Alongside the financial motives, football club purchases have been motivated by club availability.
The results from the questionnaire suggested club availability was believed to be a factor which motivated FDI, but why were clubs available? Table 6.2 shows some of the clubs sold to foreign investors, with a common feature being their financial problems (for an existing owner or club).
Table 6.2 Takeovers Motivated by Financial Problems or owners inability to invest Club and Purchaser
In Administration Portsmouth (MM), Portsmouth (BC), Southampton (ML)
Financial Problems Chelsea (RA), Liverpool (FSG),
Owner unable to continue to invest Man City (SM), Portsmouth (SAF), Portsmouth (AAF), Sunderland (ES), West Ham (CBH)
*= Initials represent buying group/owner. See Appendix three for full details.
It is apparent from this table that the third group (owner unable to continue to invest) was solely made up of clubs in foreign ownership. In these cases, the impact of the global financial crisis of 2008 was a significant driver in forcing the sale of these clubs (i.e. West Ham, Portsmouth and Sunderland). At Manchester City, the personal situation of Thaksin Shinawatra forced the sale of the club (Conn, 2012).
The importance of club availability was also highly influential in the choice of Chelsea. Roman Abramovich had the choice of several clubs, but one of the deciding factors in favour of Chelsea was that the club was up for sale (Randall, 2003).
Other clubs (such as Tottenham or Manchester United) had better financial management, but they were not as openly available compared with Chelsea in 2003 (Randall, 2003). Hence, the takeover of Chelsea was completed more quickly than was possible with these two clubs, satisfying desire for a ‘quick’ takeover (Scott, 2005).
Clubs have also been made available due to the unwillingness of an owner to continue investing in a club. Examples of these are shown in Table 6.3
Table 6.3: Sales of clubs motivated by existing owners being unwilling to invest Clubs and Purchasers
Unwilling to continue to invest Aston Villa (RL), Birmingham (CY), Blackburn (V), Derby (GSE), Fulham (MAF), Liverpool (TH
& GG), Man City (TS), Q.P.R (TF), Portsmouth (AG), Reading (AZ), Sunderland (D),
*= Initials represent buying group/owner. See Appendix three for full details.
In contrast to Table 6.2, the majority of clubs in Table 6.3 had domestic owners. In the case of Fulham, Mohamed Al-Fayed’s interest in purchasing the club was driven by Fulham being made available for sale (Al-Fayed.com, no date). Indeed, this suggested a wider argument about club availability:
“In the nineties probably as a consequence of the many problems that English football had faced during the 1980’s, clubs in general were up for grabs, investment levels were relatively low, Fulham were one of the best examples of this, we were I wouldn’t say a sitting target, but we
were there” (Respondent D)
The weakness of Fulham in terms of league performance, infrastructure, and finances, meant that they were open to additional investment. With other takeovers the same intense financial position was not present, but domestic owners were unwilling invest due to costs from player wages and transfers. An example of this was Blackburn, where the club’s last domestic owners (The Walker Trust) were unwilling to fund the clubs operations due to increasing costs, and as a result the club was placed up for sale (Conn, 2008).
However, some foreign owners have also been unwilling to invest in their club. Queens Park Rangers (with part foreign ownership) is an example. The club was sold to new foreign owners shortly after promotion was gained in the summer of 2011. The club was subsequently sold onto another set of foreign investors.
6.4 Attractiveness
If profit, revenues, diversification, and the availability of clubs are all factors which have motivated foreign investors to become involved in Premier League football alongside these factors, there are also the historical roots of football. For some insiders there is the view that English football is unique when compared to other European nations.
“If people were genuinely interested in football then you would say it’s the place of birth of football in the world, it’s got all of the history, it’s got the fan culture that goes with it”
(Respondent B)
“I think it enhances the product, the atmosphere that our crowds generate” (Respondent A)
Therefore, there are intangible attractiveness factors surrounding English football. These elements, alongside the historical factors outlined above, provide some locational advantages over other nations, but there is a question as to how important these elements are. For example, the criterion of ‘history’ recorded a mostly significant response from the
questionnaires; with the majority of insiders suggesting that the historical nature of English football was important to foreign investors. However this view is not universal.
This discourse of uniqueness was further enhanced within the Premier League context:
“The biggest football league and best football league in the world is arguably the Premier League” (Respondent A)
“It’s by far and away the most popular league in the world” (Respondent E)
When developing these arguments surrounding the Premier League, the insiders (rather unsurprisingly) presented a strongly positive picture concerning the appeal of the league:
“The profile of the English football, it’s as far as a media-savvy product, the Premier League are extremely good at marketing it (Respondent E)
“It’s by far and away the most popular league in the world, even if we look at our own UK, I think we forget how big the market is over in the Far East, in India, in the Middle East, and in
America. It’s just huge. And obviously that’s why they’re interested in it” (Respondent E)
“Premier League goes out to 212 countries, 700 million homes, 2 billion individuals and the media value of that is huge, absolutely huge” (Respondent F)
These arguments reflect the ‘locational’ advantages associated with the Premier League, and its global coverage, and in particular these features were attractive to those investors who held economic motives. But as such statements were made by the insiders, this might reflect the desire to promote the image of the Premier League in a positive manner and to protect their own position.
