Keeping Possession: Ownership Trends in English Premier League Football Keeping Possession: Ownership Trends in English Premier League Football
Total Page:16
File Type:pdf, Size:1020Kb
Keeping Possession: Ownership trends in English Premier League football Keeping Possession: Ownership trends in English Premier League football Introduction The English Premier League (EPL) is fast approaching the end of its third decade, having begun in 1992. The first decade saw an influx of foreign players who changed the way the game was played. Instead of England’s best players going to play in Europe (Kevin Keegan, Gary Lineker, Glenn Hoddle), Europe’s best players started to come to play in England (Eric Cantona, Gianfranco Zola, Dennis Bergkamp). On Boxing Day in 1999, Chelsea became the first English club to field an entire team of foreign nationals. The 2000s saw the arrival of the overseas manager. Arsène Wenger, Ruud Gullit and Gérard Houllier had arrived in the 1990s, followed in the 2000s by José Mourinho, Rafael Benitez, Sven-Göran Eriksson, Claudio Ranieri and Luiz Felipe Scolari. They combined with the overseas players to make the EPL a melting pot of new tactics and new formations and delivered a brand of exciting football which went beyond the EPL’s wildest dreams to a global audience whose national leagues could not compete. The global audience brought the global money. The 2010s have seen the rise of the overseas owners, bringing new markets and new commercial revenues and complete transformations of some clubs – Sheikh Mansour at Manchester City, Fenway Sports Group at Liverpool, King Power at Leicester – none of whom were anywhere near winning the EPL before being acquired by wealthy overseas investors. The 2010s saw the influx of wealthy overseas investors on a scale unprecedented in any other league or sport, as highlighted by the “league table” below and the analysis of ownership of each EPL club set out in the Annex to this report. 12 of the original 22 EPL teams from 1992 are still in the EPL. They have all changed hands at least once since then, and will continue to change hands throughout the 2020s. This report explores the change from British to foreign ownership, as well as analysing the different types of owner we now see in the EPL. We analyse the ownership trends that we have identified, we examine why owners have invested in the EPL as opposed to other European leagues and we suggest how these trends can be used to predict what the next decade might bring for EPL clubs. 02 Keeping Possession: Ownership trends in English Premier League football The Ownership Table Current league Club Majority owner(s)* Type of owner(s)* Nationality of Year of acquisition standing owner(s)* of club 1. Liverpool Fenway Sports Group Private equity US 2010 2. Manchester City Abu Dhabi United Group Private equity UAE 2008 for Development & Investment 3. Leicester City King Power International Corporate Thailand 2010 Company Ltd 4. Chelsea Roman Abramovich Individual Russia 2003 5. Manchester United Glazer family Corporate US 2005 6. Wolverhampton Fosun International Corporate China 2016 Wanderers Limited 7. Sheffield United Abdullah bin Mosa’ad bin Individual Saudi Arabia 2018 Abdulaziz Al Saud 8. Tottenham Hotspur ENIC International Corporate UK 2001 Limited 9. Arsenal Kroenke Sports & Corporate US 2018 Entertainment UK INC 10. Burnley Michael Garlick and Local owners UK 2012 John Banaszkiewicz 11. Crystal Palace Harris Blitzer Sports Private equity US and UK 2015 & Entertainment and Stephen Parish 12. Everton Farhad Moshiri Individual Iran 2016 13. Newcastle United Mike Ashley Corporate UK 2007 14. Southampton Gao Jisheng, Gao Jingna Individual China and 2017 and Katharina Liebherr Switzerland 15. Brighton & Hove Anthony Bloom Local owner UK 2009 Albion 16. West Ham United David Sullivan, David Individual investors UK and US 2017 Gold and GSO Capital and hedge fund Partners (J. Albert Smith) 17. Watford Gino Pozzo Individual Italy 2012 18. AFC Bournemouth Maxim Demin Individual Russia 2019 19. Aston Villa Wes Edens and Nassef Private equity US and Egypt 2018 Sawiris 20. Norwich City Michael Wynn-Jones and Local owners UK 1997 Delia Smith *see Annex for further details 03 Keeping Possession: Ownership trends in English Premier League football Who is buying the English Premier League? In 2000, all current EPL clubs were domestically owned. In 2020, three-quarters have foreign owners. The pie charts below reflect the nationality of the owners of EPL clubs in 2020 against the nationality of the owners of these clubs in 2010 and 2000. Nationality of owners in the EPL in 2020 UK Russia Other Europe US Africa Middle East 33+1062131314P Asia Pacific Nationality of owners in 2010 Nationality of owners in 2000 UK US UK 60 +515P 100+P Russia Middle East Other Europe 04 Keeping Possession: Ownership trends in English Premier League football Ownership has become a means to several ends, including bringing publicity to some very wealthy owners. Two reasons Types of owners in the EPL in 2020 perhaps stand out: • Under-exploited commercial opportunities meant that EPL clubs were seen as comparatively cheap by US investors given the EPL’s global appeal. British owners were generally not capitalising on their clubs’ global recognition, and US investors knew how to make the most of the opportunity. For years, many clubs just had a shirt sponsor and some local advertising around the pitch – now Manchester United, for example, has over 50 commercial partners and sponsors. • Less obviously initially, but the increase in global awareness or status of something (a person, a brand, a country) brought about just by the association of an owner with an EPL club has clearly also held some attraction. Private equity (PE) funds, sovereign wealth funds, hedge funds Local owners Corporate investors and other international and domestic corporates have all been Public companies Private equity firms used as vehicles to move into the EPL. The pie charts below 15+32833201P reflect the types of investors within the EPL today against the Individual investors Hedge funds types of owners of these clubs in 2010 and 2000 respectively. Types of owners in 2010 Types of owners in 2000 Local owners Corporate investors Local owners Individual investors 36 +8302051P 69+2110P Public companies Private equity firms Public companies Individual investors Hedge funds 05 Keeping Possession: Ownership trends in English Premier League football There have been a number of PE investors and, in particular, US There has also been a huge increase in the past ten years PE investors that have acquired EPL clubs in the past decade. of individual investors and other corporate vehicles holding This includes Fortress Investment Group’s co-ownership of ownership interests in EPL clubs. For instance, Stan Kroenke’s Aston Villa1, Fenway Sports Group LLC’s (formerly known as sports and entertainment company completed its takeover of New England Sports Ventures) ownership of Liverpool2 and Arsenal in 2018,9 whilst Russian petrochemicals trader Maxim Harris Blitzer Sports & Entertainment’s ownership of Crystal Demin acquired the remaining 25% stake held by US PE firm Palace3. Outside of the EPL, Jason Levien and Steve Kaplan Peak6 Investments in Bournemouth to gain full ownership of the own Swansea City, John Berylson owns Millwall and the club in 2019.10 Wolverhampton Wanderers were also taken over Tornante Company owns Portsmouth, all of whom are investors by a Chinese conglomerate and investment company, Fosun falling under the PE bracket.4 International Limited, led by Guo Guangchang in July 2016.11 China Media Capital, a Chinese consortium, invested in City “Local owners”, however, do still exist at some clubs. At Football Group Limited (the holding company that administers Burnley, for example, John Banaszkiewicz, Terrence Crabb, football clubs including Manchester City) in 20155 and, more Brendan Flood, Michael Garlick, Clive Holt, Barry Kilby and recently, Silver Lake, a Silicon Valley PE firm, also bought a Brian Nelson not only hold shares in the club, but also form stake in the company in November 2019.6 The ultimate majority the club’s directorship.12 The owner/directors are all locally shareholder of Manchester City, however, remains Abu Dhabi born supporters of the club and, based on the most recently United Group For Development & Investment, a private equity filed accounts, receive no remuneration.13 Similarly, lifelong company owned by Sheikh Mansour bin Zayed Al Nahyan, who fan Michael Wynn-Jones also owns a majority of shares is also the Deputy Prime Minister of the UAE. A consortium of in Norwich City, along with his wife Delia Smith; however, investors backed by Saudi Arabia’s sovereign wealth fund are the club is organised as an unlisted public company and a reportedly also close to acquiring Newcastle United. good proportion of the shareholding is represented by local supporters of the club.14 Within the hedge fund sector, J. Albert “Tripp” Smith, an executive director of The Blackstone Group and co-founder Other clubs, particularly those with a large, global fan base, of its hedge fund and credit investment arm, GSO Capital have sought to maximise their earning potential by becoming Partners, purchased a 10% stake in West Ham United in public companies. Most notably, Manchester United underwent September 2017.7 The club’s majority owners, however, are still an IPO in August 2012 and is listed on the New York Stock the UK’s David Sullivan and David Gold, who hold a combined Exchange.15 As of April 2020, Manchester United plc trades 86.2% stake in WH Holding Limited.8 with only the Glazer family holding 10% or more of its shares.16 Although now a non-quoted public company, Arsenal Holdings plc also traded on the NEX exchange until September 2018.17 06 Keeping Possession: Ownership trends in English Premier League football What ownership trends have we identified? The types and origins of owners of EPL clubs have changed drastically since the turn of the millennium and this section of the report analyses the trends that we have identified in this period.