‘Premiership not becoming billionaires playground’

Jun 27 2007 by Nick Smith, Liverpool Daily Post

THE Barclays Premier League is not in danger of becoming a “billionaires’ playground” for foreign owners, according to an expert in football finance.

Sports minister Richard Caborn has called a summit meeting of the English game’s leaders to discuss the increasing number top-flight clubs in foreign hands.

It comes after former Thailand prime minister Thaksin Shinawatra, who is set to take over Manchester City, was described by an MP in Parliament as “unsavoury”.

Caborn responded by saying he would endeavour to ensure the Premier League did not become “a billionaires’ playground”.

But Henk Potts, of Barclays Stockbrokers, believes the investors who have become attracted to English football, such as Liverpool’s Americna owners George Gillett and Tom Hicks, are far from frivolous in their endeavours. Potts said: “I would disagree with the view it’s a billionaires’ playground.

“Football clubs have for a long time been seen as the ultimate toy for successful businessmen.

“But there’s been a transition over the last few years when it’s gone from the local businessman who’s done well to an international businessman, who perhaps no longer sees it as a toy but sees it as as a legitimate business investment.”

Chelsea owner Roman Abramovich began the trend of billionaire takeovers, ploughing vast amounts of his fortune into the club to turn them into Premier League champions.

However, Potts believes Abramovich is now set on making Chelsea into a money-making investment. He said: “Despite the huge amount money that has been spent, there’s an argument for suggesting that actually Chelsea could become a profitable business going forward.”

Potts believes those that have followed Abramovich into the Premier League have similar goals in mind.

He said: “They hope the Barclays Premier League can be marketed on a global basis and the increase in television money, the increase in sponsorships, the increase in ticket sales and merchandise sales will result in a huge jump in profitability, which means they should get a good return on their investment.”

He also calmed fears that unsuitable investors could get their hands on a club.

He said: “The point to remember is that football clubs are a legal entity and a company in their own right and there is also legislation in relation to the way in which companies can be taken over and who are considered fit and decent people to run companies.”

However, Potts acknowledges the vast amounts of money investors are pouring into top-flight clubs risks exacerbating the gulf between Premier League clubs and the rest.

“There’s a big gulf between the Premier League, which has the assets everyone wants at the moment, and the Championship,” he said.

“There’s a huge amount of money at the top of the game. One would suspect it will be a long time before there’s the same level of international interest in the Championship, if there ever is that. The reality is, in order to make these big valuations add up, you have to have the most prominent assets.”