Analysing the pros and cons of US owners in the Premier League
For six years, Tehsin Nayani worked as a strategic advisor, mostly in communications, for the Glazer family, who own Manchester United.
He was there at the start, assisting the strategy in the final parts of the United takeover in 2005 and he witnessed, first hand, the loathing and resentment of a leveraged hostile buyout.
Nayani styled himself as The Glazer Gatekeeper in his 2015 book of that title, describing himself as someone who spent six years speaking for the club’s “silent owners”.
In the foreword, Nayani writes: “The publicity-shy Americans will never know what it’s like to be a true local supporter living within spitting distance of Old Trafford. Their American accents, should they ever voice them in public, will always jar with those who resent the loss of their club to global commercial forces. And then there’s the debt…”
For a long time now, the Glazer family have come to represent the worst fears of football supporters. They are framed, accurately, as owners who extract from their club’s business, while investing very little at all.
Since 2006, United have spent more than £1 billion to finance the takeover, with dividends and interest payments costing the club around £44 million per year. In addition to withdrawing cash from the business, the owners fudged the succession plan following the retirement of Sir Alex Ferguson as manager in the summer of 2013 and compounded this by making repeated strategic errors in the transfer market and in managerial appointments.
The owners also exasperated large swathes of the club’s support off the field as one of the ringleaders of the Project Big Picture document that sought to reimagine English football in late 2020 and then by signing up to the Super League launch in April of last year.
From left to right: Bryan, Avram and Joel Glazer speak to Sir Alex Ferguson in July 2005 (Photo: John Peters/Manchester United via Getty Images)
This has all happened at a time when supporters have witnessed more generous forms of ownership at other major Premier League clubs.
Chelsea under Roman Abramovich and Manchester City under Sheikh Mansour recalibrated the expectation of ownership.
The usual give-and-take in a business plan was upended, as ownership models of oligarchs and those linked to nation states tend to be more associated with brand building and personal relations. The fact Abramovich will write off £1.6 billion worth of loans to Chelsea, albeit while he is sanctioned by the UK government, speaks volumes for the nature of the relationship between the owner and the business.
It was striking, too, that in the summer of 2020, as many clubs across Europe repressed spending amid the pandemic, Chelsea spent £230 million in one window after being under a FIFA transfer ban the previous January. The club’s second Champions League final win followed at the end of that season.
Ahead of that Champions League final between Chelsea and Manchester City last May, The Guardian’s wealth correspondent noted that the Premier League pair’s respective owners had spent more than £3.7 billion combined on purchasing players since buying their clubs in 2003 and 2008 respectively. Away from first-team performance, both owners invested tens of millions into training-ground facilities, as well as developing academies and women’s teams that shamed Premier League rivals.
City would also dispute the characterisation of their ownership as merely brand-building and point out that the value of their asset has risen astronomically since 2008. This was exemplified by US private equity fund Silver Lake’s decision to invest $500 million (£389 million) to acquire 10 per cent of the club in 2019, which, at the time, gave City the highest valuation of any sports team.
The events of recent months have, however, provoked another bout of introspection.
Those close to American owners at Premier League clubs have suggested privately that the Chelsea implosion, triggered by the UK government’s decision to sanction Abramovich for his links to Russian president Vladimir Putin, which Abramovich has always vehemently denied, offers vindication for the apolitical and commercially-driven model favoured by US owners.
This would also appear to be the conclusion reached by the Raine Group, which is overseeing the Chelsea sale and snubbed interest from Saudi Arabia to favour a shortlist of four consortiums backed by American investment: Todd Boehly, Josh Harris and David Blitzer (who already own stakes in another Premier League club, Crystal Palace), the Ricketts family and Stephen Pagliuca.
By the end of this process, nine Premier League clubs will be wholly or partly owned by Americans and, given the renewed scrutiny on nation states and oligarchs, it is not hard to foresee a situation where the US influence on English football only becomes more profound in the coming years.
Boehly, Chelsea
Todd Boehly’s bid for Chelsea is one of four to have been shortlisted (Photo: Dania Maxwell/Bloomberg via Getty Images)
In the comments sections of websites and on social media, the response has, at times, been one of heavy caution when it comes to American owners. The prospect of an Arsenal or Manchester United-style leadership is a scary thought for a Chelsea fanbase that has enjoyed handouts from their Russian owner for almost 20 years.