Another unique element of the appeal of the Premier League referred to its competitiveness.
“The appeal of the Premier League is the competitiveness of it in many ways” (Respondent A)
This reflects a number of arguments also made in the media by club insiders and football pundits in suggesting the Premier League was highly competitive. While these issues will be explored further in chapter seven, in terms of the consequences of FDI, there was no reference as to why the Premier League was considered as competitive, and whether or not FDI has impacted on the Premier League in this aspect.
Aside from the aspects of uniqueness surrounding English football and the Premier League outlined above, there were also attractiveness features for particular clubs which might have influenced the choice made by a foreign investor. These included club history, image, support base, growth potential as well as location. Table 6.4 claims fourteen instances of a clubs history influencing the selection of a club for takeover. This table was generated by gathering data from the various statements released after a takeover has taken place, although, again there may be an element of good public relations presentation here.
History 14 Aston Villa (RL), Portsmouth (SAF), Liverpool (TH & GG), Man Utd (G), Man City (SM), West
Ham (BG), Southampton (ML), QPR (FB), Wimbledon (AKER), Sunderland (D), Sunderland (ES), Liverpool (NESV), QPR (TF),
Blackburn (V)
*= Initials represent buying group/owner. See Appendix three for full details.
The results from the questionnaires also supported the notion of club history being an important factor. Three of the four questionnaire responses suggested club history was influential in the selection of clubs purchased. However, ironically the one response which did not suggest history to be important was from a club which underwent a foreign takeover.
However, some foreign owners had used phrases surrounding a clubs history or image as a method of appealing to sceptical club supporters who were unsure of a foreign investor’s motive for purchasing a club. By showing they are aware of such issues; at least foreign owners were creating empathy with supporters, but of course, saying and meaning are different things as shown in the case of Liverpool (Williams & Hopkins, 2011).
References to supporters being a determining influence have been recorded in ten takeovers.
Again this data was also taken from statements made following a takeover:
Table 6.5 Takeovers influenced by club support
Support 10 Aston Villa (RL), Portsmouth (SAF), Liverpool (TH & GG), Man City (SM), Man Utd (G), Southampton (ML), QPR (TF), Sunderland (D)
, Sunderland (ES), Liverpool (NESV)
*= Initials represent buying group/owner. See Appendix three for full details.
The importance of club support is both an economic and non-economic element to the operation of a football club. One of the insiders highlighted the economic impact:
“Yeah, obviously because of larger fan base means a greater possibility of selling products to fans, the greater chance of getting them more locally involved as season ticket holders…the very
large clubs with an international support, Liverpool and Manchester United in particular, and Arsenal can always count on a strong base of foreign fans” (Respondent D)
There was no reference to the nature of support (i.e. loyalty), or other non-economic narratives in this statement. However, in reference to Manchester City the nature of support was drawn out as a factor influencing the takeover. According to Sheikh Mansour, Manchester City had a
‘loyal’ and ‘passionate’ fan base which made the club attractive (mcfc.co.uk, 2009).
Alongside history and support, the location of a football club was considered to be an important factor in influencing the choices made by foreign investors. This was noted by both the foreign and domestic ally owned respondents. Such importance was suggested in the case of Chelsea:
“I’ve [Roman Abramovich] got the money to have a team, I’ll have a team. A big benefit that it’s in London, one of the great cities of the world” (Respondent A)
The importance of a London location to Abramovich is considered in the wider literature to have influenced the selection of Chelsea over Manchester United (Scott, 2005). The importance of London was also thought to be relevant in the case of Fulham:
“Fulham were targeted by Al-Fayed because it was physically proximal to Harrods in Knightsbridge, and obviously our location by the river is absolutely unique in football”
(Respondent D)
This might suggest that non-economic (closeness to the river) and economic factors explained the locational benefits of Fulham. This location provided further benefits:
“If you have an intention of buying a club to realize its property development level or potential then somewhere like Fulham is absolutely ideal. It’s debatable whether there’s any better clubs
to do it” (Respondent D)
In reality, Al-Fayed did not seek to redevelop Craven Cottage for housing purposes or other purposes. Whether or not this was an actual initial motive behind the takeover was not clear.
The appeal of London as a location was also reflected by Tony Fernandes as one of the factors influencing his takeover of Queens Park Rangers (Q.P.R) (BBC, 2011). Location might also
important for non-London based clubs. But the argument might be more nuanced. The takeover of Blackburn by Venky’s can be considered less important in terms of market catchment than a London club. Its appeal was perhaps more due to the large Asian population in the Blackburn area which presented a market for the Venky’s to exploit. Therefore, attractiveness of a market is not solely related to the size of the market or the amount of local competition (which in the case of the latter was a considered to have a detrimental effect in their takeovers).