Private equity players score with soccer investments

Private equity players score with soccer investments

Private equity players score with soccer investments While many an investor may have thought those days dreaming of a career in football were over, US private equity investors now have a second chance as many make moves to invest in several British clubs seeing the difference the better spending system is making to profits.
 
As it stands, many of UK’s biggest teams, Manchester United, Sunderland, Aston Villa, Arsenal and Liverpool, already have American ownership.
 
Manchester United is owned by the Glazer family who have held the football gem in their portfolio for over ten years. An American businessman, John Henry, owns Liverpool United while Stan Kroenke, another US investor, resides over Arsenal. Ellis Short owns Sunderland Football Club and Randy Lerner holds ownership of Aston Villa.
 
Having seen the investment opportunity in purchasing a share in such lucrative clubs, the American takeover doesn’t seem to be slowing down.
 
More recently, PEAK6, a Chicago-based investment firm recently bought a 25% stake in AFC Bournemouth. Josh Harris and David Blitzer, two private equity executives from the US, also bought minority shares in Crystal Palace.
 
These latest purchases, although not leading the American buy-up trend, do mark the first time that private equity firms have bought minority stakes in clubs and this could be the start of a new wave of investment.
 
It’s possible that it is the large profits that these clubs are generating, and the fact that the clubs have seen better cost control in recent years, that are drawing the interest.
 
In the past many clubs have been known to spend more than they were bringing in as they scrambled to compete and make it to the top of the league. This meant expensive transfers and competitive salaries but it also meant potential debt and investment insecurity.
 
Now, however, with the arrival of tighter control on the purse strings and limitations on spending, it seems those in the US are keen to take another dip in the profitable pool of the Premier League.

This isn’t surprising given that last year’s profits in the league came in at £614m. This money is generated through ticket sales, merchandise, television rights and sponsorship.
 
This comes as Chinese investors have also begun making a play for football investments and purchase a 13% share of Manchester city.