Football team acquisitions in the UK
Fascinating article — especially at this time of the year when the European football season is coming to an exciting close — about the M&A deals in involving European football clubs. Liam Vaughan has written an article in the Financial News about this: ‘Football deals reach fever pitch’ (I’ve provided the link to the article, although it is available to subscribers only, so apologies to those who cannot see it).
These deals certainly do attract media attention. Focus is on the UK. The battle for the world’s most recognised sports franchise, Manchester United, remains uncertain as the Red Knights group (investors including Goldman Sachs’ chief economist Jim O’Neill and advised by Nomura) target the debt-ridden club currently owned by Malcolm Glazer, who only purchased the Manchester United back in 2005 in a protracted takeover that had started with his purchase of 2.9% of the then-public club in March 2003.
The soon-to-be relegated Portsmouth Football club has been rescued earlier this year (Saudi investors, so once again from outside the UK), and in February two investors bought West Ham United. In early April, Lady Nina Bracewell-Smith appointed an advisor (Blackstone) to find a buyer for her 16% stake in Arsenal (which might have been worth more last week when Arsenal had a better shot at the top of the Premier League, but they are still certain of qualifying for the Championship League, so no problems there. Lastly, the US owners of Liverpool Football Club (who have not qualified for the Championship League this year) are also apparently for sale.
Should this matter to the fans? Clearly Roman Abramovich’s purchase of Chelsea in mid-2003 has helped that club. Glazer’s debt-laden purchase of Manchester United hasn’t stopped them from raising trophies, even after he sold Ronaldo reputedly to raise cash. Not that these purchases aren’t very emotional for the fans, but a steady owner does help to add some stability at the top and avoids distractions such as Portsmouth has had.
It is certainly well known that few people ever make money on buying sports franchises (George Steinbruner with the New York Yankees being a possible exception, or Glazer with his purchase of the Tampa Bay Buccaneers before he ever entered the English football market). As Liam Vaughan points out, these clubs may be coming to the market now as they were private equity or financial deals at the height of the market, and the owners now need to find an exit as they seek better investments.
What these deals certainly do is provide lines and lines of copy in the national papers and the 10 o’clock news. Well, that’s something, at least.
Intelligent Mergers 
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