Commentary: Love for the game? Is owning a football club worth the trouble?
Peter Lim’s tussle with Valencia fans, culminating in the firing of much-loved coach Marcelino Garcia Toral, and scores of other examples around the world suggest football club ownership remains a risky venture, says John Duerden.
SINGAPORE: If football can be an unforgiving sport on the pitch, what happens off it is a whole different ball game.
For many successful businessmen and cash-rich investors, owning a top European club may sound glamorous and lucrative, but can be a quick way to lose money or reputation - and often both.
That hasn’t stopped foreign suitors looking to court western teams.
Asia has had a long love affair with European, especially English, football.
This is reflected in the boardrooms of many famous teams. Out of the 44 clubs in the top two tiers of English football, 16 are under Asian ownership, either in full or part.
PETER LIM AND VALENCIA
Famed Singaporean billionaire Peter Lim has experienced both the highs and the lows in this area. He owns 40 per cent of Salford City, with former Manchester United legends Gary Neville, Paul Scholes, Nicky Butt, Phil Neville, Ryan Giggs and David Beckham sharing the rest.
The new regime took control in 2014, when the club was in the eighth tier of English football. Now it is in the fourth and three promotions away from the English Premier League.
While successful, Salford is a side project compared to Valencia, six-time Spanish champions.
In October 2014, the same year Lim bought his stake in Salford City, he was welcomed as a hero when he arrived to take control of 70.4 per cent of the club, clearing €200 million of debt (US$218 million) as part of a €420 million deal.
No wonder then that fans in the Spanish city chanted Lim’s name with great gusto. Yet, five years on, those chants have turned to a less welcoming #LimGoHome.
Lim, who also tried and failed to buy English football titan Liverpool in 2010, does not need a second invitation as he is probably rarely in Spain these days.
His roller-coaster relationship with fans is now at rock-bottom. Distrust turned to anger earlier in September when popular coach Marcelino Garcia Toral was fired.
The Brazilian, in charge since 2017, had been credited with bringing some long-awaited success to Valencia. Under his tutelage, Valencia won the Copa del Rey, a first trophy since 2008, and also qualified for the UEFA Champions League.
Marcelino’s success had been achieved in spite of Lim. Over 50 players have been signed since 2014 and there have been eight coaching changes in a period of instability amid Lim’s micromanagement.
The unpopular Lim could be forgiven for wondering whether it has been worth it, after sinking millions into this latest endeavour.
WHY OWN A FOOTBALL CLUB?
The seductive siren of football club ownership has been incredibly enticing for scores of Asian business leaders.
After a spate of Thai acquisitions of English clubs earlier this decade, the chairman of one Bangkok club told me that the ready-made history of teams in England, the home of the modern game with a professional league, steeped in heritage and going back to 1888 - a full 95 years before South Korea founded the first in Asia – has been tempting for potential investors
The lure of being involved in the English Premier League, the world’s most popular elite club competition that generates massive interest spanning several continents, also lies in its ability to turn their owners into highly recognisable figures.
Owning famous teams can help companies with international exposure but come with substantial risks. Indian poultry company Venky’s bought English Premier League team Blackburn Rovers in 2010.
Despite the new owners promising stars and success, Blackburn, Premier League champion in 1995, found itself in the third tier in 2017 and struggling to win back disenchanted fans.
KING POWER’S SUCCESS WITH LEICESTER CITY
Rarer is the story of football triumph, when the love of sport marries the acumen of business, though there are laudable examples.
Few outside Thailand had heard of King Power, the country’s dominant duty-free retail group, until the company bought Leicester City in 2010. The club started the 2015-2016 English Premier League season with odds of 5,000 to 1 to win.
Yet that is exactly what happened in an incredible campaign that captured the imagination of fans and received immense international exposure.
But financial returns can be unpredictable. English Premier League and other leading top tiers in Europe can be broadcasting and commercial money-spinners, but the sky-high salaries and transfer fees involved in keeping clubs competitive can wipe out returns. In the 2017-2018 English season, 13 top tier clubs made a profit while seven were in the red.
Profit may not be the motive for the spate of Chinese activity that started in earnest in 2014 and acquired stakes in 23 European clubs by the end of 2017.
It has been suggested that these are part of a design to develop the sport in China in a national attempt to help build a sports industry worth US$290 billion by 2025, triple its current value.
READ: Commentary: They are giving up their passports to play football for China but Chinese fans remain sceptical
For Chinese companies, European clubs can act as a bridge between international and domestic markets as well as serve as a place to import football expertise to China and export Chinese players.
THE GULF STATES AND FOOTBALL
Some owners do not seem to care how much it costs. The Abu Dhabi group, headed by Sheikh Mansour bin Zayed Al Nahyan, a member of the United Arab Emirates’ ruling family and deputy prime minister, bought Manchester City in 2008.
A decade later and the club’s account showed that around US$1.6 billion had been directly invested into the club.
Whatever success City may have - and the club is arguably the best in England – it will be an uphill climb to recoup the cash. The same can be said for Qatar Sports Investments, a subsidiary of state-owned Qatar Investment Authority, that has taken over Paris St Germain.
The owners of both clubs have been accused of turning them into public relations machines to improve the image of their respective countries.
The Abu Dhabi Group invests, in a much more modest fashion, in Asian teams such as Al Jazira in the UAE and Japan’s Yokohama F Marinos but Asian leagues don’t have the same attraction as their more longstanding and prestigious European counterparts.
Winning titles in Asia does not command international attention. While it is difficult to make money owning a club in Europe, in Asia, it is almost impossible. Broadcast revenues are, in most countries, negligible as are branding opportunities.
The major European leagues are bigger stages that promise glamour, fame and even sometimes profit.
Yet it remains an unpredictable venture as the likes of Peter Lim have discovered.
John Duerden has lived in Asia for 20 years and covers the region’s sporting scene. He is the author of 3 books including Lions & Tigers - the History of football in Singapore and Malaysia (2017).