The first thing to say is North America is a very large continent and not all American businessmen and women view the world the same way. Yet there are trends that run consistently both through those already in the Premier League and those on the bidding shortlist.
The Athletic analyses the pros and cons of American investment, while also examining where the Chelsea bidders may find fresh growth in the Premier League.
Concerns surrounding American ownership of Premier League clubs were exposed during the 48-hour rise and fall of the Super League last spring.
The attempt to lock in permanent membership of an elite European competition confirmed the suspicions of those who viewed owners such as Liverpool’s Fenway Sports Group, Arsenal’s Kroenke Sport & Entertainment and Manchester United’s Glazer family as a threat to the traditions and fabric of English football.
It is certainly true to say that the Super League carried some of the features of American sport — eliminating risk and jeopardy and allowing a self-selected group to run the major competition of European football as a cartel.
This mirrored the major leagues in American football (NFL), basketball (NBA), ice hockey (NHL) and baseball (MLB), where teams remain in situ regardless of how successfully or dreadfully they perform each year. By contrast, English football operates a pyramid system its advocates argue protects the interests of the 92 clubs in the Premier League and Football League, while also offering supporters the hope of a surge up through the leagues and a competitive leap into the top flight.
The Washington Post argued the Super League “represented a shift from the nostalgic idea of the people’s game being organised for the pleasure of the fans towards a profit-maximisation approach, in which clubs are viewed as franchises and fans perceived as customers”.
For many years now, critics have alleged that English football has shed its soul by prioritising commercial revenue streams. Some accused the Glazers of cheapening the United brand by developing partnerships with, for example, noodle and mattress companies around the world. The club would argue that such revenue streams allowed the club to remain competitive in the transfer market.
Liverpool’s owners were criticised for their part in Project Big Picture, which sought to give a select number of Premier League clubs the power to veto future takeovers of divisional rivals, while also reducing the number of teams in the top flight. The ownership’s figurehead, John W Henry, recently attended Liverpool’s win over Chelsea at Wembley in the Carabao Cup final — a tournament he wanted to scrap 18 months earlier.
Liverpool, Chelsea
John W Henry and wife Linda Pizzuti greet Chelsea chairman Bruce Buck before last month’s Carabao Cup final (Photo: Robin Jones/Getty Images)
Liverpool’s owners previously misjudged the public mood when using the British government’s furlough scheme to assist the club’s finances during the pandemic, a move which was quickly followed by a U-turn. The Athletic has been told, however, that trade unions privately would have supported the initial decision as a symbolic move that would see other companies follow Liverpool’s lead and protect more jobs across the country.
This week, during conversations with a source close to one of the American bidders for Chelsea, a public-relations professional said that American businessmen had been taken aback by the scale and impact of fan protests against the Super League plan. It surprised them, because US sport has been dynamic and disruptive in moving sports teams around to different cities, while the reduced jeopardy of no relegation is the norm in US sport.
The reality is that the owners of United, Liverpool and Arsenal might have known all this if they had bothered to engage more consistently with their fanbases during their periods in charge of those clubs.
Arsenal fans dubbed Stan Kroenke, the patriarch of KSE, as “Silent Stan”, such was his reticence to communicate with supporters and the media. Liverpool fans will remember well the apparent hostage scene in which Henry pleaded for forgiveness in a video published on the club’s platforms as the Super League notion came crashing down.
The Glazers have seldom communicated. Upon completion of their Manchester United takeover in 2005, Nayani wanted the owners to speak to journalists, even drawing up a list of potential writers and flight itineraries. Yet the family resisted any attempt to humanise themselves away from, as Nayani puts it, the caricature of “sinister cartoon bogeyman”.
They did stretch as far as suggesting journalists fly out to the Florida home of their NFL franchise, the Tampa Bay Buccaneers, but caveated the proposal with a refusal to grant interviews. As such, they became known as absentee landlords, who did little to visibly absorb the culture of the club or articulate a vision for its future, even as performances and results have taken a nosedive in the post-Ferguson era.
Even Nayani, in the early days, felt it necessary to ask Joel Glazer, who is co-chairman of United with his brother Avram and the most involved of the six siblings, just how much he loves football and cares for the club.
