Why Billionaires spend on Football Clubs

No wonder football has become an attractive investment opportunity for many millionaires and billionaires worldwide. English football is famous among bettors and among the world’s billionaires who own clubs. Contrary to how only English men are supposed to own clubs, many foreign billionaires own so-called big clubs such as Manchester United, Liverpool, Arsenal, Manchester City and Chelsea. However, it’s not just top-tier billionaires who own sports teams; in many cases, a foundation or group buys a sports club.

In many cases, a person buys a sports club because they are fans or followed the team when they were young. It’s more of a sentimental and nostalgic concept, but a person buys a group simply because they have a reliable connection to it. The billionaire may just like the sports club and eventually have the money to buy it. If a billionaire buys a sports company, he’s entering a completely different market, and that’s the safest game of the super-rich.

Thus, John Matthews believes that it makes sense for some billionaires to buy a team. The lack of relegation and promotion in American sports, and the staggering cost of elite franchises, makes purchasing a majority stake out of reach for all but the ridiculously wealthy. By far, the most successful clubs represent a safer financial bet than those further down the football pyramid as the lower leagues regularly lose money. It is challenging to give economic value to clubs as many are privately owned.

The amount a club can get from a sponsorship deal ultimately depends on the number and enthusiasm of its fans. For the above reason, owners can take advantage of branding and sponsorship opportunities from other companies/products they own or are associated with through their football teams.

Of those poised to buy Premier League club Barclays, American investors are likely to show the most interest as they believe they can make top club ownership a sustainable business in the long term. British football clubs have long attracted interest from local buyers. Still, with the Barclays Premier League taking the world by storm, British football clubs have also attracted the attention of potential owners in other countries. The recent takeover of Newcastle United and many other great football clubs has caught the attention of the ultra-rich athletes. Football has long been a playground for billionaires, but private equity funds and even sovereign wealth funds have recently gotten involved.

Russian oligarchs, Gulf states and Chinese billionaires have regularly bought European football clubs over the past 20 years. Many blame Abramovich for starting a trend of billionaires buying football teams to win trophies. Russian billionaire Roman Abramovich has spent millions buying players and upgrading Chelsea’s infrastructure, making both Chelsea and himself bigger.

Russian-Israeli businessman Roman Abramovich bought Premier League club, Chelsea in 2003. He invested heavily in the club to develop into a first-class European club within a year. Mansour bin Zayed Al Nahyan, also known as Sheikh Mansour, is best known in a football context for owning Premier League club Manchester City. Still, he also holds several other clubs through City Football Group. The takeover has been described as an attempt by the UAE to “wash sport” to gain political influence in foreign policy through sport.

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