For sale: the Premiership
American invasion has made soccer into big business
Posted: Friday April 27, 2007 2:41PM; Updated: Friday April 27, 2007 4:04PM
With the wave of overseas billionaires acquiring England's greatest football clubs, a new era is beginning.
The future lies with these rich men who, even as they roll out prepared speeches about how the history and heritage of the clubs attracted them, cannot help but drift into money talk, enthusing about "global media revenues," "new technologies" and "expansion into Asia."
They see huge earnings ahead from the Premier League's burgeoning worldwide appeal, while at the same time the clubs want short-term investment to give them a chance of competing with Chelsea, backed by Roman Abramovich's billions.
Liverpool was desperate for the backing of Americans Tom Hicks and George Gillett, both sports franchise owners in North America, to build a new, £200 million stadium (about $400 million U.S.) to enable the club to catch up with Chelsea as well as Manchester United and Arsenal. Hicks and Gillett, meanwhile, see the profits to be made just over the horizon.
The arrival of these investors -- a procession of sober, Forbes-list, U.S. businessmen rather than the Russian oligarchs previously expected -- has meant the end for several former English club owners. These men, mostly local, said they had taken their club as far as they could and have sold out for staggering amounts of money.
The highest earner from these recent sales to foreign investors is former Liverpool chairman David Moores, who had held a 51.5 percent stake in the club. He is a scion of the Littlewoods pools and retailing family and inherited the millions he originally put into the club. Moores, a Liverpool fan, also took over some of the shares held by the family dynasty since they shored up Bill Shankly's creaking club in the 1960s. He bought more shares and made his most significant investment in June 1994.
Financially, that phase was similar to now: There were massive earnings ahead for the clubs newly inducted into the Premier League, but they needed money there and then to convert their grounds into all-seaters to comply with the post-Hillsborough disaster legislation.
Moores paid around £8 million for 15,164 new shares in the club, in a rights issue that raised £9.3 million altogether. This allowed Liverpool to develop its treasured Kop stand, including the installation of seats. Altogether, the chairman paid a reported £12 million for his total shareholding in the club.
No salary for Moores
Moores has never been a businessman, and has never sought the limelight as other football directors have. Nor did he ever take a salary or dividend payments from the club he seems to love genuinely. Yet throughout the discussions about a takeover -- which Liverpool's chief executive, Rick Parry, came to see as vital -- there was never much question about Moores accepting anything other than a high price for giving up control.
When Hicks and Gillett stormed through in February to trump Dubai International Capital, whose deliberations made Moores feel uneasy, they agreed to pay £174.1 million for Liverpool's entire stock. That valued each share at £5,000. Moores owned 17,923 shares, and so the check, sent to his home, in accordance with the formal offer document, within 14 days of him accepting the offer, was for a sum above any of those that ever transformed the life of a pools winner: £89,615,000.
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