

Manchester United isn’t a soccer team—at least not in the business sense.

The Cayman Islands holding company that owns one of the world’s most popular sports franchises registered this week to go public on the New York Stock Exchange. As its filing with the Securities and Exchange Commission shows, the company is an advertising-dependent content producer that enjoys strong brand visibility and loyalty. In other words, it’s in the media business.

This could make the idea of Manchester United going public feel a little less alien to investors in the U.S., where private ownership of sports teams is nearly universal. (Remember the great Cleveland Indians IPO of 1998? Didn’t think so.) At the same time, investors haven’t been especially kind to media-themed IPOs over the past year.

Manchester United brought in nearly 60 percent of its 2011 revenue—almost $300 million—through traditional media company channels: selling access to content and selling ads tied to that content. The company brought in more than $180 million by selling broadcasting rights to the team’s matches and more than $85 million in corporate sponsorships and tie-ins. New media and mobile accounted for another $27 million. The rest of the money comes from ticket sales ($172 million) and team-branded merchandise ($48.6 million).

Each of those revenue streams rises or falls depending on the power of the Manchester United brand, which itself rises or falls depending on how well the team plays. Historically, it has played legendarily well. But fans have complained that Man U’s ability to compete for top players has suffered since taking on massive debt in U.S. businessman Malcolm Glazer’s $1.5 billion leveraged buyout of the team in 2005. The $100 million the team hopes to raise in the IPO will go to pay down its debt, which totaled about $657 million as of March 31.

“That’s not exactly what the market really loves,” Georgetown University finance professor Reena Aggarwal said of the team’s red ink.

Nor does it like debt-ridden sports teams going up against ultra-rich guys who focus on winning first, and what it costs second. In its SEC filing, Manchester United says competition for top players has become intense as billionaire sheiks and Russian oligarchs add soccer teams to their personal portfolios: “Recent investment from wealthy team owners has led to teams with deep financial backing that are able to acquire top players and coaching staff, which could result in improved performance from those teams.”

That dependence on a few key players to underwrite a company’s entire brand raises Manchester United’s risk profile, which could lead to a bumpy ride for its shares, Aggarwal says. “It’s not a diversified business,” she says. “It’s a very concentrated kind of business.”

Like Facebook and Google, Manchester United’s IPO will create preferred shares that will give the owners greater voting power than ordinary shareholders, which like Mark Zuckerberg will let Glazer keep control over his company even after the public gets a piece of it.

And also like Facebook, and every other social media company that has tested the public markets recently, Manchester United is pinning its appeal to investors on its ability to monetize the 659 million “followers” it claims to have worldwide. Facebook boasted of more than 800 million users in its IPO filing, but so far they haven’t helped its share price. Nor have big user bases done much for Yelp, Zynga or Angie’s List shares either since they went public within the past year. And Google’s returns have been mediocre during the same period.

Certainly, Manchester United, Google, Facebook and every other Internet darling aren’t in the exact same business, but they do have similarities. They all monetize eyeballs, sell ads, and are competing for people’s time by offering some form of content/entertainment or in Google’s case, services. For investors to sink their money into it, Man U needs to prove it can consistently hold people’s attention, not just in the competition with other sports teams, but in the competition with all your friends’ Facebook photos.

Maybe investors will like that they can see Manchester United’s players on the field and their frenzied fans waving red in the stands. There’s a concreteness to a sports team even if like other media companies most of its money comes from selling experiences and cachet tied to its brand, rather than a physical good. Aggarwal says the same intensity that fans bring to the team could also lead them to buy the stock.

But sports dynasties seldom last forever. In soccer as in Silicon Valley, a team that can’t keep up with its rivals quickly loses its fan base. Those fans might take defeat even less well when a missed Wayne Rooney shot means they also lose their shirts.

http://www.wired.com/business/2012/07/manchester-united/

 

[P.D.]

Dont see why anyone would buy those shares to be honest, I dont think there is a huge amount of cash to be raised there.

Shares priced at $16-20 meaning at an upper price thats £210m based on them selling 16.7m shares. Is the club really worth over £2bn considering liabilities will still be over £300m after this.

