Billionaires Takeover: The Big Money Wants In On Sports
As the sports industry continues to grow, deep pocketed investors are giving a shot at high profile sports teams.
Reports showed that billionaires’ wealth grew by 17 per cent to US$6 trillion and a large amount of it was contributed by the money that has been poured into sports. Billionaires are looking to make an impact in history, stepping up their philanthropy efforts, investments and patronising sports. As sports teams’ price tags are not accessible by many, it is often only the billionaires who have the spending power and means to get maximum advantage of networking after acquiring ownership of the club.
Back in the days when most club owners are mostly dedicated to the sports and the team, the ideal of directly profiting from the revenues of the club is not the sole goal. More importantly, winning prestigious trophies and proving that the club acquisition was worth it.
Today, the motivation behind owning a team is more pragmatic. The reason is highly due to its lucrative capitalisation of tickets and merchandise sales. The revenues of most sports teams such as the English Premier League football clubs, Chelsea FC and Manchester City, are used to further establish the clubs’ exemplary performance to earn reputation around the world. These renowned clubs were bought for millions and yet are now worth billions. Overall, putting your money in the big leagues, eventually results in big wins, both for the club and for the owner.
Some people will debate that owning a sports team is more than just a dependable business venture. Chelsea FC’s Roman Abramovich, bought the club in 2003 because it was inexpensive, as well as living in London makes for a great buy. It offers an opportunity to promote and create a legacy as the principal figure who took the sports team to great success. In fact, his move into sports investments extends his wealth and fame, levering his business assets and putting himself at the forefront of the sports industry.
Moreover, these teams in return help billionaires connect with other circles of well-rounded and wealthy business personalities in which they might have similar business interests. For instance, it opens the door to meeting famous stars, sheikhs and businessmen who may eventually have a chance to be partners. It often comes with a hefty price tag (for club ownership) which billionaires would probably view as a viable investment to future funds. They would no doubt, be able to recoup the cost as the business interest with these connections are usually aligned.
Back in 2014, Singapore billionaire, Peter Lim bought over Valencia CF. The Spanish football club was in the red due to mismanagement, which sent it into a tailspin for almost a year long. As a billionaire investor, the mindset was to gain returns with low upfront costs and for its wide network of various moneymakers.
There is another reason to buy a low-cost club with the vision that the property will eventually be of good value in the future, which most would take risks to get the rewards. As such, tournaments like Euro, World Cup or the Olympics in the future could potentially allow an opportunity for the stadium to be a venue for the game. This expansion of the future business benefits the owner as a part of the assets are being utilised and profited through the different ambitions one could take with a sports team.
Owning a team includes being active in the players’ transfer market which is highly desirable for the Singaporean billionaire, having able to profit from sales of star players and grooming new stars from the academy. Overall this is what the big money players are diving into. It is like a business unit creating new future star players and putting them on the market, reaping highly lucrative rewards.
Avid supporters of the games would understand the complications between the owner and the club’s direction moving forward. However, fans of the sport ultimately know that the game favours those with the largest bank accounts that propel the team forward but a dedicated proprietor would still bite for the connections to be made and the profits a sports team could bring to the table today.
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