Joel Glazer apparently works eight hours a day on United from his office in Washington, DC, and has a George Best canvas on the wall there. He told Nayani: “Of course I love football. I got into the Premier League when I roomed with an English friend at college. He may have loved Tottenham but for me it was all about Manchester United and Fergie.”
Nayani wrote that he recognised how many of the issues for the Glazers stemmed from poor communication rather than “malign intentions”, though that becomes a harder sell after the unpopularity of the planned Super League breakaway plot. This was addressed at a fans’ forum last June — via Zoom — when Joel Glazer attended his first such meeting since the family acquired the club 16 years earlier.
“We always took the approach that we should stay in the background; let the manager, the players, the people at Old Trafford, be the ones out in front, communicating and talking,” Glazer explained. “But in retrospect, that was not the right approach, and there’s a middle ground. Our silence wrongly created the impression that we aren’t football fans, that we only care about our commercial interests and money. And I can assure you, nothing could be further from the truth.”
There was a personal charge to the Glazers for the Super League calamity.
They, like the other owners who broke away and then pulled out, took a £10 million hit following fines handed out by European football’s governing body UEFA and the Premier League.
If the story so far has painted a gloomy experience of life under American ownership at the top of the Premier League, then maybe it is worth remembering some of the brighter aspects.
To begin, the health of American-owned clubs is unlikely to be influenced by the changing diplomatic relations between the British government and states across the world, which is more than can be said for Chelsea in recent months.
It is worth recalling, too, that Americans were not alone in conceiving and signing up to the Super League, as clubs run by Spanish, Italian, British, Chinese, Russian and Abu Dhabi investors all got on board as well.
In their 2018 book The Club, Joshua Robinson and Jonathan Clegg cite how, during Richard Scudamore’s period as Premier League chief executive, he actively encouraged American investors as they were often pre-vetted by Wall Street. This made sources of income easier to ascertain and it was therefore more likely potential owners would pass the owners’ and directors’ test required to join the Premier League.
The most eye-catching success for Premier League clubs under American ownership has been at Liverpool, where FSG attracted an outstanding manager who has developed an outstanding team. The ownership has also moved the club’s training facilities to a new site and found a solution to a long-standing predicament over their stadium, Anfield, by rebuilding rather than relocating.
We should also remember that Liverpool, without the benefit of the soft loans of an Abramovich, have been more competitive than Chelsea in the Premier League over the past five years.
Liverpool season review
Liverpool celebrate winning the Premier League in July 2020 (Photo: Andrew Powell/Liverpool FC via Getty Images)
Liverpool’s progress has instead been informed by analytics, stemming from the inspiration of American ‘Moneyball’ theories championed by baseball executive Billy Beane, who is now a small investor at Championship club Barnsley. The idea is simple in principle: a data-driven approach to identify value others may be missing.
One source close to Liverpool says: “We often talk about ‘proper football men’ in England. That simply does not exist at Liverpool, because they hired intellectuals. They hired a PhD physicist in Dr Ian Graham to head up the research department and Will Spearman worked at the European Organisation for Nuclear Research before becoming the club’s lead data scientist.”
Liverpool’s manager, Jurgen Klopp, is naturally open-minded but he was further impressed a month into the job in 2015 when Dr Graham presented an analysis of a game Klopp’s Borussia Dortmund side had lost 2-0 against Mainz the previous year. Graham had not watched the game but his mathematical model detailed how Klopp’s team had deserved to win it.
Equally, when Liverpool’s owners required data input to their decision-making before hiring Klopp, Graham presented analysis of Dortmund’s performances in a season where they came seventh in the German Bundesliga but the data suggested performances actually merited a second-placed finish.
The club’s analytics department has been credited with a key role in identifying Mohamed Salah’s potential despite a poor previous period in English football at Chelsea while, on a weekly basis, the data team are part of a unit that measures the speed at which an opposing player moves and controls the ball. This enables Liverpool to identify the pressing victims that can be exploited in any given game.
There can be benefit, too, in that businesses informed by data and evidence-based decisions are less likely to make the kind of emotional calls Abramovich was perceived to have made at times around changing head coaches at Chelsea.
Chelsea
Roman Abramovich with head coach Thomas Tuchel after Chelsea’s Champions League final win in May (Photo: Alex Caparros – UEFA/UEFA via Getty Images)
One source close to Chelsea says: “If you have an owner who views the club as a pet project — who is not guided by financial imperatives — they will make eccentric decisions, and they will not always make as good a call as Abramovich often did. There is a derision towards those who see football as a business, but there have been experiences with those who see football not as a business which have been equally poor.