Only a fan would be interested I would have thought, guess in Asia they are huge and some billionaire may fancy getting 5% or something.

 

[jts1882]

So an owner who took the most successful football (all sporting?) business in the world and lumbered it with huge debt, while paying £500 million to bankers for the privilege, is offering shares, where there are no dividends or meaningful voting rights and the owners responsible for the debt keep full control. And this is supposed to be a good deal - no dividends, no say, not even an AGM.

And because Americans are not into football and find free market economics alien to their sporting culture, the offering is disguising the football club as a media company. That should fool them.

You have to give the Glazers credit for unashamed brazenness, but their kind of parasitic capitalism has been a disaster for the world economy so I do hope it all goes wrong for them.

 

[SWP29]

Hope I'm not out of order re-bumping this, but it's relevant to this thread and to Spurs too. I believe that you are aspiring to get planning permission for something similar to this.

[video=youtube;wabNqKx8FqA]http://www.youtube.com/watch?v=wabNqKx8FqA&feature=plcp[/video]

Like I was saying before, our owners are here for the long haul and aren't just ploughing money into players' pockets. 16.5 pitches, some of which are for the community. New stadium. New academy. New training facilities for the first team. Large area given to the council where a new Sixth Form will be built. Sure it will be plastered with the 'Etihad' label, but does that really matter in the bigger picture? Hope I'm showing my club in a different light here than what many see us as these days.

 

[jimmyb]

Hope I'm not out of order re-bumping this, but it's relevant to this thread and to Spurs too. I believe that you are aspiring to get planning permission for something similar to this.

Like I was saying before, our owners are here for the long haul and aren't just ploughing money into players' pockets. 16.5 pitches, some of which are for the community. New stadium. New academy. New training facilities for the first team. Large area given to the council where a new Sixth Form will be built. Sure it will be plastered with the 'Etihad' label, but does that really matter in the bigger picture? Hope I'm showing my club in a different light here than what many see us as these days.

We already have planning permission for our new stadium and the first team, reserves and academy players have just moved into our new training centre. There's a thread about them at the top of the page.

The only thing not nailed on yet, as far as we know, is the funding for the stadium.

If your sheikhs want to do something genuinely worthwhile, perhaps they could bung a spare £400 million our way? Such small change is no object to them and Tottenham is a very deprived area, after all.

 

[chicken_badge]

SWP29 - I'm afraid I m far too skeptical to believe that all of what they are building, from colleges to pitches, is geared towards anything but winning trophies. Top players demand top facilities. Build a college and you probably cut a lot of red tape, and win over local hearts and minds. PR wise, it's brilliant went you are trying to win over local fans from United.

I totally agree that it's good to see money not just going to player pockets, but don't for a minute think there is an act of charity or compassion in the true motivation behind it.

 

[indianspur]

SWP29 - I'm afraid I m far too skeptical to believe that all of what they are building, from colleges to pitches, is geared towards anything but winning trophies. Top players demand top facilities. Build a college and you probably cut a lot of red tape, and win over local hearts and minds. PR wise, it's brilliant went you are trying to win over local fans from United.

I totally agree that it's good to see money not just going to player pockets, but don't for a minute think there is an act of charity or compassion in the true motivation behind it.

you may be right, but think about the regeneration of the area, jobs that will be created, kids having the opportunity to go to a new college etc....City may be selfish in what they are wanting to achieve, but a lot of people from the area will benefit from it

 

[metalgear]

beyond winning trophies, there's also the ability to move wealth from USD to GBP, and British Football as an industry is a growing one as well. Not many of those these days. makes sense just to for the wealthy magnate to diversify his wealth and get some fun out of it. everyone understands football, its the world's no.1 sport!

 

[chicken_badge]

beyond winning trophies, there's also the ability to move wealth from USD to GBP

Fair point. When the Arab/Russian/American owners of these clubs spend millions on UK players too, at least that's more money coming into the country.

 

[P.D.]

Looks a bit open if you ask me. If it was my club I'd rather something a bit more secluded.

Echo the other thoughts they are hardly socialists building things for the benefits of the public they love, no its just PR etc but that said something is better than nothing and will create some jobs and that should always be welcomed.

