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Last Updated: Thursday, 9 August 2007, 23:02 GMT 00:02 UK
Foreign owners boost UK football
By Theo Leggett
BBC News business correspondent

Football, or soccer, is a hugely popular sport.

Advertisement showing Barcelona players
Football and its stars are growing in popularity in new global markets

But it is also big business, and the English Premier League is the most lucrative competition of its type in the world.

When the new season begins on Saturday, hundreds of thousands of fans will pack into stadiums up and down the country to witness the opening matches.

Millions more will be watching on television, and not just in Britain.

The league is becoming increasingly popular around the world, especially in Asia and the Middle East.

Hot shots

But the league does not only appeal to football fans. It is also attracting the attention of wealthy investors.

Of the 20 Premier League clubs, nine are now wholly or partly controlled by rich individuals from outside Britain.

The Premier League is ahead of any other football league in the world
Stefan Szymanski, Tanaka Business School

That includes the top three teams from last season.

The champions, Manchester United, are owned by the American businessman Malcolm Glazer.

The Russian oil billionaire Roman Abramovich bought Chelsea in 2003.

And in February the American sports entrepreneurs George Gillet and Tom Hicks took control of Liverpool.

Money pot?

On the face of it, this looks like good business.

Last season the 20 clubs had combined revenues of 1.4bn, accountants Deloitte say in their annual review of football finance.

In 2007-2008, that's expected to rise to 1.8bn.

Manchester United football shirts on sale at club shop
Merchandising is a large revenue spinner for football clubs

The bulk of this money comes from TV revenues, worth 2.7bn over the next three seasons. But box-office takings and sales of branded merchandise are also important.

Yet big revenues do not equal big profits.

In order to stay competitive, Premier League clubs have to spend huge sums on buying players and paying their salaries.

On average, the league's players each earn more than 1m a year; a top player like Liverpool's Fernando Torres can cost 20m or more.

Small wonder then, that fewer than half of the Premier League clubs posted a profit in 2005-2006.

'Broader appeal'

So what are these billionaire investors hoping to achieve?

According to Stefan Szymanski, a sports finance expert at Tanaka Business School, Part of London's Imperial College, it is all about growth.

US American football team
US sports are some of the most profitable in the world

"At the moment, the Premier League is ahead of any other football league in the world, but its revenues still lag behind those of major US series such as the NFL or Major League Baseball," Mr Szymanski says.

"On the other hand, it's growing much faster and it has broader appeal.

"If it continues to grow in Asia, and especially in China, then it could become the biggest sporting series in the world.

"These investors think the globalisation of football will mean much bigger opportunities to make money.

"Also, several of them already run sporting franchises in the US, and they think they can draw on that experience to make Premier League clubs more profitable."

'Playthings'

There's no question the Premier League is gaining popularity, especially in East Asia.

The rights to broadcast premier league matches abroad for the next three years were recently sold for 625m - with broadcasters in Hong Kong alone paying 100m.

And more TV viewers mean an ever greater market for branded merchandise.

Thaksin Shinawatra
Thaksin has become the latest foreign owner of a top-flight club

But the influx of foreign investors is nothing if not controversial.

In a recent article in the Observer newspaper, Tom Bower, author of Broken Dreams: Vanity, Greed and the Souring of British Football questioned what the impact would be of UK football clubs being bought up in such a manner.

He said that the "Crown jewels" of the Premier League are becoming "the uncontrolled playthings of investors whose backgrounds remain untested".

There have also been bitter objections to the recent takeover of Manchester City by the exiled former Thai Prime Minister Thaksin Shinawatra.

Campaign groups accuse him of presiding over human rights violations, while he has also been charged with corruption in his home country.

But while the new breed of football tycoons may be controversial, many fans seem willing to accept their involvement, because of the new investment they can bring to struggling teams.

And if the globalisation of the Premier League does continue, then more English clubs can be expected to fall into foreign hands before long.


SEE ALSO
Thaksin 'not fit to run Man City'
31 Jul 07 |  Man City
US business duo at Liverpool helm
06 Feb 07 |  Business
Magnusson wants third-party ban
09 Aug 07 |  West Ham Utd
Tevez saga prompts rule changes
09 Aug 07 |  Premier League

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