How American Business is Buying English Football
More than a third of England's professional clubs have American owners.
On February 15, the English football club West Bromwich announced a change of ownership. An official statement states that 87.8% of the team's shares, currently performing in the Championship, will be bought by the company Bilkul Football WBA LLC. The company belongs to the Florida businessman Shilen Patel and his father Kiran K. Patel (his fortune is estimated at more than $400 million). The English Premier League approved the deal, and it will be completed by the end of February 2024. Shilen Patel will be appointed chairman of the board of directors of West Bromwich.
Shilen Patel founded Healthaxis Group, a family of companies specializing in healthcare technologies and services. In 2014, he owned a minority stake in the Bologna team, which plays in the Italian championship. "I am very pleased that West Bromwich has reached an agreement. This club has a special history, fan support, and potential. My goal is to help the team achieve a worthy future," commented Patel on the deal with the English club.
The financial details of Patel's deal with West Bromwich have yet to be disclosed. The previous owner, Chinese businessman Lai Guochuan, spent almost £200 million in 2016 to buy the club. As The Athletic notes, the change of ownership in early 2024 was critical for West Bromwich – by the end of 2023, the club's debt was approaching £40 million, and it is expected that new investors will be able to improve the team's situation.
The transfer of control over West Bromwich to American owners is part of a significant trend in English football over the past few years. As of the beginning of 2024, companies and businesspeople from the USA own more than a third of the teams in the EPL and the following three strongest divisions – the Championship, League 1, and League 2.
After closing the deal, West Bromwich will become at least the 35th team with American ownership out of 92 playing in the four highest English divisions. The previous club, Carlisle United, was bought by an American businessman in November 2023. The League 1 team from the city, located in the northwest of the country 16 km from the border with Scotland, was bought by Castle Sports Group. Its owner is Tom Pentek, who owns a large American company, Magellan Transport Logistics.
In 2023, three significant deals involving US companies were concluded in English football. Everton agreed on an agreement with the Miami-based company 777 Partners. Thanks to the arrival of three new investors, the American share of ownership increased at Swansea. Knighthead Management Capital LLC bought 45.64% of Birmingham City shares, making Tom Brady, the most decorated player in American football history, one of the investors.
In November 2020, the purchase of the Welsh Rexham, one of the oldest clubs in Great Britain, founded in 1864, became a resonant event. Hollywood actors Ryan Reynolds and Rob McElhenney bought the team for £2 million, which was experiencing severe financial difficulties against the backdrop of the pandemic, invested more than £10 million in renewing the squad, and made a documentary series about the club. In 2023, Rexham regained its professional status, earning the right to play in League 2.
American money began entering English football in the first half of the 2000s. The first team to get an owner from the USA was Manchester United – the most successful English club at that time. Miami businessman Malcolm Glazer began buying team shares as early as 2003. By May 2005, he owned a controlling stake, paying almost $1.5 billion for it, and then increased his ownership stake to 75%.
During their years of ownership of MU, the Glazer family repeatedly faced protests from fans over management decisions, including those that put the club into enormous debt. Sporting results also played a significant role – since 2013, Manchester United has not won the EPL, and the last time it was in the Champions League final was in 2011. In December 2023, the Glazers sold part of the club to billionaire Jim Ratcliffe. He acquired 25% of Manchester United shares through his chemical conglomerate Ineos, paying about $1.3 billion for it.
Americans own a significant portion of the top EPL clubs. Liverpool has been owned by the American consortium Fenway Sports Group, led by John Henry, since 2010. The owner of Arsenal since 2007 is American billionaire Stan Kroenke. After being sold in 2022 by Roman Abramovich, Chelsea came under Todd Bowley's control for £4.2 billion. Even Manchester City, traditionally associated with the Abu Dhabi United Group from the UAE, is partially owned by Americans. The second-largest shareholder of the club is the private investment company Silver Lake.
American business people are eager to invest in English teams because football is one of the few sports that can attract global attention, according to Sasha Ryazantsev, an advisor to the financial director of the EPL team Burnley, also owned by an American company. "From the point of view of commercialization and monetization of various assets, American sports are ahead of European ones," he explains to Bloomberg. Ryazantsev emphasizes that most domestic competitions in the US do not have the same international coverage as football.
English football attracts American investors due to its accessibility. Creating a team in the MLS can cost around $500 million. Buying an English club is significantly cheaper, and the investor can save time filling the squad with players and building a stadium. US business people are not deterred even by the risk factor, which is absent in American sports leagues. In England, teams do not have a permanent right to participate in their division. Still, they can be promoted or relegated depending on the results.
American investment in English football can be divided into two types. In the first type, a large, successful club that competes in the English Premier League is acquired. Without facing significant risks, owners can earn substantial income over several years, including dividends from capital growth, prize money, and funds received from television broadcasts. In the 2022/23 season, the champion Manchester City earned $210 million from television rights and prize money, while the last-placed Southampton received $159 million.
The other type of investment is more like investing in a startup - purchasing a club from the Championship or an even more modest league to invest money in the development of the team and its infrastructure and then selling it at a higher price. In this case, investors need help to expect access to money from the EPL. The path to the top league is usually challenging. It requires significant spending on player acquisitions and team development - only some can afford it. But even local successes of the team allow owners to expect that selling the asset a few years after purchase will enable them to earn.
As the example of Manchester United and the Glazers shows, American ownership only sometimes guarantees a bright future for the team. Doubts are also confirmed by the situation at Chelsea after the arrival of Bowley - Londoners have already spent more than $1 billion on transfers. Still, in the 2023/24 season, they are in the middle of the EPL standings with little chance of qualifying for the Champions League. However, the failures of individual projects still need to change the trend of recent years. As soon as the sale of an English club is discussed, players from the USA invariably appear in the case.
Published by Patrick Jane
25.02.2024