 

[SWP29]

We already have planning permission for our new stadium and the first team, reserves and academy players have just moved into our new training centre. There's a thread about them at the top of the page.

The only thing not nailed on yet, as far as we know, is the funding for the stadium.

If your sheikhs want to do something genuinely worthwhile, perhaps they could bung a spare £400 million our way? Such small change is no object to them and Tottenham is a very deprived area, after all.

My apologies, I shall look closer before barging onto your forum waving my arms about. But I reckon a tinkling contest regarding which is the worse area between Beswick and Tottenham sounds like a decent thread idea. I reckon I'd win, people stole spikes from a fenced-off local sculpture, just because they can.

SWP29 - I'm afraid I m far too skeptical to believe that all of what they are building, from colleges to pitches, is geared towards anything but winning trophies. Top players demand top facilities. Build a college and you probably cut a lot of red tape, and win over local hearts and minds. PR wise, it's brilliant went you are trying to win over local fans from United.

I totally agree that it's good to see money not just going to player pockets, but don't for a minute think there is an act of charity or compassion in the true motivation behind it.

Obviously there must be something in it for them. Why would one guy wake up one morning and think: "You know what? I feel like regenerating a brickpit in England today"? But there are many other cheaper ways they could find positive PR, and in a much better place. I personally don't think their main demographic is working-class people from Manchester who count going to the wine section at the local ASDA as a night out. No matter which way its dressed up, you can't ignore the fact we're giving away a 5-acre piece of land. We get no long-term gain from this, it's not sponsored or anything. Their long-term intentions at us are more than to get a bit of PR, or add the club's name to the Sheikh's portfolio, and that's the crux of the thread.

Looks a bit open if you ask me. If it was my club I'd rather something a bit more secluded.

Echo the other thoughts they are hardly socialists building things for the benefits of the public they love, no its just PR etc but that said something is better than nothing and will create some jobs and that should always be welcomed.

Carrington (our current training ground) isn't THAT secluded or fenced off. We have a public path running right through the middle and round the sides of it. The amount of in-club scuffles that get reported from photographers loitering around these paths is beyond frustrating, so there isn't much change in that regard. I guess the main benefit is that we centralise all our assets in England.

 

[Danishfurniturelover]

Hope I'm not out of order re-bumping this, but it's relevant to this thread and to Spurs too. I believe that you are aspiring to get planning permission for something similar to this.

[video=youtube;wabNqKx8FqA]http://www.youtube.com/watch?v=wabNqKx8FqA&feature=plcp[/video]

Like I was saying before, our owners are here for the long haul and aren't just ploughing money into players' pockets. 16.5 pitches, some of which are for the community. New stadium. New academy. New training facilities for the first team. Large area given to the council where a new Sixth Form will be built. Sure it will be plastered with the 'Etihad' label, but does that really matter in the bigger picture? Hope I'm showing my club in a different light here than what many see us as these days.

It has nothing to do with wanting to help the local communtiy you absolute fool. They are getting there money out of there country because the oil revenue is drying up. They are trying to create a big brand in european football.

The pitches for the community and a new college are little more then a house builder would do by giving some of the housing over to social in a new development. It is politics, but it is the politics of greed and all they want to do is come to the richest country in europe, english fans spend the most on there teams and at games.

With city succesful they will have a half a billion pound investment safe in the bank when the oil wells have dried up.

Only a complete and utter fool would not be able to see that.

 

[Raziel]

Number of reasons

- Ego trip and toy, see Paul Allen's two yachts as example of what Billionaires will spend

- Money laundering, international money movement with lots of different payment parties

- American investors, more interested in the expected exponential increase in TV revenue over next decade.


The real issue is FPP is a joke and local governments are not protecting other clubs from what is essentially unfair business practices.

 

[Raziel]

With city succesful they will have a half a billion pound investment safe in the bank when the oil wells have dried up.

Only a complete and utter fool would not be able to see that.

Mate, I would love to see the financial calculations you come up with that makes City a good fiscal investment. If you had 2-5B to invest to protect your future, only a complete and utter fool would pick a football club.

And 2-5B will not help the Arabs if oil dried up, it's a large amount of money personally, but nothing in the larger scale of things.