SPORTS BOOK OF THE WEEK

The Billionaires Club: The Unstoppable Rise Of Football’s Super-Rich Owners, by James Montague (first published 2018)

Continuing our classic sports book series…

There was a time when football clubs were owned by a local businessman, usually one who had made his money by building and developing a nearby enterprise which generally employed large numbers of local people.

Ironically, while many such businessmen had become comparatively rich in their chosen field, very few were able to apply their entrepreneurial abilities to football. As a consequence, most clubs were poorly-run, inadequately-funded operations. Indeed, as recently as 1987-88, when profits were measured as a percentage of turnover, St Mirren were the UK’s most profitable club.

Following Tuesday’s announcement that Liverpool owners Fenway Sports Group was considering selling at least part of its stake in the club, James Montague’s book is worthy of a revisit.

Montague identifies FA Rule 34 as one of the main reasons for the lack of business flair. In order to prevent profiteering, owners could not take more than 5% in dividend payments from their clubs – which is why so many supporters often queried the ‘official’ attendance figures announced at matches in the ‘60s and ‘70s. Cash handed over at turnstiles was frequently under-reported.

However, once the dividend rule was scrapped in 1998, the door was thrown wide open to a new breed of football club owner who could benefit directly from Sky’s burgeoning largesse.

According to the author, American football club owners, who have watched as their sporting behemoths have become vast money-making machines, invest in clubs, or “entertainment products”, to maximise their returns.

Newer football club owners, particularly those from Russia, have tended to invest as a form of insurance. It’s difficult for the Kremlin to take action against a club owner who displeases them as they’re “much harder to destroy”.

As we have seen at Man City and more recently at Newcastle, Middle Eastern owners are happy to spend billions on building their brands, or investing in high-profile players (look at PSG).

Billionaire owners are not limited to England’s top flight. Wherever and whenever an investor senses an opportunity, be it to protect himself, curry favour back home (eg. Chinese owners), brand build or simply take the money, football offers a veneer of respectability. Despite questions regarding the sources of some of their funding, this is what the majority of football’s new owners crave.