American and other foreign owners are revolutionizing British soccer, turning the national pastime into an international one
For the last hundred years or so, the offseason in English soccer has been filled with transfer talk, speculation on comings and goings. Now, the subjects of the British version of the Hot Stove League are not only coaches and players, but owners of clubs.
Three top English clubs -- Aston Villa, Liverpool, and Manchester United -- are controlled by US owners. And this could be just the beginning.
Arsenal, the favorite club of Queen Elizabeth, appears to have been targeted for takeover by Denver-based Stan Kroenke. William H.C. Chang (owner of D.C. United and part owner of the San Francisco Giants) is negotiating with two unnamed clubs. A "young, secretive investment banker from New York" is interested in Coventry City, a second division club.
The foreign invasion is not only from the United States. Thaksin Shinawatra, former prime minister of Thailand, is bidding for Manchester City. George Gillett and Tom Hicks outbid and outmaneuvered Dubai International Capital for Liverpool. Alexandre Gaydamak, a French-born son of a Russian oligarch, bought Portsmouth from an American, Milan Mandaric. Icelandic businessmen purchased West Ham United. Another Russian oligarch, Roman Abramovich, set the standard for foreign investment in England when he purchased Chelsea in 2003, then spent record amounts on players.
"It's happening and it's epidemic," said Steve Gans, a Boston-based attorney who has advised British clubs. "It's a phenomenon in the sense of how long have the Glazers owned Manchester United?"
The American interest in English football was sparked by the Glazer family takeover of Manchester United in 2005.
Manchester United is the most popular and valuable of British clubs, rivaling Real Madrid for worldwide fame. But Manchester United is similar to the smallest clubs in England in that it was considered less a business entity than an essential part of the community.
Supporters of Manchester United believe the club belongs to them; they successfully prevented a $1.35 billion takeover bid from BSkyB television in 1998. But the fact that Manchester United had gone public also made it vulnerable to a private takeover. Nobody thought seriously about this possibility when a shareholder plan was instituted in the 1990s, since Manchester United was considered virtually an institution on a par with, say, the Church of England.
Malcolm Glazer, who owns the Tampa Bay Buccaneers of the National Football League, completed a leveraged buyout of Manchester United less than two years ago, despite the United board of directors determining it "unlikely to be able to recommend the offer as being in the best interests of Manchester United, notwithstanding the fairness of the price."
The Glazers confronted strong protests from fans who might have been xenophobic but were also genuinely concerned about being distanced from the club and about a loss of control over ticket prices. The resistance cooled as Manchester United succeeded on the field, but some of those supporters' fears are being realized as ticket prices continue to rise.
For the 1989-90 season, the average ticket price for a Manchester United match at Old Trafford stadium was 4.71 pounds. Chelsea's average prices, 7.30 pounds, were the highest in the country. Two years later, after the Taylor Report obligated clubs to upgrade facilities, including the abolishing of standing-only areas, BSkyB paid 305 million pounds for Premiership television rights.
Once the stadia had become "all-seaters," clubs began using their increased income as they always had -- in buying players. Foreign players soon predominated at the top clubs and the league regained its prestige. Despite the admission prices (Manchester United tickets ranged from $50-$88 this season and will be increased by 12 percent next season) and fans' resistance to having to sit down while viewing the action, the stands were filled.
The 2007-10 television contracts are worth $5.5 billion. Three of the final four teams in the Champions League were English and all (Chelsea, Liverpool, Manchester United) were controlled by foreigners.
"Since the Premiership started in the early '90s, attitudes have changed," said Jeff L'Hote, North American operations director for FMMInternational consulting. "Sponsors and television caught up to what we have been doing in the US for quite a while. Look at their TV deal. The Premier is shown in 200 countries and Forbes valued Man United higher than the Redskins and Yankees."
Gillett (Montreal Canadiens), Hicks (Dallas Stars, Texas Rangers), and Randy Lerner (Cleveland Browns) seem to have been accepted in Liverpool and Birmingham, home of Aston Villa. Liverpool FC has followed the philosophy of Bill Shankly, the team's legendary manager of the '60s, to great success on the field; but the club was in danger of falling behind as Arsenal, Chelsea, and Manchester United modernized.
"The fans want them to be successful on the pitch and they want them to win and be powerful," said Jim Lites, president of the Stars and a top aide to Hicks. "They have 28 million registered fans worldwide. They know what they have and they want us to protect it and improve it."
Part of the deal is for Gillett and Hicks to build a $400 million stadium for Liverpool.
"The city of Liverpool wants a regeneration of the ground where the new stadium will be, which is right next door to the old one," Lites said. "The old stadium has great character and we will try to sustain that in the new building. The Kop [the most spirited section of the stadium] has a life of its own and we are going to design the whole building around it. We are cognizant of the history and we are not going to try to Americanize it. There is a real estate play but it's not the driving force. They want to be successful and have a lot of fun doing what they do well, and part of that is building a good building."
"If you had the chance to sit on stage and be the second guitarist with Bob Dylan at the Royal Albert Hall, would you be talking about what you were going to get paid that night?" Lerner, 44, said in an interview with the Sunday Mercury. "Would I sell Villa to a wealthy Arab if he gave me a double your money deal? No. No, no, no, no, no! I see this as a lifetime type of thing. Some people just don't buy it, though. I know they think 'what's the catch?' and I don't blame them. In the end, actions will allay those fears. Maybe there are so many American owners here because it's less regulated than US sports -- maybe because it's a door into a global phenomenon."
Premier League executives consider the changes inevitable and welcome.
"What we have always prided ourself on is that we are an international league," said Dan Johnson, chief spokesman for the Premier League. "And that has manifested itself in attracting the best foreign playing talent and coaches. The next natural step is to attract overseas investment.
"If they come in and operate within the rules of the league and understand and appreciate the history of the clubs they are taking over, and by our observation they are, it is a good thing for the league. They bring in different types of knowledge and we are not so arrogant as to believe we've got all the answers. There are elements we can learn from US sports and other leagues.
"Our issue is not who owns the clubs but how the clubs are run. We are a modern, capitalist society, and [foreign interests] can come in and buy our utilities, so it shouldn't be any different with sporting clubs."
So, where does the Premiership go from here? The style of play remains frantic and frenetic below the top-tier teams and the league has produced only two European champions, though a Premiership team has reached three successive Champions League finals.
"One of the criticisms of the Premier League has been its strength, that we haven't been as successful in Europe as some of the major European leagues," Johnson said. "It's a fine line between success and failure at that level, but this seems to promise we are getting to that level of success."
Frank Dell'Apa can be reached at email@example.com.