Why Would Anyone Buy A Premier League Football Team?
The top 6 money clubs in the English Premiership or the ones who have huge fan bases around the world .Only two of these clubs have been profitable since 2019 being Chelsea and Liverpool.
This is one question that doesn't make financial sense unless you know something we all don't. When Roman Abromavich was forced to sell up his beloved Chelsea there were over 100 different offers. That is a lot of money being thrown around considering the final sale price was £4.35 billion.
The talk is at the moment regarding Manchester United where the Glazier family who own the club are considering selling a minor stake. That is the key word here being "minor" as they are not interested in handing over a money printing machine.
What is obvious is they have no personal attachment to the club and only see the value in dollars and cents. Sir Jim Ratcliffe would like to buy the club as he grew up supporting United. Sir Jim is a British billionaire who owns INEOS which is a chemical giant. There are no shareholders and he is the outright owner which is unusual for such a large business.
He owns the Ineos Grenadiers car manufacturing plant which also manufactures parts for Mercedes Benz. He is the also a 33% owner of the Mercedes Formula One team, owns Nice football Club, Swiss football team Lausanne-Sport, INEOS Grenadiers Pro Cycling team and the INEOS America's Cup sailing team.
The problem is Sir Jim won't even get an opportunity as he is the last type of partner the Glazier family wants. He would be hands on and get the right people involved moving the club in the right direction. The people who the Glaziers are talking to is Apollo Investments which would be a silent partner meaning nothing would change.
The Glaziers want double the value of what the club is worth. Will anyone pay double? Chelsea went for way more than the market valuation as even Real Madrid at the top of the list is under £4 billion.
The price tag for Manchester United is £6 billion which is a £5.2 billion profit considering they never invested a solitary cent in the purchase. The club has been paying off the debt of their purchase from day one literally handing them a business for free. This could be part of their game plan to force a sale price of £6 billion as this is the only way to get rid of this family.
Why would anyone want to be buying a Premiership side when only 1% of football clubs make a profit? Only 5 clubs in the Premiership turned a profit last season so why are people prepared to throw billions at buying into the sport? Streaming is the answer as this is where the money is going to be made.
Currently each season every club in the Premier League earns a decent sized chunk of the television rights. How this works is the estimated £3.2 billion is split into 2 so £1.6 billion is paid out to the 20 clubs being £80 million each. The other £1.6 billion is paid according to the facilities with regard to television broadcasting plus the number of games your club is screened for English viewers. The more successful your team is in the league the more games your club should be screened live. We know that is not necessarily the case as Man Utd tend to get more than their fair share even when not performing.
The difference in the future is clubs believe they will be able to stream their own games removing tv rights from the equation generating more income for the club. Teams like United, City. Chelsea, Tottenham, Liverpool and Arsenal have millions of fans around the world which could literally generate billions instead of million each year. This is why the Glaziers will be reluctant to sell and why so many investors want to climb on board.
Purchasing a club for £3 billion or £6 billion will seem like a steal in 10 years time. When the Glaziers bough Manchester United for £800 million in 2005 who would have thought they would make £5.2 billion profit which equates to around £25 million per month for 17 years. Not a bad deal when it cost you nothing.
Damn, I can see what you mean! :O But this owuld also eman that Barcelona is screwing up big times at the moment :D
Nevertheless, do you think this is an actual possibilty that the clubs will stream their own games? What is hidnering them right now? The current TV contract? This would eman that if this TV contact is up they will stream by themselves? I always thought that the FA is making these contracts, so do the clubs have to exit the FA?
But I can definetly see how streaming would generate them so much money. It is like an online ticket to their games :O
The tv contacts are in place to protect them but in the future they will most likely negotiate their own. I feel sorry for the smaller clubs in a way as if this tv rights does end then what. How many are going to stream a smaller club? Maybe this will be done through Amazon we will have to wait and see. Barcelona have screwed up massively and why the Super League is never an option for the big 5 or 6 in the Premiership as they have to play the game keeping the FA happy for now. What the likes of Barcelona and Madrid earn on tv rights is pocket change compared to the Premiership. City earned over 164 million GBP last season on television rights alone.
Somehow this just doesn't seem right. In fact it sucks, but then again this world is profit mad and this is just a small example of it.
I still cannot believe that Man United is sitting in the last spot on the table. The first time in what, 30 years?
Yes but at the same time the club is still profitable so the owners don't really care. They are milking this and only if they were relegated would this impact their pockets.
Imagine that! The once great Man Utd, relegated. I think that would cause a riot against the owners.
I think it is too early for that, but we have seen the bigger you are the harder you fall and nothing lasts forever. The owners don't care about the club or what players they have but would care about losing over $100 million in television revenue. The club is broken and until they sell it cannot be fixed as look at the reports with the club buying Casimero for 60 Million GBP which is madness.
I think that it is desperate times at UTD. Sir Alec must be having nightmares after seeing how they are wasting all of his work. You are right that the TV revenue should go directly to the clubs, as that will be sure to cut the middlemen and the owners out.
So somebody that knows absolutely zilch about football owns the club. Makes me think of similar scenarios here in in our country and the end is always nigh.
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Information brings light. Nice to see these indices on TV rights et al. Indeed football is some serious business.
Please I'm awaiting your reply on my live blog– I have replied your note there.
Thanks sir
Serious business for some clubs others are just a charity as they are costing the owners a fortune.
I've always wondered how profitable it is for owners of football clubs. From what I've read it's somewhat of a profitable investment over time.
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Some see it for profit. Some see if as a competition at the toilet urinals as to who has the bigger you know what. Really starting to get out of hand. I like Germany's 50+1 rule which is that clubs need to own the majority of voting rights through members. Well...RB Leipzig penetrated that concept..
I think, a diverse income stream is what can be assured by holding a soccer club and if it is in English belt, then thats the platinum matter to look for. Overtly, just the advertisements, revenue collection, tv rights, ticket selling, logistics supply chain and the share stock profits are seen quite as massive numbers.
But, looking from the covert perspective, more other things such as the : donation funds and the betting agencies that sneak a value and partnership deals are hardly be seen and lot other businesses are executed through the gates of soccer club.
Now, interestingly I would say only the billionaires who have spare money to spend in the investment scheme could try a shot at picking a club, no such people like me can have one, 😀..
Now it feels like the Glazers kidnapped Utd and are holding them to ransome while starving them along the way. To think that they got the club for nothing, have milked it through 7 years and are still looking for better ways to keep milking it without giving anything back in return.
Now I see why all of them wants a bite of the football business.
17 years. Not every club is profitable as only a handful are in the Premier League. Across Europe there are only around 12 that are profitable which is less than 1%.
Yeah 17.. That begs the question of how these clubs are run. So taking the TV revenue monies away, how would they have survived?
They would find a way but players would be earning way less. Remove $100 million and players would be far poorer in comparison as they would be the ones affected.