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.