“Chelsea fans may want another owner like Roman who puts in vast amounts of money with little business guidance. He put in so much money that it made no difference that his judgements were quite eccentric.
“The other point is that UEFA are preparing fresh reforms to limit spending, so there will be a necessity to focus on how you spend it, rather than how much of it you spend.”
In the coming weeks, the four American-backed consortiums will go into battle over Chelsea and the successful investment is likely to approach or even exceed £2.5 billion.
The question that follows such expenditure is where, exactly, these investors have identified the potential for further growth in the Premier League and Champions League, given how, only a year ago, six Premier League clubs concluded they had exhausted their rise within existing structures and needed to break away from them to maximise the commercial potential of their clubs.
These new owners are also likely to spend at least £1 billion on a new stadium project for Chelsea, a club that lost more than £145 million last season. Yet the investors still see hypothetical potential.
The Ricketts family bought the land surrounding their Chicago Cubs baseball team’s Wrigley Field stadium and transformed the zone into an entertainment village — something which could be replicated in west London around Stamford Bridge. They, along with the Boehly bid, admire the work done by FSG at Liverpool and broadly agree with the principle of growing sustainably and employing data to find a competitive edge.
Boehly was part of the group that bought baseball’s Los Angeles Dodgers in 2012. The Dodgers won their geographical division every year between 2013 and 2020, and advanced through end-of-season play-offs to the World Series in 2017, 2018 and 2020, being crowned MLB champions in the latter year.
Boehly’s view of growth is two-fold. He is seeking marginal gains through the smart use of data, which is one reason he has invited Conservative peer Lord Daniel Finkelstein to form part of his consortium. Finkelstein was one of the early adopters of absorbing sport through the lens of data when, during the 2002 World Cup finals, he encouraged The Times newspaper to offer a data-led analysis of fixtures.
He told The Athletic in 2020: “While everyone thought it was an impossible outcome, we used a piece of data by Dr Henry Stott and had it down as a 25 per cent chance of Senegal beating the World Cup holders France (in the 2002 tournament’s opening game). They did it, 1-0. If that hadn’t happened, possibly nobody would have been interested in our data after that.”
The Fink Tank column became a weekly item, and Liverpool’s now head of research, Dr Graham, was among those behind the heavy lifting on its content.
Boehly, for his own part, has been likened by one ally to the boardroom equivalent of Chelsea’s 37-year-old defender Thiago Silva, arguing he is “always two or three steps ahead of the competition”. Boehly is among those who believe football is only part of the way through a revolution in using data to enhance recruitment and performance.
He also sees sports teams as media-rights businesses and is among a growing number who believe the Premier League is destined one day to move to a more direct consumer relationship with supporters rather than broadcasting via a third-party television company.
This switch would likely mean more money for the biggest clubs with the largest fanbases, while there may also be the potential for major streaming services such as Amazon, Netflix and Disney to fully invest in the market.
Premier League, TV rights
Potential Chelsea investors believe there is potential in a Premier League streaming service (Photo: Frank Augstein/Pool/Getty Images)
The continued potential for growth in the international media-rights market has been mentioned by sources close to several bids, as well as avenues the investors believe they can unlock in their home continent.
Additionally, Premier League clubs are studying how Formula 1 motor racing revitalised interest and gained new audiences via its Drive To Survive documentary series and will be looking at different ways it can own and monetise the access to the most dramatic moments the sport has to offer.
And that’s all before you get onto the world of cryptocurrencies, NFTs (non-fungible tokens) and the metaverse which, love it or loathe it, now forms a substantial part of the commercial revenue stream for many major clubs across Europe.
Intriguingly, The Athletic has also learnt that several owners of Premier League clubs have been encouraged by the level of interest shown in Chelsea and the amount of money on offer for a club with a poor stadium, at least relative to many of its major rivals, that is in a distressed state and requires a fast sale.
The fear from some owners elsewhere was that this episode could culminate in a fire-sale at a bargain price, which may have created a low benchmark for leading Premier League clubs.
Valuations between £2 billion and £3 billion, however, have offered a reminder of the scarcity value of successful English clubs and this, ultimately, is why Americans are stampeding to buy Chelsea.
pp Store Get it on Google Play
