A good time to buy a football club?

by John Fitzsimons on 09 June 2009  |  2 comments
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Recession or not, football clubs still seem to provide an attractive investment.

Has your club been bought by an exciting foreign consortium over the past few years? If not, then you could be forgiven for feeling like you are in the minority.

West Ham United is the latest club to switch hands, transferring from an Icelandic outfit headed by Bjorgolfur Gudmundsson - the chap behind Landsbanki - to an asset management company named CB Holding.

Gets the heart pumping with excitement, right?

West Ham is far from the only club in this situation. Portsmouth is about to switch from being owned by a Russian businessman named Alexandre Gaydamak to a businessman from United Arab Emirates called Dr Sulaiman Al Fahim, who of course initially fronted the Dubai-based consortium which last summer bought Manchester City.

With me so far?

Sunderland has just been bought by American Ellis Short, strengthening the US influence on many of England's top clubs - Liverpool, Manchester United and Aston Villa are all owned outright by Americans, while Arsenal is in the midst of a power struggle between an American and a Russian.

And I haven't even mentioned Roman Abramovich yet.

Of course, some clubs do remain within the clutches of British businessmen, but the less said about Mike Ashley's tenure at Newcastle, the better. He has put the club up for sale for just £100m, having pumped more than £250m into the club since 2007. Ouch.

Now, the obvious reason that these businessmen are falling over themselves to grab a slice of the Premier League pie is the TV money - last January Sky and Setanta signed a deal to provide TV coverage, for £1.78bn (not that that particular deal has gone well for Setanta, with the company on the verge of bankruptcy).

And while TV deals in other countries are often negotiated on a club by club basis, in England the money is distributed equally. So for these businessmen, they get the same slice of the pie whether they buy Manchester United or Bolton Wanderers.

Of course, these owners are only really in it to make money, and invariably have plans to rake in even more cash, by taking the clubs on money-spinning tours to the Far East or Asia, and increasing the relatively small sums they are currently making from international TV deals.

In the current climate, I can't help feeling that is a bit of a gamble. I only hope that is pays off, and puts them off the last method that they may turn to for making money - hiking up ticket prices.

I have written before about the frankly appalling prices charged by many clubs in The big Premier League rip-off, and with the crunch biting there will come a point when fans can no longer justify paying to watch their side.

Inevitably, supply and demand plays a part in all this, but to view the support of a football club in purely economic terms is, in my view, naive. Clubs are not a commodity that you will shop around for - more often than not you are stuck with them, and clubs would do well to remember that.

After all, there's little point in being the best supported side in Dubai, if you cannot fill your stadium here.

As always, let me know your views on the ownership of football clubs via the comment box below!