With money and success comes recognition and fame, and no one has found this to be more true than today’s football superstars. Axel Witsel, a young pup playing from Standard Liege, is now known around the world just by virtue of being linked with a handful of Premier League clubs (including Manchester United and Arsenal).
But football players aren’t the only stars of today. Football agents and more recently, ‘deal makers’ have come to the fore for their ability to bring talented footballers and rich buyers (respectively) to football clubs. Amanda Staveley has been mentioned (and quoted) recently in the press for her efforts to connect DIC with Liverpool and more recently assist with the Abu Dhabi-backed Manchester City takeover.
Another major player in this field is Keith Harris, the chairman of Seymour Price, the company currently responsible for selling Newcastle United and Everton and previously responsible for the sale of West Ham, Manchester City (Thaksin), Aston Villa and Hull City.
Harris, speaking at an International Football Arena breakfast meeting in Zurich, had plenty to say about the state of Premier League football and especially past and future takeovers in the league. You can read his comments through that link, but I’m more interested in how we see the future of the clubs Keith Harris is discussing.
Keith Harris Quotes:
“In the UK we are no longer as important as we were. Our pockets are not as deep and Barclays Bank [in which Abu Dhabi’s Sheikh Mansour bin Zayed al Nahyan, Manchester City’s new owner, recently bought a 16% stake], like many of our football clubs, has gone to where the wealth and economic power lies. We cannot regulate against this in a free world and have to accept these changes, embrace them and deal with the issues they create.”
“I have been able to demonstrate that if you do it correctly, the club should generate sufficient cash to fund itself, so having bought it you shouldn’t have to put more money in unless you choose to. And you can generate a return of 5-10% in the value of the club every year over a period of seven to 10 years.”
Both Seymour Price (Harris’ company) and the Premier League are to blame here for not stopping the deal when they saw that Thaksin had criminal charges brought against him. Politically motivated or not, the move was reckless and tarnished the image of the club and the Premier League.
Thaksin had no money by the end, was a political embarrassment for England and almost started a player revolt after he sacked Ericksson despite the former England manager guiding the team to a 9th placed finish and entry into Europe via the Fair Play table.
That Abu Dhabi United bought Man City from Thaksin should have no bearing on the initial deal.
Personally, I see Randy Lerner as a real estate developer – he’s bought something of high value at a low price, will sit on it for some time, use his knowledge, connections and expertise to improve it, maybe invest some money in the club (as an interest-free loan) and then when the time is right, sell it for a high price to the right bidder in a decade or so and move on to his next project.
In that respect the Aston Villa takeover has been great news for the club and the fans – there is stability, there’s a strong squad with a good manager pushing them higher in the league and there’s money to spend if needed.
So what if he’s not a ‘dream owner’ or a lifelong, die-hard Villan. He’s done it right, and for that alone Villa’s takeover is a smashing success.
Adam Pearson sold Hull for £10m to three businessmen led, according to Harris, by the Essex-based property investor Russell Bartlett. The new owners have overseen promotion to the Premier League and a more-than-decent start to the season, so it’s tempting to say that the takeover has borne fruit. Still, where would Hull (and it’s new owners) have been if Hull hadn’t been promoted for a few more years? Would there have been political wrangles a la QPR?
A good deal at the time, effected badly by the current economic crisis. The club itself is essentially in good condition and has worked hard to reduce it’s wage bill (there’s some way to go in that respect). The question remains whether the owner needs to sell the club to use the funds elsewhere, because otherwise there’s no need to sell.
As long as West Ham can maintain their Premier League status and manage their finances better, they should be able to fund transfers on their own and when the crisis passes, the owner will be able to find a buyer and make a killing on selling a London club (always a premium attached to that).
Seymour Price say there’s been no interest in the club, partially because there’s a need for investment (new stadium) and also because there’s a bigger club in town which makes things a bit difficult. Everton are still a good bet with their international profile and quality squad / manager, so it’s also a matter of how much Kenwright can do on his own (losing the battle for Kirkby was a major blow) before the gap between Everton and the top four gets even bigger.
If Everton can get permission for Kirkby, then any incoming investors would be certain of turning a profit in 5-10 years by coming in, building the stadium, stablising finances and getting the dosh coming in and then selling the club at a hefty profit.
“There is no progress at all. The demographics of Liverpool as a city are not hugely compelling. It is not a very wealthy city; Everton share the city with another club which arguably has been in the vanguard for the last decade and they both have a stadium to build. So the economics need a lot of looking at.”
Personally I think if anyone is going to buy Everton they should do it before Liverpool is sold – competing with a big club is bad enough, giving them a headstart in the big money stakes is suicidal.
Harris’s comments about Liverpool will not be appreciated by fans but the fact is that the club have massive debts to refinance and cannot do so without more revenues, which they cannot get without a new stadium, which they cannot get without more loans, which they cannot get without sorting out their current debt problems. A breakthrough on the league / european front could give the club some respite but any long-lasting changes depend on the owners getting the debt monkey off Liverpool’s back or financing the stadium themselves.
Both look unlikely, but if they decide to sell there will be no shortage of takers.
Keith Harris has confirmed that two parties (wealthy investment funds, he says) are interested in buying Newcastle United, and he has also confirmed that these parties were a) not from the Middle East and b) did not include Philip Anschutz.
Newcastle United, according to Harris is still desirable (as compared to Everton and Liverpool) because of it’s stadium and the fact that it’s developed in a one-club city where the supporters have amply demonstrated the fierceness of their devotion and Newcastle United is more of a cultural icon than other football clubs in other cities.
I expect the Newcastle United deal to be sorted out by the end of the year, certainly before the January transfer window, and there’s a good chance that Kinnear would be kept on till May to preserve continuity (the last thing Newcastle need is more change).
Also See: The Great Premier League Takeover
Do you accept that football is a global business and football clubs are ‘trophy assets’ for wealthy billionaires or should local communities do more to keep football ownership local?