Rich Americans buying Euro soccer teams.

Discussion in 'Economics' started by Debaser82, Apr 17, 2011.


    Malcolm Glazer who owns Manchester United.

    Stan Kroenke just bought Arsenal.

    John Henry owns Liverpool.

    Ofcourse other teams are owned as well by the rich.

    Chelsea is owned by a Russian tycoon, Manchester City is owned by the Saudi Royal family, etc.

    What's the deal here?

    Is it a status symbol?

    Why do Americans buy soccer teams...It's not a traditional US sport.

    You don't become a millionaire by pissing your money away.... So they must think they can make money off of it.

    Yet they rarely do.

    Salaries are sky high and you need to keep spending hundreds of million just to keep up with the competition.

    Also, times are bad, people cut back...Chances are revenue will come down...

    What am I missing?
  2. dealmaker


    Correction: Manchester City is owned by the Dubai Royal family and you have omited Aston Villa and Sunderland which are owned by Randy Lerner and Ellis Short. Yes, both Americans.
    Soccer ( football) having a world wide appeal allows these billionaires to get a return on their investment sooner than they'd have, had they owned an American team ( even football) eg Manchester City was sold to Dubai Royal Family before they ascended to the heights of the Barclays Premier League by former Thai prime minister Thaksin Shinawatra ( think private equity business model).
    Also profit potential in soccer is much higher now that Russians, Arabs, Indians ( Lakshmi Mittal is part owner in Queens Park Rangers) and Chinese ( Carson Yeung of Hong Kong owns Birmingham City )are both interested in the European, especially the English teams.
  3. 1) When wealthy people do "big" deals away from their primary business, it tends to occur at long-term peaks in valuation, in this instance, soccer teams. :cool:
    2) It occurs because of vanity, status, publicity, ego and other psychological "reasons". :p
    3) Some of it can be motivated by guilt and a subconscious desire to lose money. :D
  4. I would think, there has to be some potential of making money there also. I mean, these individuals did'nt get where they are by making stupid business moves.
  5. 1) Yes.....but. Who are they going to "flip" the team to?
    2) They're trapped into being longer-term owners because of their timing in buying into the teams.
    3) They got where they are because of their "primary" business, not because of sports teams. :cool:

    From Wikipedia:

    As of May 2008, Abramovich has spent approximately £600 million (€705 million) on the club since arriving in 2003.

    That's 4 years ago.

    Just this christmas he splashed out 100 million USD on 2 players.

    Say he has pumped in 1,5 billion USD in Chelsea since coming in.

    According to Wikipedia he is worth 13 Billion USD so he can take a hit or 2.

    They haven't won any European price since, but granted they have had some domestic succes.

    Anyway, look at the numbers and one might ask why billionaires worth 1 or 2 billion step into this game.

    Chances are very limited they can buy succes and most of them are probably not rich enough to really make a difference.
  7. AK100


    I kind of feel sorry for Abramovich, you'd have thought that £700million+ would have secured at least 1 European Cup.....
  8. Yes.

    Rumours has it Abramovic has become genuinely obsessed with it.

    Imagine being worth 14 Billion and not being able to buy what you want.

    On the other hand rumours as well have been around for some time he is ready to throw in the towel and cut his losses.
  9. Butterball


    It's for those Americans who need something to brag with at the summer-time St. Tropez cocktail parties. Nobody in Europe knows the Boston Red Sox but you get ooohhhs and ahhhs from Cristal-sipping aristocrat wifes when you mention you own Manchester United or Real Madrid.
  10. Shagi


    Money Laundering Schemes - no matter how rich who in their right senses would pump a $500mil - $1billion for no added value in any way be it social, monetary - zero-zilch return.

    Think outside the box.
    #10     Apr 18, 2011