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Investors’ interest in British soccer kicks in

Kai Ryssdal Feb 15, 2007

Investors’ interest in British soccer kicks in

Kai Ryssdal Feb 15, 2007

KAI RYSSDAL: We’re in what you might call the big-time sports dead-zone. Football’s over. Spring training hasn’t started yet. Yes, the NBA’s All-Star game is this weekend . . . but that’s not a real game anyway.

So what about soccer?

Owners of some big-time American sports franchises are betting heavily on English football, as they call it over there. And our business of sports analyst Ed Derse has more. Hey Ed.

ED DERSE: Hey, Kai.

RYSSDAL: This is a subject you know a little something about.

DERSE: Yes. By way of full disclosure, Fox Sports International, for whom I work, is the broadcaster of the English Premiere League in the United States.

RYSSDAL: So we have these American team owners who are going over to England buying up brand-name teams. Who are these guys, and why are they doing it?

DERSE: Three teams within the last two years have been purchased by American owners. Malcolm Glazer

, two years ago, bought Manchester United for $1.4 billion. And then last year, Randy Lerner

, who owns the Cleveland Browns, bought Birmingham club Aston Villa

for $122 million. And then most recently, last week, George Gillett

and Tom Hicks

, of the Montreal Canadiens, Dallas Stars and Texas Rangers fame, bought a controlling interest in Liverpool for $340 million. And I think you’ll actually see more of this happen.

RYSSDAL: Well, here’s the $64,000 question though: Why?

DERSE: They’re a good value right now, compared to American clubs. The U.S. market is tough to get into . . . $340 million for one of the top teams in the league is, you know actually, relatively a cheap price. The English Premiere League just signed a huge new TV deal: $4.5 billion over the next three years. And $1.2 billion of that is for international rights.

And then, the sort of guts of the teams themselves really lend themselves to a revision or modernizing. Liverpool, for example, plays in a stadium that was built in 1884. Can you imagine any American team doing that? So things like naming rights and concessions. You know, if you’ve ever tried to get a meat pie and a beer at Highbury, you’ll know what I’m talking about. And then, of course, there’s the real estate potential in things like sky boxes.

And of course, there’s great tradition for these teams. They have loyal, worldwide fans. You know, all of this sort of commonwealth dissemination that’s occurred over a hundred years spreads the game worldwide.

RYSSDAL: I think the phrase, actually, is “upside potential,” right?

DERSE: Yeah. And really, in the end, this is not about England itself. This is really about globalization and the globalization of sport. And soccer really is the world’s global game. And the English Premiere League is soccer’s sort of most high-profile and popular league.

RYSSDAL: How are these guys being accepted when they go over there with their checkbooks open? I mean, if you recall, and I’m sure you do, Malcolm Glazer was, I think, burned in effigy.

DERSE: Yes, he was burned in effigy. And the fans of Manchester United opposed him vociferously. However, now that Manchester United is sitting on the top of the English Premiere League with a very hefty record and comfortable margin, suddenly the cries of protest have died down among the fans. And actually, for Gillett and Hicks, they’ve been welcomed with relatively open arms. Because Liverpool is a relatively underfunded club. And what the fans want is to win. And, you know, they want a new stadium, and they want to see the amenities that the big clubs have.

RYSSDAL: Let me ask you this though. How much of what’s happening with soccer is, these guys who were deeply involved in big American sports realizing that that model, the American model, doesn’t really translate globally?

DERSE: Well, I think the American business model translates. And that’s the bet that these guys are making. What doesn’t export are the sports themselves. So the NFL, Major League Baseball, World Baseball Classic aside, they’re not really global sports. The NHL? You need ice. Doesn’t fly in South America and in Africa. And NASCAR? You’ve already got Formula One. Soccer is the global sport. And these guys realize that these teams, these top teams in the English Premiere League, can become global brands. And that’s what they’re trying to do.

RYSSDAL: Ed Derse is the vice president of interactive media at Fox Sports International. When he does the business of sports for us, it’s his opinion, not their’s. Ed, thanks a lot.

DERSE: My pleasure, Kai.

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